Car Buying Guide: How to Negotiate a Used Car Price (The Ultimate Guide)

Couple negotiating sale contact for car

Knowing how to get a good deal on a used car is an art form. There’s a delicate dance that goes on between you and the salesperson.

In this car buying guide, we’ll give you the tips that they don’t want you to know. By the end of this article, you should know exactly how to negotiate a used car price to get the best possible number.

Where Are You Buying the Used Car?

In our other article about buying a used car, we explained that there are a few places where you can buy a used car:

  • Through a private seller
  • On a dealership’s lot
  • Through a used car salesman

This guide is going to cover the last two options. When you’re working with a private seller, there’s a lot more variability and less predictability.

A dealership and a used car lot work the same way. The tips and tricks you learn in this guide will help in either situation.

Sale of a new car. The seller at the car showroom shows the vehicle. Vector illustration

Negotiating a Used Car Price with a Private Seller

Since a private seller is selling their personal car, it might be harder for them to budge on the price. Additionally, whatever money you’re paying will go right in their pocket.

Try to feel out the situation a little bit. If you sense that the seller really wants to get rid of the car and isn’t getting a lot of attention, you can negotiate down. If the seller seems nonchalant about whether or not the car sells, then their price will probably be firm.

There’s no risk in trying to negotiate, regardless.

Understanding How Dealerships Work

You have to remember; a dealership is a business. This makes a lot more sense once you realize how they make money.

The ideal situation for a dealership is buying cars dirt cheap and selling them at sky-high prices. If this doesn’t happen, then the dealership doesn’t make money and they can’t afford to stay open.

You’ll notice the first half of this equation if you go to trade-in a vehicle, they’ll offer you a much lower value than you’ll find on kbb.com.

The second half of this equation is a little less obvious unless you’ve done your homework. A big sticker on your dream used car might have a big slash through it and you’ll find a much smaller figure below it.

Pretty unbelievable that they can just slash off $2,000 before negotiations begin, isn’t it? This is a common scam that tricks people who don’t know any better. The slashed-out price is simply the selling price that they tagged a few grand on top of.

A dealership needs to do some level of trickery if they want to get ahead.

In short, just remember the following: a dealership wants to buy low and sell high.

Car in showroom of dealership Nissan in Kazan city. View from the top

The Process of Buying a Used Car

If you’ve never bought a used car, here’s the quick rundown. You get to the car lot and find an option you like. You take it on a test drive, inspect it, then it’s time to step into the salesperson’s office.

The salesperson will start with the highest price possible. They might tell you that a $5,000 car will cost you $8,000 to drive it away. This is when the negotiation starts. Once both parties agree on a price, then the deal is done, you pay the dealership or apply for financing, and you drive the car away.

Tips to Get the Best Used Car Price

Since you’re not a dealership, you’re a buyer, this idea of an inflated price might come as bad news. Don’t get too discouraged, we’re here to help. Let’s talk about some tips that will help you get the best-used car price.

Do Your Homework

The biggest takeaway is that you need to be armed with information. When you get to the lot, you should know exactly what you’re looking for and what price to expect.

A good tool for that is a price estimator through Kbb.com. It will tell you roughly what the car is worth. This is your starting point.

If a dealership comes in super low or high, then something is wrong with the deal.

New York, USA - 29 September 2020: Kelley Blue Book kbb.com company website with logo close up, Illustrative Editorial
KBB – Kelly Blue Book (Vehicle’s estimated value)

Let Them Make the First Offer

The common thought when it comes to negotiations is that you should never make the first offer. If you do, you’re essentially haggling against yourself.

They’re the ones who want to sell the car, so let them do the talking in the beginning. When they tell you a number to start with, it’s your turn to counter and get closer to the right figure.

Finalize Your Range

You should also head to the lot with a good understanding of what you want to pay. We always suggest having a magic number when it comes to the price.

If the dealer ever offers something below this magic number, then you’ll be comfortable accepting the deal and shaking their hand. Be reasonable with this figure and ensure it fits within your car budget so you don’t get hurt in the long run.

Counter Appropriately

If they want to start with a value of $5,000 above the car’s worth, then you should counter with a number of $5,000 below.

The idea is that you and the dealer are always equidistant from the magic number you established. Whenever they’re ready to meet in the middle, you get the right price for you.

Some people suggest countering really low after the initial offer. We have mixed feelings about this. For one, it might show the salesperson that you don’t know the true value and are winging it.

In addition, it can strike them as a waste of time. If you aren’t taking the negotiations seriously, you won’t make any progress.

Car negotiation comic
*Note – obviously throwing out a ludicrous number or low-balling the initial offer price won’t put you in good standing with the salesperson. It’s good to have a realistic offer price in mind when beginning negotiations.

Forget the Extras When Talking About the Price

After you counter, the salesperson might come back trying to throw in extra goodies at the same price. They might offer a warranty, floor mats, or some extra tech in the car for the same price they previously offered.

It’s easy to get distracted and think they’re making the deal better. If these features aren’t critical to you, they shouldn’t be included in the negotiations.

You want their offers to just include the car, and that’s it.

Monthly Payment Doesn’t Really Matter

If you’re taking out an 8-year loan on the car, the monthly payment doesn’t matter as much as the total value. Make sure you multiply the monthly price by how many months the loan is for. Add in your down payment and you have the final price.

More Money Upfront is Often a Good Thing

If you have the cash to buy the car in total, you’re the king in this negotiation. Disclosing whether or not you’re paying for the car in full is another area where people disagree.

Some say that it hurts your negotiating power because the dealership knows you have enough money. Other people think it helps smooth out the process and show the salesperson that you’re serious.

Regardless, it’s always a nice bargaining chip to have the cash in your account. You can quickly get a check and finalize the process. It usually means less paperwork for them and fewer hoops they have to jump for. A lot of times, a dealer will offer you a better price if you have all the money at once.

Triple-Check the Paperwork

Salespeople can be really shady and sneaky. They might smile and shake your hand, agreeing on a final price. It isn’t until you get home that you realize the paperwork was wrong. At that point, there’s nothing you can do.

It’s really easy to agree on paying $10,000 then write up the paperwork for $15,000. If you sign the contract, that’s all that matters.

To avoid getting conned, we highly suggest triple-checking everything before signing anything. Read the contract in full and ask questions about anything you’re unsure of.

Dealer calculating a car price
Verify that everything in the contract is correct

You Can Always Walk Away

Walking away is the best negotiation in many situations. If the salesperson isn’t willing to budge, you can just leave. It’s as simple as that.

In plenty of cases, the dealership will call you the same day and beg for your business. It’s not a guarantee, but it’s always the best method to use if you’re not happy with what they’re offering.

Don’t Deal with Car Bullies

There’s an old-school way of thinking when it comes to selling a used car. People will try to bully, attack, and instigate you into buying the car without properly thinking things through.

If you’re met with a car bully when you get to the lot, ask for another salesperson or go to another lot. There’s no winning at all if the salesperson is going to try to force you into a deal.

Remember How the Dealership Works

We all want to get a good deal on a used car, but it’s important to remember how the dealership works. If they lose money on the deal, their business is in trouble.

Understand that they’re always going to make a profit in each deal. There’s only so much negotiating down they can do before they have to stand their ground.

You have to be ready to compromise a little bit. Know that they’ll never accept an offer below their bottom line.

Get a Vehicle History Report and Mechanical Inspection

We’re so happy that companies like Carfax are becoming more common. You should always get a vehicle history report before even considering a used car. This report will tell you if there were any accidents or reported damages in the past.

Taking the car to a third-party mechanic is another good idea. This will ensure everything is working correctly and there aren’t any expensive issues.

If both of these checks come back clean, then you can negotiate the price of the car. If there are big damages that cost a lot to fix, you should address it with the salesperson and reduce your offer accordingly.

Mechanic man holding clipboard and check the car
Mechanic inspecting the vehicle

Use Facts, Not Emotions

One negotiation tactic that never works is saying, “please, I don’t have a lot of money”. Emotions aren’t going to change the math that’s going on in this situation.

You need to use facts. Damages, the current status of the car, and imperfections can lower the appropriate price for the vehicle. Present the figure you found on kbb.com and justify why your counter-proposal makes sense.

Shop Around Ahead of Time

There’s nothing wrong with getting a bunch of quotes before going to your preferred dealership. You can simply email a car lot and ask them for a quote on the car.

Keep in mind, these quotes are going to be a high starting price across the board. Even so, you can use these different quotes as a starting point before you go to your local dealership.

Use a Trade-In to Your Advantage

Trade-ins are almost a guarantee to lower the final price of the used care you’re getting. It’s also a nice bargaining chip that shows the salesperson that you mean business.

Try to Get in at the End of the Month

Waiting until the final day of the month is typically a good idea. The car lot might have quotas or targets they need to hit, so they’ll be more desperate to make a deal.

In a lot of places, salespeople get bigger commissions if they sell a certain number of vehicles. They might be close to their target at the end of the month, and they need someone like you to help them hit the target.

Calendar page with selected l31 of December, 2016
Good deals can be had at the end of the month

If They Don’t Negotiate, You Don’t Buy

A newer tactic is showing up on used car lots. The salesperson will claim that they don’t negotiate because they don’t want to waste anyone’s time with the back-and-forth associated.

They promise that their deal is good and they urge you to just take it. Here’s a rule that you should always follow: if they don’t negotiate, you don’t buy. It’s a guarantee that they’re charging way too much for the car and you need to walk away immediately.

The real reason why they don’t negotiate? They want a bigger bonus and commission from the deal.

Patience is Key

If you’ve never bought a car before, here’s what the negotiation process really looks like:

The salesperson tells you a number. You counter. They go to their financial manager’s office and sit there for 5, 10, or 15 minutes. They talk about random things and catch up.

The salesperson comes back to you and offers a slightly lower value than their first, but a figure that’s still way above your counter. You counter again. They go back to the financial manager’s office and talk about last night’s baseball game for 20 minutes.

They will continue this process until you’re so exhausted that you give up.

They get paid via commission to be there. You don’t. You need to be patient and deal with their stupid tactics as long as it means you’re getting a good deal.

If they come back and don’t change their offer, then you can leave without a second thought. Until then, keep playing their game.

Blackman in sunglasses driving a car.
Be cool and ready to walk away from the deal if it doesn’t look agreeable

Make it Easy for Them

The salesperson is a human just like you. If you make their job easy, they could be more willing to work with you.

One way to make it easy is to tell them exactly what car you’re looking for. Don’t waste time pacing through their lot. Take a quick test drive and don’t waste time with small talk with them.

Have your magic number handy so you know when to accept a deal and when to deny it. They get upset pretty quickly if you have to make a phone call after every round of negotiations.

Consider Putting it All on the Table

We have had some personal success in the past by leading with our magic number when negotiations start. This, in effect, cuts out all the negotiations and gets right to the chase.

You say that you like the car, you did your homework, and you don’t want to negotiate. If they can do the deal for $15,000, you’ll sign right now and be on your way.

An honest salesperson will immediately tell you if that’s possible for them. If not, you can either walk away or reconsider the magic number you put together.

Don’t Take it Personally

Do you know the quickest way to lose a negotiation? Get angry. The salesperson will stop taking you seriously and you’ll throw away your chances of a good deal.

Their offers aren’t a personal attack on you. They want a nice bonus, they have a certain number they have to hit, and they want to make the deal. The simple truth is that they have to overprice the vehicles on their lot. You both want different things, so you need to make a compromise and meet somewhere in the middle.

Conclusion

Negotiating for a used car can be a stressful undertaking. A lot of people hate buying a vehicle for this reason alone. Armed with these tips on how to negotiate a used car price, you can get a price that you’re happy with. Good luck!

For more car buying guides, check out our site. We also have a list of tools and accessories every car owner needs.

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Ernest Martynyuk

An automotive enthusiast who's been tinkering with vehicles since I was 15-years old. Repairing automotive electronics has been my main job for over a decade now and have a passion for everything technical regarding cars.

2 thoughts on “Car Buying Guide: How to Negotiate a Used Car Price (The Ultimate Guide)”

  1. You clearly don’t have a clue on how the process works when buying a car in this century. There are several disconnects in your article, and giving out this advice will only hurt a consumer when trying to buy a vehicle.
    Anyone who says paying cash will get them a better deal in today’s world doesn’t understand how car dealers make money. You should do some actual research before posting something likes this, rather then just stating you opinion. This could have been a great guide and a great idea if done properly. I would challenge you to walk into either one of the biggest used car dealerships in the country (carmax or carvana) and try any of these “tips”. Make sure to let them know about their “tricks” and “scams” while you’re there.
    Also, I don’t know a single person on a dealership floor that “gets paid by the hour to be there”. Including management.

    Reply
    • Carmax and Carvana operate differently than a traditional dealership. You don’t ‘walk-in’ to a Carvana dealership since they’re primarily online. I’m sure there might be something that I missed however the art of negotiating, understanding the strategy of a traditional dealership and how it operates, trying to purchase a vehicle at the end of the month…in my opinion, those are sound tips that anyone can learn and take advantage of. I used to work as a salesman at a Toyota dealership years ago and can tell you that it’s not a myth or a ‘disconnect’ that dealerships have quotas to meet at the end of the month.

      Reply

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