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Negotiate effectively

Last updated: April 2012

The first rule is, don’t fall in love with a car. Cars are commodities, not people. The used-car market is huge, and it’s often a buyer’s market. In every category, there is more than one brand to chose from, and more than one model that should fit your needs as well as any other. Even if you have your heart set on one specific model, be assured that it’s not the only one for sale.

In general, negotiating the price of a used car is less harrowing than when buying a new car. If you’re buying from a dealership, there are fewer opportunities for the salesperson to load up the deal with extra-cost items and other charges. When buying from a private party, that person is unlikely to have the experience and resources to play the games a dealership might try.

Never negotiate under pressure. Salespeople may assure you they won’t pressure you but then do it anyway, often in a subtle way. They might, for instance, tell you that someone else is interested in the same car, a common sales tactic. Even if it’s true, don’t feel you have to make a deal immediately; there are always other cars out there.

If you’re buying at a dealership, negotiate one thing at a time. First settle on the price for the vehicle you’re buying, then discuss your trade-in or financing terms separately. Salespeople often like to focus on your monthly payment. But don’t bite on this. It’s the first step down a slippery slope of being manipulated with numbers and overpaying for your vehicle. Using the monthly payment as the focus, the salesperson will lump the whole process together, which gives him or her too much leeway to give you a “good deal” in one area while making up for it in another.

Based on your pricing homework, you should have a good idea of how much you’re willing to pay for a vehicle. Begin negotiating by making an offer that is realistic but still, say, 25-percent lower than this figure. Name your offer and say no more until the person you’re negotiating with responds. Be courteous and businesslike, but hold to your original figure after receiving any counteroffer.

If you must move your offer up, do it in small increments. If the gap between the two sides is, say, $1,000 or less, move your bid $100 at a time. State clearly when you have reached your last offer, and stick to it. Don’t be afraid to say your offer is fair, final, and good for 24 hours only. If the seller won’t budge, be prepared to walk away rather than pay more than you know is a fair price.

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