Used Car Buying and the Art of Haggling

10/06/2017 03:02 pm ET
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How much should you haggle when buying a used car? originally appeared on Quora - the place to gain and share knowledge, empowering people to learn from others and better understand the world.

Haggling is not appropriate when you are trying to buy something unique and in high demand — say, a Ferrari or a super-luxury custom car. The seller knows how much he can get, and he knows there will be a buyer at his established price. So trying to haggle will just get you thrown out, politely if you are lucky.

For more ordinary cars, they are usually priced somewhat over what the seller is actually willing to take for the vehicle. But that amount or percentage differs among sellers, and what they are willing to take will change somewhat depending on how long they have owned the vehicle. The longer it has been on the lot, the more eager they are to move it out. Unfortunately, you won’t know how long they have had it.

Typically a used car dealer has a pretty accurate idea of how much any given vehicle will bring, at an auction. He will want to get much more than that in a commercial sale; but if he has held the car long enough, and feels he will have to take it to the auction, he will be willing to sell it for only a few hundred dollars about his estimate of the auction price. But you have no way of knowing those things.

By far the most effective and most time-saving technique is for you to have a solid idea in advance of how much you are willing to pay for such a vehicle. You can base that on whatever you want — Blue Book listings, eBay transactions, average internet listing prices, or whatever else you want. But have your number in mind, and stick with it.

When you are talking with the salesman, show interest in the car but not joy that this is the vehicle you feel destined to own. There will be a sticker price posted, and you can ask if that is actually what he expects to receive for the car. He will of course say yes, and you can say OK, maybe I should look at something else. He will then almost certainly offer you a somewhat reduced price, and you should thank him; but say you are nevertheless going to look at something else.

The salesman may or may not continue to offer you a lower price, but pretty quickly he is going to say “This is the best we can do”. That is not a time when you should begin haggling. You should not haggle at all. You should say OK Thanks, and turn away. Even leave the place. If the salesman actually lets you leave, you can be pretty sure that you have heard the best price you can get there. More likely, he will stop you or call you back, and ask what you have in mind for that car.

That is when you tell him how much you are ready to pay. That had better be an actually realistic price for such a vehicle, not just some fantasy you have about what price would constitute an amazing bargain for you. If you approach it with that idea, you are never going to make a deal, on that car or any other. Salesmen quickly recognize someone whose only motive is to get an amazing bargain that they can brag about, and they won’t waste any more time with such a person.

So if you have a realistic price in mind, and you are ready to make the deal immediately at that price, you can say “I would take that car for $5500, but that’s all I have. Can we have a deal at that price?”. If you have in fact set a reasonable price, the salesman will either accept it on the spot, or will go through a little act of discussing it with his manager. He may try to ratchet you up a bit, but you have to stand firm. He will soon either accept it, or you will see that it is time for you to leave.

Never go back and raise your offer. As soon as he sees you are willing to go up a couple of hundred, or a couple of thousand, the lowest price he previously gave you will be set into stone. You have no chance of getting him to come down, not even by a dollar.

You have made your first and final bid for the car, and unless it is accepted you have to go somewhere else and find another car. That is why you should never fall in love with a car at any dealership. If you do, you are lost. You are going to end up paying whatever they want for the car. Instead, you have to realize that there are plenty of cars, plenty of different makes and models and years, that would all be just fine for you. So when you are looking at a specific vehicle, know in advance what that vehicle is worth to you. At the appropriate time, make your offer for it, and if it is not accepted, go on to something else.

That is a far better approach than trying to haggle your way into a bargain. But don’t make the stupid mistake of deciding that your price should always be ten percent under the sticker price, or twenty percent, or any other such ridiculous reasoning. Do enough research to know what is the realistic market value of the car, independent of the dealer’s sticker or the salesman’s offer. Don’t feel that you deserve, or need, to have the lowest price or the best bargain of anyone; you don’t.

Note that when you are trading in a car, you are putting yourself in the position of trying to set two prices at one time — the price for the car you want to buy, and the price for the car you want to sell. That is more than twice as difficult as making two separate deals. You will do much better, ordinarily, to sell the car you have, then go out and buy another. Trying to get a dealer to pay you a higher price, while you are also trying to get him to sell you something for a lower price, is an impossible task.

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