Take the 2-minute tour ×
Personal Finance & Money Stack Exchange is a question and answer site for people who want to be financially literate. It's 100% free, no registration required.

I'm going to be looking for a used car here from a dealer, and I'd like to be as informed as possible when entering negotiations. A dealer has the car I want, used (looks like it was brought back from a lease), and I'm wondering how to estimate what they have invested in it. Is there a guideline for this, or any insight that can be offered?

share|improve this question
add comment

4 Answers

up vote 6 down vote accepted

There's no rule of thumb -- people get ripped all of the time on trade-ins or when they sell cars to the dealer.

I think with used car negotiations, demand for the car is more important than their cost. If you're talking a 2007 Kia, there will be lots of room. If it's a 2009 Honda, they won't even discuss price.

In terms of negotiations, you'll only get the best price if you're willing to walk away at most dealers. I usually pick 2-3 candidate cars at different lots and show up on the last day of the month. If it's busy, look at the wall and find the #1 salesman and be a pain in the butt. Refuse to listen to the 4-square speil and walk away slowly if he doesn't negotiate. When I was in high school, my dad almost ran over a car salesman who literally jumped out in front of the car as we were leaving. My dad got his price and signed the contract right in the car.

share|improve this answer
1  
I hate the four square. Last one I saw I turned upside down and said "If I see that again, I'm leaving." Thanks for the advice - I just have no idea how low to go on the cars I'm looking at. –  Nic Jan 8 '11 at 5:31
    
Look around on the net, private sales, dealing listings etc. Figure out what the price range is and go from there. Don't be intimidated -- have fun! –  duffbeer703 Jan 8 '11 at 16:05
7  
I love the four square. It lets me quickly communicate how I want to negotiate. Step 1: I put a giant X through monthly payment and say I'm not going to discuss monthly payment. Step 2: I put a giant X through interest rate - Either pay cash or pre-arrange financing elsewhere. Step 3: I usually don't trade in cars, but sell them privately so I put a giant X through trade-in. That leaves 1 square for total price. –  Alex B Jan 8 '11 at 16:49
1  
@ Alex B. You didn't mention writing your own terms on it. I enjoy writing all over it and underlining what I've written multiple times as I talk. Even better, stabbing my finger at it and saying, "It says it right there." –  gef05 Jan 8 '11 at 21:54
add comment

The low end lots generally buy at auction and add $1000 to their cost. Volume is their key. Except for bait cars, the really nice one to get you into the dealership, the longer a car sits the better your options to deal. Trouble is, if the car sits for weeks it probably has something wrong with it. My advice, as a former dealer lower end dealer, is set your price and buy the best you can afford. If a dealer is a few hundred dollars over, just let him know. If they want to move the car they will meet your price. If not, walk away.

share|improve this answer
add comment

It's mostly talking about new car purchases, but I think many of the points addressed in this extremely good previous answer may help. The true gem is an article linked in one of the comments.

share|improve this answer
add comment

Of course, there is no fixed margin – it all will depend upon the condition of car, the model, make, year and all.

share|improve this answer
add comment

Your Answer

 
discard

By posting your answer, you agree to the privacy policy and terms of service.

Not the answer you're looking for? Browse other questions tagged or ask your own question.