In Step One, we talked about what kind of car we need.
In Step Two, we decided how much we can afford.
In Step Three, we looked at some places to find a good used car.
Step Four concerned some research to make sure this car is a good deal.
Now we are at step five – negotiating the price. This is a the place many people loose out, but it this is where you can make a pretty good deal, a great deal. First of all, NEVER PAY THE ASKING PRICE!.. Cars, and especially used cars, are the most negotiated thing in the world today. It is just expected. As the buyer you are already in a good position. The seller has already had to name a price. But also, you have to go next. It’s your turn. Don’t blow it. Here is an example of a typical negotiation. In this exchange, we have decided ahead of time that the car is worth about 5000.00. We need to start with a much, much lower price if we expect to end somewhere near this number. Depending on the price, I would start off at something close to 25% less than asking price. That is just a ball park figure, but you get the idea.
Buyer: So what is your bottom line price? (this alone is a trick to get the seller to start off with a lower price than was advertised. Sometimes it works, and if it does the same negotiation happens, just better for you). In this example the seller sticks to the asking price as a starting point.
Seller: Well I am asking 5500 dollars for it.
Buyer: It is pretty close to what I am looking for and it seems pretty good, but you know it looks like the tires are going to need replacing soon. And I noticed some slight sound in the transmission.. I could give you 4000 for it, I know it’s a lot less than you wanted b ut that seems fair to me based on the problems ( blah blah blah)..
Seller: Well that is not even near what I had in mind. I don’t hear anything in the transmission and the tires aren’t that old.. I could go down to 5000, but that is it!
Buyer: Well, I can’t be sure about the transmission, but I also noticed some rust in the fender area, I know it is not bad yet, but it looks like it could get worse quickly.. I have a little extra money I could add to the 4000. I guess I could give you 4500. Would you take 4500?
Seller: No, I just couldn’t. I mean I need this money to pay off a small loan.. I can’t take that for it.
Buyer: Okay. I understand. Let me know if change your mind.. You have my number. I will keep looking, but you never know..
Seller: Okay. How about meet me halfway at 4750.00
Buyer: Okay.. I do like it, could you throw in that pair of fuzzy dice in the window?
You got a deal.
We saved 750.00 dollars on this deal.
It doesn’t always go this way of course, but you get the idea. I know this seems simple, but so many people I talk to just don’t want to do it? Trust me, you can do it. Play it through in your mind before you get to the “negotiation”. You need to know pretty close to the maximum you can give.. Sure there is some wiggle room, but stick to your plan. You may have to really walk away sometimes. It can go many ways. I assure you, when you get that car, and save hundreds of dollars off the price, you will feel good that you did it. It is SO worth it. Congratulations.
In step six we will talk a little about the whole licensing, registration part.
Any comments? I would love to hear from you if you thought this was helpful.