How to Buy a Used Car Part 4: Negotiating

Steven Lang
by Steven Lang
how to buy a used car part 4 negotiating

When it comes to buying a used car there are two basic negotiating mindsets. You can either be fair and decent or unfair and obnoxious. You need only visit a used car lot to know that unfair and obnoxious works. But it is also true that many sellers respond extremely well to honesty and decency. Win – win is no sin. So, karma lovers, here's some tips for negotiating the purchase of a used car by traveling down the righteous route.

If you've followed steps one through three, you've already achieved a major victory. You've found a car that's superior to 90-plus percent of what's out there. Rejoice and let the seller enjoy the benefits of properly maintaining his car. Again, the "completed items" section of eBay is the only guide to the "right" price to pay for a given used car.

I always perform the final negotiations face-to-face. Do not discount the importance of charm, relaxed body language and a civilized tone of voice. Prepare yourself by deciding the absolute top price you're willing to pay for the car. The basic formula: the seller's asking price – agreed deductions for repair costs = the eBay price. More or less.

Begin by declaring your intention to buy the car, subject to a nominal adjustment for necessary repairs. If these repairs are minor, immediately offer to split the difference for the repair costs and call it good. If, however, mission critical repairs run into the high hundreds to thousands of dollars, you have an "opportunity" ahead of you.

In this case, it's often helpful to ask your mechanic to fax the used car's inspection report to the seller before you speak with them. At first, the seller (and possibly you) may be shocked by the numbers involved. This can be especially true with older vehicles and luxury cars. However, with a little constructive conversation, even the most alarming repair costs needn't kill the possibility of an amicable agreement.

I like to start negotiations for cars with repair "issues" by giving the seller an opportunity to do the right thing. "Given what's in front of us right now," I ask. "What would be the fair way for both of us to resolve these repair costs?"

Worst case, the sellers stand pat. In that case, walk. Best case, the seller says they'll simply lop-off the total bill from the asking price. If that happens, it's time to shake hands and do the deal.

Some sellers offer to reduce the asking price by a very low number, figuring you're there to haggle (hoping you won't). Provided the asking price minus 50 percent of the repair costs is acceptable, again, offer to split the difference. If that doesn't work for either or both of you, it's time to go through the inspection report– and the probable costs of repair– line by line.

Keep in mind some items are your financial responsibility. Unless it involves a major repair (timing belt, water pump, adjusting the valves, etc.), upcoming maintenance regimens are always down to you. In particular, oil changes, tune-ups and replacing filters that aren't necessary right now should be removed from your list. By doing this from the onset, you're showing goodwill and fairness.

If the seller claims the cost of repair listed in your inspection is too high, ask them if they know of another mechanic who'd be willing to do it for less, and the type of guarantee they will offer. I've seen $450 repairs with 30-day guarantees turn into $200 repairs with a full year guarantee. If the car is worth it to you, it pays to explore alternatives that will benefit both of you. It may take research and patience, but it can be done.

Finally, if you have experience repairing minor automotive issues, use that skill to create some wiggle room to help close the deal. "You know, I think I could handle that myself. What do you think about us taking off x repair? Would a price of y make it a fair deal for both of us?"

If you can come to a mutual understanding, congratulations! If not, don't beat a dead horse. I like to back-out by thanking the seller for their time, leaving a copy of the inspection report as a "gift" and telling them my final price, should they reconsider. Above all, don't sweat it. There are plenty of excellent used cars out there looking for a good home.

To recap: research diligently, test drive patiently, let an expert figure out the unknowns, and negotiate in good faith. Do this and you'll save unnecessary test drives and thousands of dollars in future repair costs. You'll also buy the cream of the automotive crop at an extremely fair price.

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2 of 8 comments
  • AGR AGR on Jul 02, 2007

    At any dealer the mention of "this is my price, we do it or I walk out" is a very powerful tool / lever. This works best if the seller / buyer are within a reasonable distance from each other. Most folks tolerate 1 or 2 rounds in a negotiation, at more than 2 it starts getting unpleasant and adversarial. New car franchised dealers have a tendency of asking big money for their CPO cars, in many instances they have no choice. Independent dealers constantly adjust their prices to reflect the "current market" reality. Many private sellers are disconnect with the market, and with the ability to post ads for free they can go on a "fishing expedition" to see what if the market will tolerate their asking price. Especially for older cars. "I don't think my car is worth my asking price, but if I can get it I'll consider selling, if not I will keep it".

  • Brendan Moore Brendan Moore on Jul 06, 2007

    Regarding KBB, it is mostly only dealers in CA that use it - almost no one else in the U.S. uses KBB. It's all NADA and Black Book. Consumers that use Blue Book to determine the value of their cars are basically kidding themselves unless they reside in CA. We offer wholesale and retail pricing on sample used cars every month on - go to and scroll down until you hit it. It's pretty big, so you can't miss it. In another life, I used to send about 2000 off-lease cars/trucks a month across the block at the auctions in the U.S., so I have some experience in residual values and secondary market pricing. B Moore -

  • Analoggrotto It's getting awful hard to tell these Mercedes apart from one another.
  • Analoggrotto Ah the Fisher Price car for the uncoolest of uncool dad-bods.
  • FreedMike If it were a GLI, it’d be a decent project car. But at the end of the day you have a base Jetta, and those weren’t all that great. Speaking of project VWs - when I was living at my old house a few years ago, one of my neighbors had an OG 1983 GTI sitting on his lawn. Lord, did I want to take that car home.
  • Dukeisduke "Gouging" - lol. California's gas prices are driven by a combination of the highest state gasoline tax in the US (66.98 cents per gallon) and the CARB-mandated California-only boutique fuel blends.
  • Astigmatism Honestly I'm surprised it's not higher. My parents bought two garage spots in Boston for $250k in the 1980s. When I worked in midtown a decade ago, garage spots near my building rented for $500 a month, which would support a $125k mortgage.Places get expensive when lots of people want to live there.