When you choose a good used car, one of the biggest questions on your mind might be, “How much will dealers come down?” This question often arises when you want to ensure you’re getting the best deal possible without overpaying.
Therefore, understanding the factors that influence the price and knowing some negotiation tactics can help you get the best deal.
Factors Influencing Used Car Prices
Understanding how used car pricing works is the first step to becoming a savvy negotiator. Several factors influence the price of a used car, and knowing these can give you an edge when it comes to negotiating with dealers.
Age and Mileage
The age and mileage of a car are significant determinants of its price. Older cars with higher mileage tend to be cheaper because they are closer to the end of their useful life. Conversely, newer cars with lower mileage are more expensive because they have more life left in them.
Condition
The condition of the car is another important factor. Cars that are in better condition, both mechanically and aesthetically, will fetch higher prices. It includes the state of the engine, transmission, brakes, tires, and the interior and exterior appearance.
Market Demand
The demand for specific makes and models can also influence prices. Popular models that are in high demand will generally be priced higher. On the other hand, less popular models may be priced lower to attract buyers.
Location
The location where you are buying the car can also affect the price. Prices can vary significantly from one region to another due to differences in demand, supply, and local economic conditions.
Seasonality
Prices can fluctuate depending on the time of year. For example, convertibles may be more expensive in the summer when demand is higher, while SUVs may be more expensive in the winter.
How Much Can You Negotiate For a Used Car?
You can definitely negotiate the price of a used car from a dealership. Most dealers expect some haggling and price their cars with room for negotiation. The amount you can negotiate varies based on the car’s market value, condition, and how long it has been on the lot.
Dealer Markup
Dealers typically mark up the price of used cars to make a profit, which can range from a few hundred to several thousand dollars. Mark up can give you an idea of how much room there is for negotiation.
For example, if a dealer has marked up a car by $2,000, you might be able to negotiate a price reduction of $1,000 to $1,500.
Typical Discounts
On average, you can expect dealers to come down by about 5-10% of the asking price. However, this can vary based on the factors mentioned earlier. For instance, if a car has been on the lot for a long time, the dealer may be more willing to negotiate.
However, if the car is in high demand, the dealer may be less willing to lower the price.
Tips for Negotiating a Better Price For a Used Car
When you’re negotiating the price of a used car, it can feel challenging when the dealership says the price offered to you is already the best price. However, with the right knowledge and strategies, you can secure a great deal. Here are some tips to help you negotiate a better price:
Do Your Research
Before heading to the dealership, research the car you are interested in. Websites like Kelley Blue Book and Edmunds can provide you with the fair market value of the car. This information can be helpful during negotiations.
It is the fair market value that can help you determine whether the dealer’s asking price is reasonable and give you a benchmark for your negotiations.
Inspect the Car
Thoroughly inspect the car for any issues. If you find any problems, use them as leverage to negotiate a lower price. Consider getting a professional inspection to identify any hidden issues.
A professional inspection can reveal problems that are not immediately apparent, such as engine or transmission issues, which can be costly to repair. If the inspection reveals significant problems, you can utilize it to negotiate a lower price or ask the dealer to fix the issues before you buy the car.
Be Prepared to Walk Away
One of the most effective negotiation tactics is being ready to walk away. If the dealer senses you’re prepared to leave, they may be more likely to lower the price.
By stepping away, you convey that you are not in a rush to make a purchase and are willing to explore other options if you can’t secure a favorable deal.
It can put pressure on the dealer to make a better offer.
Timing Matters
Timing can also help you get a better price. Dealers may be more willing to negotiate at the end of the month, quarter, or year when they are trying to meet sales targets.
Additionally, shopping for a car during off-peak times, such as during the winter or on weekdays, can also increase your chances of getting a better deal.
Additional Costs to Consider
When buying a used car, you also need to consider additional costs beyond the sticker price. These costs can add up and affect your overall budget.
Taxes and Fees
Keep in mind that the sticker price is not the final price. Taxes, registration fees, and other charges can add up. Make sure to factor these into your budget. Depending on where you live, these additional costs can be significant.
For example, sales tax on a car purchase can be several hundred dollars or more, and registration fees can also be substantial.
Financing
If you are financing the car, shop around for the best interest rates. Sometimes, dealers offer financing, but it may not always be the best deal. Compare offers from banks and credit unions as well.
Getting pre-approved for a loan can give you more negotiating power and help you avoid high-interest rates that can increase the overall cost of the car.
