Buying a car
How to negotiate buying a car
You’ve done your research on the best new car or used car, and made the decision on which is right for you. In fact, you have found one that ticks all the boxes which falls within your budget. Ideally, you’d like to get it for a better price, so you have money left over for that weekend away you promised yourself. The art of haggling may seem daunting at first, but it’s not that hard to do. In fact, you don’t need a poker face and nerves of steel but rather a friendly smile and the willingness to give it a go. You can always take a friend with you for moral support.
Settling on a better price when buying a new or used car is important, but equally important is getting a good deal which may include extras like the roadworthy certificate, car mats, a full tank of fuel and extra warranty cover.
How to buy a car: Private vs. Dealer
Buying from a private seller gives you the best chance of negotiating a better price. A private seller is likely to have limited experience in selling a car, and is often motivated to sell, whereas a dealer can prove a little more difficult to budge on price. This said, a dealer can often sweeten a deal with those extras previously mentioned, plus a dealer will accept your trade-in.
How much to pay
Buying privately can often save you thousands, however, there is no warranty on the vehicle (unless it is the balance of the manufacturer’s warranty). A dealer will also only move so much on price, but will often offer extras such as tinting the windows or include on road costs to get the deal over the line – and they’ll take your trade-in!
Taking into account what the car needs (on road costs), and what you want for it to meet your expectations (that small scratch fixed), draw attention to these things when starting negotiations. Ideally, you prefer the seller to take care of these items but you should be open to ‘horse trading’ as you both strive to reach an agreement.
The price is right
Once you have settled on the terms of the deal, ask the seller what is the best price they’ll accept for the car. A private seller will either state a lower price, or ask how much you’re offering. The dealer, who is more experienced, will showcase how good a deal you’re getting with extras like the tinted windows. In order not to lose a sale, a dealer will eventually ask how much you’re offering.
Next comes the offer. This is the offer you make that cuts to the chase, which shows you mean business and are willing to buy if the price is right. Your offer should be around 10-15% off what the asking price is, or about $5,000 off a $50,000 car. A motivated seller will often throw back a counter-offer, which will give you a better indication of how flexible and motivated they are. You’re almost there… it’s now time to make your final offer. This offer needs to reflect all of the research you’ve done so far, the condition of the car, and your budget.
The ‘If’ and ‘Then’ technique
I find one of the best negotiating techniques to be the ‘if’ and ‘then’ approach. “If you’ll consider this price for your car, then I would give you a deposit today.” This qualifies you as a genuine buyer who is willing to shake hands on a deal. Most of the time, a deal is reached here.
So how do you know you got a good deal? Simple. Just ask yourself whether you could find another car in the same or better condition, for a better price.
What if my offer is declined I hear you ask? Easy, you can either keep haggling if you’re close to making a deal, or leave your contact details in case the seller changes their mind. Then simply walk away. More often than not, a seller will see that you are serious and accept your offer before you walk away – or they’ll call you within a day or two to accept your offer.
Good timing can be an important aspect when buying a car. The best time to approach a dealer is about a week before the end of the month, as this is when they need sales to reach their monthly targets. With private sellers, anytime is a good time, however, winter and over the holidays is the best time, as there are fewer buyers around then.
Haggling is an easy art to learn which will benefit you when buying those big-ticket items such as a car and a home. After all, it’s just two parties seeking a favourable outcome.
This article is written by Ross Vasse.
Ross Vasse is the author of Car Hunters: The Best Trade Secrets Revealed and compiles the Complete Classic Car Value Guide annually. He is a founding partner of Survivor Car Australia magazine, and performs duties as an ‘expert witness’ in appraising and valuing motor vehicles Australia wide.
He has had a lifetime of experience around cars, learning the trade secrets that others in the car industry do not want you to know.
The information is intended to be of a general nature only. We do not accept any legal responsibility for any loss incurred as a result of reliance upon it – please make your own enquiries.