Tip 5: Close the Deal
Tip 5: Close the Deal
Now that you’ve got a great used car in your sights, there are two methods you can use for the actual bargaining process: the “pick a price and stick to it” method, and the “haggling” method. Use whichever you feel most comfortable with.
Stick to it
With this bargaining method, you will start by offering what you believe is the absolute lowest amount the seller will accept for the car. (Assuming that amount fits with the value of the car to you.)
Cheat to the low side if you’re most interested in getting the best possible price, or to the higher side if you are in love with this particular car and don’t want to risk it getting away. Let the seller know that you don’t like haggling, so you’re offering the exact amount you’re willing to pay, and it’s firm. Be sure to include any repairs or maintenance items you want done as conditions of buying.
Many sellers will test you with a counter offer. Just politely respond that you’re sorry, but you can’t go any higher than your offer. If they don’t accept, leave your phone number and ask them to call you if they change their minds. (You may have to repeat this step several times, especially with dealerships.) Eventually, if your offer was reasonable and no one else buys the car first, they will likely accept it or give you a counter-offer close enough that you can go ahead and take it.
Be aware that a good salesman will try to create the appearance of outside interest. There will be people ‘coming to look at the car later today’, or ‘interest from multiple parties’. This may be genuine interest, and it’s always possible someone else will buy the car. If that happens, there’s always another one out there. But it’s just as likely that you are the only really serious buyer, and when another one doesn’t materialize, the seller will accept your offer.
Haggle that price
With the haggling method, you will start with an offer lower than the “stick to it” method above. You want to offer as low as possible, while still being in the seller’s ballpark. From Tip 3, you should have some idea of what the seller is trying to get out of the car. It’s fine to offer less than that, but you want to be close enough to at least raise their interest. If I want $20,000 and you offer $5,000, I’m probably just going to say “Thank you, no,” and forget about you.
Even if your offer is in the right ballpark, it will still be somewhat of a lowball offer, and most sellers will probably simply tell you they can’t sell their car for that much. The smart seller is trying to get you to raise your offer without giving anything on their end. This would be a good time to ask something like “Hmm.. well, how much would you take?” If they repeat the asking price, you’ll fall back to “Well, thanks for your time. Please give me a call if something changes.” On the other hand, if they come back with a counter-offer, you’re in business.
Basically you want to try and give the impression that you’re close to your maximum, so the seller is motivated to lower the price to make a deal. One way to do that is to increase your offer by smaller amounts each time. Say the asking price is $19,900 and your initial offer is $12,000. The seller counter-offers $18,000. You could come back with $13,000. Next time just increase to $13,500, then $13,700. The seller will see you coming up on a limit, and if it’s in their range they may offer $14,000 or thereabouts, thinking it is the most they will get out of you. Specific amounts are another good tool. An offer of $12,250 suggests you’re operating in a tighter range than $12,000. The first encourages the brain to think in terms of hundreds or fifties, while the second is wide open. Incidentally, that’s the real reason why many products have prices like $9.95 instead of $10. It subliminally suggests the prices are not flexible.
Of course, most sellers won’t drop 30% or more off their prices right away, if at all. If you really want that kind of deal, you will likely have to walk away (politely, as always) and hope the seller calls you back. To get the best possible deal on a car, you have to be willing to risk letting it go.
Finally, make sure you mention with any offer that it is for the “out-the-door” price, after any fees or service charges, except for government sales taxes. That way if they try to hit you with a $225 documentation fee at signing or anything like that, you can politely refer to your previous discussion and ask (or insist if necessary) that it be removed.
Also, make sure you get any extras in writing. If the car comes with two keys, make sure that’s mentioned, unless you have them in your hands at signing. If any work is to be done prior to purchase, get it in writing. Even when dealing with honest, reputable sellers, things can get forgotten – it is totally reasonable and smart to request everything in writing. Or even better, have the work done before signing anything.
My last car had a couple of windshield chips that were to be fixed before I came to pick it up. I got it in writing, but when I went to get the car the chips were still there. It turned out that they had already been filled; they were perfectly safe, but looked terrible. Had I dealt with them before signing instead, I could have asked for a replacement windshield or a lower price.
- Page 1: Intro & Tip 1: Find the Right Car
- Page 2: Tip 2: Determine the ‘True’ Value of the Vehicle
- Page 3: Tip 3: Get a Sense of the Seller
- Page 4: Tip 4: Check the History and Condition of the Car
- Page 5: Tip 5: Close the Deal
- Page 6: Tip 6: Financing and Trade-ins
- Page 7: Car Negotiation Recap