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Negotiating a Good Price for a Used Car

Negotiating a good purchase price on a used carOne of the most effective ways to reduce the cost of a used car that’s for sale is to get a good deal on the advertised price. There are a number of highly effectively ways to negotiate a good deal:

  • Research the market – looking at Buyers Guides such as Parkers can be useful, however the prices often don’t relate to actual sale prices and prices are often determined by what buyers are prepared to pay. For this reason it’s worth researching dealers and local second hand car prices online to determine roughly how much vehicles cost. Slightly older models can be cheaper, similarly early models of vehicles that have undergone significant design changes can be more cost effective. At least being aware of market values makes it easy to determine if a car is a good deal or not.
  • Identify faults with the vehicle – look over the car in great detail during the test drive and look for any faults or non-working features. At the very least, these can be rectified before purchase (when buying from a dealer) or be used as negotiating points for reducing the price.
  • Paying with cash – depending on the size of the used car dealer, cash may or may not have an impact on how easy a car price can be negotiated. Cash can be good for smaller dealerships as they can declare less profit for tax purposes, however for larger dealers this has less of an impact and cash can even become a hindrance in terms of banking compared to cash transfers or bankers drafts. For private car sellers, cash can be a great motivator for a discount as its instant and easier than having to bank a payment – however it’s still important to get a receipt for cash payments.
  • Part exchange – if you have an existing car that you need to get rid of as part of an upgrade, part exchange can be a great way to kill two birds with one stone if buying from a dealer. The money offered for part exchanges can vary wildly and often depends on the value and level of profit being made on the car being bought. Some dealers offer minimum values offered for part exchanges which can be good if your existing car is worth less as a private sale however sometimes, depending on the car and market conditions, selling a car privately via online car dealers or listings can be more profitable. It’s important to take into account the costs of advertising cars though, as this can be expensive with the larger sites such as AutoTrader.
  • Keep emotion out of the negotiation – a well-known technique used by car dealers is to become as friendly as possible during a car sale as it puts the buyer at an instant disadvantage whilst still feeling like they’ve got a good deal. It’s important to be aware of this technique when looking to buy a car by keeping emotion out of the deal, negotiating based on the realities of the market and the vehicles condition as well as trying to avoid being overly excited or interested in the car you’re looking to purchase as they will be exploited by experienced car dealers.
  • Buy towards the end of the month – car dealers often have targets to reach in terms of sales therefore when buying from a dealer, it can be beneficial to buy towards the end of the month when sales targets are trying to be achieved. It can be possible to negotiate harder at these times and get a better price. Similarly when new stock has come in but can’t be displayed until existing vehicles have been sold, which often occurs soon after new registration plates have become available in March and September. At these times of the year, the used car market is often flooded with vehicles that have been part-exchanged for new registration models therefore with more choice and cheaper prices.
  • Be prepared to walk away – keep in mind that more often than not, there will be another deal to be made elsewhere unless the car is very rare, or your need for a car is urgent. If negotiations have stalled and the price is no longer favourable, it’s important to be willing to walk away. The dealer may have reached their limit in terms of discount in which case they will be unable to negotiate any further in which case this might not be the right car for you. If you do say you’ll walk away, the dealer might be able to offer you a further incentive, e.g. free road tax or a tank of fuel to sweeten the deal. If a private seller is desperate, being prepared to walk away can also help push for a better deal especially when coupled with a cash buyer.

Hopefully by using our tips, you can save significantly on the purchase of a second hand car, but if you have any additional tips please add them in the comments below.

 

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