Used Car Buying Guide: Negotiating the Deal (Part 2) Monday, Apr 16 2007

This post refers to negotiating with a private seller, not a dealer. I will (hopefully!) write a post later on about how to negotiate with a seller, which is a whole different story.

So you’ve found a car you love? Now it’s time to negotiate the deal. It’s important to not let on to the seller that this is a car you can’t live without. Here are a few tips on how to negotiate, and why playing hard to get is often to your benefit.

1. Be prepared to ask a lot of questions from a private seller, even before you look at the vehicle.

a. Why are you selling the car? People don’t usually sell a car they love. Maybe it really is a great car, but the seller can no longer afford it, but maybe there are considerable repairs that need to be made.

b. How many miles are on the vehicle? Keep in mind that about 12,000/year is average. If the car has high miles, ask if the car is primarily driven on the highway or around town. (Highway miles are less taxing on the car.)

c. What condition is the vehicle in? Ask about specifics, like the paint, tires, AC, etc. This not only gives you a good idea of what condition the car is in, but also allows you the opportunity to access how honest the seller was with you when you actually look at the car. If the car is in worse condition than you were led to believe, there may be other hidden problems. Ask if there are any existing issues you should be aware of.

d. Do you have all maintenance records, including tune-up and oil change receipts? Although the majority of people do not have all records, they should be able to provide records of major repairs. But remember an owner who was attentive enough to keep all records likely was meticulous about taking good care of the car. Also, keep in mind that keeping all future records is a major selling point, and will likely expedite any future sales.

e. How much are you asking for the car? This question implies the price is negotiable, and the seller’s response will likely give you a better idea of how much they are willing to negotiate.

2. When all questions are answered to your satisfaction, schedule a time during the day to look at the vehicle. Be sure to take a copy of the Used Car Buyers Checklist with you.

3. Once you decide you are ready to make an offer, it’s time to play hard-to-get. In order to make it clear you aren’t completely in love with the car:

a. Tell the seller you aren’t completely sold on one (or more) feature(s) of the car. Maybe you don’t like the color, or prefer a manual to an automatic transmission.

b. Tell the seller you are interested in the car, but it is out of your price range.

c. You have looked at other cars you like just as well, but are in a lower price range.

4. Once you have established your reservations about the car, or the price, reiterate that the car is priced too high for you, and ask what the seller’s best price is.

5. Negotiate till your heart’s content, but be aware the seller will only go so low. If the car is indeed a good vehicle, the seller knows he will find a buyer who is willing to pay a fair price. Only you can decide how much you are willing to pay (and how much you can afford).

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Used Car Buying Guide: Do Your Research (Part 1) Thursday, Apr 12 2007

This is Part 1 in a series of used car buying tips.

Do your research. This can be time consuming, and boring, but it can also save you loads of time (and trouble) down the road. Here’s some tips I found helpful in my recent used car purchase:

1. Edmunds is a good resource for true market value, pricing, unbiased consumer and expert reviews, and expert advise on how to get a fair deal. The consumer reviews were particularly helpful for me. I had scheduled a test drive for a particular year and model of a vehicle and after reading consumer reviews on Edmunds, I learned very quickly this model and year had serious electrical problems. I canceled my appointment and saved both the seller and myself some time.

2. Kelley Blue Book is a good resource for checking the trade-in, retail, and private party value of a particular vehicle, depending on the condition and the amenities of the vehicle. Knowledge is power. Never go look at a car without having a clear idea of the market value.

3. Know how much you can afford. The KBB website has a financing calculator on that lets you enter in the requested loan amount, interest rate, and term of the loan. The calculator will generate an average monthly payment and the total cost of the loan. This may prompt you (as it did me) to consider a 3 or 4 year loan, as opposed to 5+ years. Check out Jeremy’s post (Generation X Finance) on why car loans over five years may be a bad idea.

3. Once you know how much you can afford and have decided on certain makes and models you are interested in, there are other factors to consider. Sports cars usually have higher insurance rates. SUVs are often gas-guzzlers. Certain cars require only premium gas. Other vehicles are notorious for higher maintenance costs. Maybe the price of the vehicle is higher because it is four-wheel drive or all-wheel drive, and you don’t really need this feature. These are all things to consider.

3. Before testdriving a car, be sure to get the VIN# and run a Carfax report. Many dealerships provide these upfront. You often have to have ask private sellers for the VIN though. A Carfax report will tell you how many owners the vehicle has had, any repairs that have been done on the car, whether the car has been in any accidents, has been salvaged, stolen, flooded, or damaged by fire. This detailed vehicle history report is invaluable. Get the VIN# before even looking at the car. I recently looked at several vehicles, one of which seemed too good to be true. The car was beautiful on the outside, seemed to run well, and was well under KBB price. I wanted to drive it off the lot. But after running the Carfax report I found that the car had been “salvaged beyond repair” and was resold at an auction. Thousands of cars were virtually destroyed in Hurricane Katrina and have been rebuilt (on the outside) while water damage corrodes the innards of the vehicle. Carfax reports also tell you how many owners the car previously had. If a dealer or seller refuses to give you the VIN, don’t bother even looking at the vehicle. Huge red flag.

4. Be patient. Reading automobile reviews is not the most engaging reading for most people, but it does pay off. No part of the car-buying process should be rushed, especially the research.

Happy hunting!

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