Tips to Buying A Car and Negotiating Used Car Price

Car PurchaseYou know when you feel like your car is on the verge of breaking down and you keep telling yourself you need to either check it out or get rid of it? Well usually I put that off because its such a hassle to sell your car, and even more of a hassle finding a new one, but I’m glad to say this time I didn’t. We decided to go ahead and deal with the hassle, before something broke down. I figured our ’03 Lancer had run its course and it was time to part ways. Back to that feeling… we all feel it in one form or another. Most people don’t like the hassle of selling their car, and just want to get rid of it. This can play to your advantage. More on that later.

Once the Lancer was gone, we knew we needed something to replace it. We had a baby on the way, and wanted to make sure we had a car safe enough that we could drive the baby in (Because driving an unsafe car is ok if its just you , but not if there is a baby). So we started our search for a new car. Now when I say new, I really mean used. I’m not sure I’ll ever buy new. Its more expensive, and the value comes down quickly as soon as the car leaves the lot as we all know. So here’s tip one to save money on your next car purchase.

Moola Saving Tip 1: Buy a used car (Obvious).

You can buy an almost new car for a steep discount. It’s common knowledge that a car is more expensive if you buy it new. I was almost hesitant to add this as a Moola Saving Tip because its so obvious, but never buy new if you are looking to keep a budget.

Finding The Car

Once I’ve decided what type of car I want, There are 3 places I look to find it.

  1. Craigslist.org
  2. Cars.com
  3. Autotrader.com
You’re local paper may also have some places to search, but for us, it is now integrated with Cars.com. You’ll want to keep an eye on any local car advertisements, online being the quickest way to find them.
It’s my opinion that the key to finding a deal is being patient, ready, and up-to-date. In other words, I am never in a rush to buy a car, I am ready to buy when I find what I’m looking for, and I create the best possible way to monitor new listings.
Moola Saving Tip 2: Be Patient, Ready, and up-to-date.

My phone has become the best tool I have to keeping up to date, and monitor new car listings. All three of the above sites have free apps. I simply save the searches inside the apps, and check them here and there throughout the day. Its easy, and I am one of the first to find deals. Deals are snatched up quick, so it is essential that you are among the first to see a deal. Make it easy on yourself like I do do with the apps. If its a constant hassle to monitor listings, then you will not do it often enough to find deals.

This leads me to my first caution:

Moola Mind Caution: Never Rush the car buying process.

Rushing has many negative outcomes, here are a few examples I’ve experienced:

  1. You overpay
  2. The car has problems, but you justify them
  3. You experience extreme buyer’s remorse

Buying a car is a big decision, and for me, big decisions escalate the outcomes. If I get a good deal, there is nothing more rewarding, but if I rush the process, overpay, or buy a lemon, the buyer’s remorse is amplified as well. So take heed to this caution.

To avoid making a bad decision, I set everything up and wait. I discard anything that doesn’t fall into my already set parameters. This is how I found our latest car. A 2005 Honda Accord LX. We were looking at an Accord because, in my opinion, it falls under the “smart spending” category. It’s a long lasting car with great gas mileage. I know that this type of car will give me a lot of bang for my buck.

It took a few weeks of patiently searching to find the listing for the Accord. I found it on Craigslist.org. I called the guy and asked if we could come check it out. We met at his place, and the negotiation began.

Negotiating Used Car Price

This is, in my opinion, is the most valuable part of the process. The listing for the 2005 Honda Accord was for $9,500. It seemed to be in great condition, and it was in range of what we were willing to pay. So I Bluebooked it:

Moola Saving Tip 3: Know the value of the car.

I use Kelley Blue Book to determine the car value, but you could use many services. There are a lot of reasons why you would want to know the value, some more obvious than others. Here are a few reasons I like to know value:

  1. It can help negotiate the price of the vehicle
  2. It helps determine what I could sell it for if I needed to sell it
  3. It’s the benchmark that determine’s if I got a deal, and how good of a deal I got.

The Kelley Blue Book value for the Honda Accord was $11,075 in excellent condition for a private party purchase.

Kelley Blue Book Honda Accord

I waited about 3 weeks to find this deal. By the time I saw it, I knew it was a good deal, and as long as nothing was wrong with it, and everything was as advertised, I was ready to buy.

After we met with the couple that owned it, took it for a drive, and grilled them with questions, we knew we didn’t want to pass up this deal (plus it was black like we wanted). The car was in pristine condition (she even shopped around for the exact tires that came with it when she bought it new), the owner’s were meticulous, and it had well under the mileage we were looking for.

This is a critical moment- you could agree to buy the car, or you can use a few more tips to get the ultimate deal. I’ll tell you now, I rarely pay full price for anything, including a listing like this. It’s not always easy though. You’re excited, but you know you shouldn’t show it too much. My wife is the best (I could almost make a tip here about not bringing the spouse that can’t control emotion), but she looked like the joker with the size of her smile. Unlike the joker, however, I didn’t want to put that smile on her face… just yet anyway. We still needed to negotiate.

Here’s a little more about me. When negotiating used car price, I am not your average negotiator. I do not try and pick out things that are wrong, or show them anything I can to convince them that the price they have listed is not what its worth. Insulting people usually gets you nowhere, and with a deal like this, they know the car is worth a substantial amount more than listed, but they want to get rid of it.

Moola Mind Caution: Don’t be Insulting.

Instead of being insulting, and feeling like I’m in “attack mode,” I use a far different approach. I put everything on me. Instead of making an “offer,” here is the secret sauce.

As were talking back and forth about the car, I snuck in something like this. “Well we love the car, but I think we may have overstepped our budget by coming and looking. I’m concerned it may be a little higher than we want pay. what were you asking again?”

I follow up with this. “I know you can’t come down this far, but we wanted to stay around $8,000. Is there anything you guys can do on price? If not, I completely understand.”

This does a lot of things. First and foremost, it defuses all tension. They feel like (and I do to) we are working together to find a good fit. Its not us against them in a battle for best price. They realize that its out of our budget, and has nothing to do with the car in any way. They are now trying to figure out the situation that might work best, realizing they will need to come down in order to make the sell.

Moola Saving Tip 4: Defuse the tension. Move the focus away from the item.

To quote from the first paragraph, “Most people don’t like the hassle of selling their car, and just want to get rid of it. This can play to your advantage.” They want to sell the car just as much as you want to buy it. The only thing they want to avoid is feeling like they got ripped off. This is key. They are already highly motivated. They want to get rid of the car and avoid having to deal with taking more calls, meeting people, test driving, and everything else that goes along with selling a car. They simply want to avoid feeling like they got a raw deal. By shifting attention away from the car, it also moves the attention away from getting ripped off. They don’t feel like someone is trying to take advantage of them. Instead, they see a willing buyer that has a budget. The new focus is finding a suitable price that meets their needs and the budget of the potential buyer.

After bringing it up this way, they had no other choice. If I was going to be their buyer, then they were going to have to come  down on price. Now don’t be hard to work with. Part of this process is finding middle ground. You can’t hold too firmly to the budget. This helps them settle their fears of coming down too low on price. In this instance, we were finally able to settle on a price: $8,650. They were excited, and so were we.

Total Savings: $2,425

I saved a ton on this car, and even more if I were to list the prices for buying it used from a dealership.

So next time you’re negotiating used car price, hopefully these will tips will help.

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Jake

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