Negotiation is the process of discussing the price and terms of a used car, eventually arriving at an agreement between the buyer and seller. Any well-informed buyer can negotiate a fair deal using the following steps.
- Make an offer. It should be 15% to 20% below the maximum amount you would pay so that there is room to bargain. You may be asked about a trade-in or be urged to sign up for dealer financing. To both questions, say you are undecided. Your goal at this point is to get agreement on the car price.
- Your first offer will likely be rejected. Your second offer should not split the difference between your first offer and the seller’s counter offer. It should split the difference between your first offer and the maximum amount you will spend. You can use the cost estimates of repairs supplied by your mechanic to help negotiations.
- Making an offer at a used car Superstore with no-haggle prices requires a different strategy. If you cannot negotiate on price, consider other aspects of the sale, such as more attractive financing, a higher trade-in price, or a longer/more inclusive warranty.
- If you reach a price standoff, change the situation by taking another look at the car. Using the Buyers Inspection Checklist, you may notice problems you overlooked previously. At this point, do not agree to a deposit since you have no contract, only your offer. A deposit may give the seller the leisure to negotiate a higher price.
- Some buyers feel at ease making several offers and counter-offers, simultaneously negotiating for better warranty coverage or additional equipment. They may give up $50 to $l00, but they expect something in return. If that is the case, be sure to write down any promises made by the salesperson.
- Your last offer should be close to the maximum amount you would pay for the car. Be ready to justify your offer as reasonable and fair by showing how you arrived at it. Make it clear that this offer is final. If the dealership rejects it, be prepared to walk away. The salesperson may catch you in the parking lot or phone you the next day.
- If the salesperson accepts an early offer but then says that the sales manager will not approve the deal, it is likely that you are being low-balled. That is, a low offer is initially accepted by the salesperson who knows it will be rejected so that a higher price can be reached in further negotiations. If that happens, leave, because low-balling is a form of dishonesty.
If the seller accepts your offer, you have a deal. The salesperson will then prepare a Buyer’s Order or Purchase Agreement to be signed by you. Insist on a readable document, not a first draft. A preprinted form or computer-generated form may automatically charge you for things you have already refused so examine the contract before you sign.
- Check the purchase agreement for arithmetic errors, mistaken prices, extra charges, omissions, and blank spaces.
- Be sure that the information on the purchase agreement is consistent with the information in your notes.
- Get all verbal promises in writing.
- There is no three-day cooling off period for auto contracts so do not sign any automobile contract without understanding it. Your signature is legally binding.