How much off list price can I reasonably expect to get from a dealership on a used car?

Question

Background: I'm looking at buying a used 2012 - 2013 Honda Civic from a dealership. This is my first ever car purchase, and with my lack of knowledge I am concerned that I will overpay in negotiations.

For the purposes of this question, let's leave it as generic as possible. Assume normal conditions (stable market, no accidents, fair car condition, good credit, etc).

Question: How much off list can I reasonably expect to get from a dealership?

For instance, are the KBB (Kelly Blue Book) upper and lower bounds pretty much absolute, or is it advisable to go even lower than that? Is there a common rule of thumb that applies to figuring out the lowest possible value for a car, so I have a good target in mind going into the negotiation.

Answer 1

There are publications (the "blue book", available in many libraries) and websites (I believe cars.com has this, no endorsement implied) which can give you the typical prices dealers pay for used cars of a particular make and model, and the typical prices consumers pay to purchase those used cars from the dealers. Sometimes major accessories are also factored into these tables.

This will be a range; you then have to judge where in the range a given vehicle is based on its condition and how it's equipped. This involves a combination of judgement and guesswork. Where you're located may also affect it.

Then you have to decide how much you want that particular car and what price you consider tolerable.

Knowing that, you can go to the dealer and discuss what price you can get it for. Remember that he has all the same resources available, so if you've done this right you will probably wind up agreeing on the "tolerable" price.

If you can't get it at or under the price you've decided you're willing to pay, walk away. Either you will find another, or this dealer will come down... or you'll discover that your guesses were off and you can recalibrate your expectations.

Personally, I would go for something older than that. Price decays almost exponentially over time, until it asymptotically reaches the "anything that rolls is worth at least..." mark.

Answer 2

Former used car salesman here. Blue book value is a fine starting point, but you have no idea what the dealership paid, and it doesn't matter. Start by finding the Edmunds TMV for your area - that will give you an idea of what you're getting into.

Civics sell themselves so don't expect any dealers to be giving the car away.

Answer 3

As with any purchase, the item is worth the crossover of what a) someone is willing to sell it for and b) someone is willing to buy it for at c) that exact moment.

It's easy to understand a) and b), but c) is the kicker. You can go talk to the dealer, just seeking information, and he might say $10k is his bottom line (backed up by KBB) but that's his answer knowing you're not buying right then. His answer might be alot different when you have a stack of $100's in your hand.

The answer is also different with a private seller rather than a dealer. You really don't gain much from a dealer, except he'll probably dress up the bad parts for you (i.e., so you can't tell it has problems, raising the price).

There's no answer as to how much you can expect to get off the KBB, there's so many factors involved.