Negotiations with Used Car Dealers

[Dangermouse]

I am in the market for a replacement for one of my DDs and against my better judgement I am looking at Used Car Dealers. Normally I buy privately, and have had good success with negotiating a fair price with past cars, but can’t find what I am looking for that way at present.

I am wondering what people typically have been able to negotiate as a discount from the advertised price of a car that they have bought. I am looking at cars in the $10-20k range and the dealers typically have a $600 “fee” on top of that.

The first guy I talked to thought he was Carmax and wouldn’t budge off either amount, so I walked.

[dmc6960]

The best tactic I've ever used was offering the sticker price on a car I thought was fair. In cash - out of pocket. Meaning, the sticker price is the amount of money I'll give you right now. No more. So you adjust the price accordingly so that after all taxes, license, and registration fee's, I write you a check or give you cash and I drive away in my new (to me) car.

Bought a $7200 Intrepid for about $6600. Paid $7200 out of pocket.

Ended up waiting an extra hour to buy the damn thing though because that dealer had never accepted a cash payment before and was not setup yet to do it. Apparently they had only been running the place for 2 weeks.

[Roman Legion]

When I was in the market for a used motorcycle, I had no choice but to go private party. This local shop was trying to charge almost $3k for a 21 year old motorcycle that wasn't in the best of shape. Cracked body, missing a mirror, et cetera. He wouldn't budge on price, and that bike is still sitting in their inventory and they won't reduce the price at all. I was offering to pay cash out of pocket than and there, but their greed lost them the sale.

I went on craigslist and found a good deal on a 14 year old Ninja and the seller let me test drive it too, unlike the shop. I hate going through dealers for anything at all. I mean, I recently got around to fixing my key fob, since the ring hole broke off. I just wanted a new case, they tried to sell me a whole new key fob for $100. I went on amazon, got it for a grand total of $4.43

I'd suggest you avoid them if you can, but it never hurts to try negotiating with them I guess.

[Exolis]

For that price range, you could also potentially buy a new vehicle. I don't have any experience buying used car (other then my DeLorean), but you can get some good deals on new cars. You also get a full warranty on the vehicle so you may save on maintenance. There's also some play with discounts on New cars such as end of the month deals, Model Years being cleared out for new model year and other things. When I leased my Nissan Rogue, on top of my employee discount I got a new graduate discount (within 2 years are something).

I know it doesn't help with what you are asking about Used Car dealerships, but might be something to consider.

[Totally 80s]

Dave Ramsey says new cars are only for millionaires. They are the only ones who can afford the massive depreciation you take when you drive off the lot.
http://www.daveramsey.com/article/saying-no-to-new-cars/lifeandmoney_automobiles

[NightFlyer]

Sounds like you got the game down - you walked away. Best advice is don't be afraid to walk away. If the price you want to pay is fair, you'll eventually find someone to take your money.

One tactic that has proven useful is claiming (even if you don't really know) that you know that the Manheim auction (wholesale) price of the car would be $X,XXX, thus showing that you're aware of the dealer markup / profit margin on the car you're wanting to buy. Many used car salespersons are taken back when they hear the customer mention the Manheim auction. It's also useful when negotiating a trade-in value.

EDIT: As others have said, in the $10k-$20k range, you could get you a nice new car, as opposed to a used car. If you're interested in new, I could get you a friends discount for any Chrysler/Dodge/Jeep/Fiat product that you may be interested in. Just shoot me a PM.

I wouldn't buy a Nissan, or any other Asian brand/marque vehicle though, even if my life depended on it :nana1:

[Exolis]

Dave Ramsey says new cars are only for millionaires. They are the only ones who can afford the massive depreciation you take when you drive off the lot.
http://www.daveramsey.com/article/saying-no-to-new-cars/lifeandmoney_automobiles

Lol, I'm anything but a Millionaire and I can easily afford my car and even got it loaded. He is right about the depreciation, but he doesn't mention about maintenance and wear and tear on used cars. I could still be driving my 96 Tahoe, kept dropping money in maintenance, repairs and most of all, Gas and I would be paying roughly the same amount I do now monthly for my new car. I worked at a dealership before and the typical warranty on a used car really isn't worth much. Most a Used car dealership will do on lease returns is detail it, replace filters, inspect it and put it back on the lot.

Not sure who Dave Ramsey is but he doesn't come off as someone who is unbiased.

[Totally 80s]

Lol, I'm anything but a Millionaire and I can easily afford my car and even got it loaded. He is right about the depreciation, but he doesn't mention about maintenance and wear and tear on used cars. I could still be driving my 96 Tahoe, kept dropping money in maintenance, repairs and most of all, Gas and I would be paying roughly the same amount I do now monthly for my new car. I worked at a dealership before and the typical warranty on a used car really isn't worth much. Most a Used car dealership will do on lease returns is detail it, replace filters, inspect it and put it back on the lot.

Not sure who Dave Ramsey is but he doesn't come off as someone who is unbiased.

You paid cash for your new car? If you did then you definitely can afford to buy a new car. IMO if you can't buy your car with cash then you can't really "afford it".

Also, there is a third option to either buying a new car or keeping your 96 (17 year Old) Tahoe. You could buy a five or six year old used car. I think that is what he is suggesting, not driving the same car for 40 years. New cars lose 70% of their value in the first four years.* (according to the article)

Back on subject. If you have the cash to buy the used car outright, don't tell the dealer you will be paying for it in full. Tell him you want to finance it. They make a ton of money off the financing. Then when you strike a better deal, pay the car completely off on the first payment.

[dmc6960]

Back on subject. If you have the cash to buy the used car outright, don't tell the dealer you will be paying for it in full. Tell him you want to finance it. They make a ton of money off the financing. Then when you strike a better deal, pay the car completely off on the first payment.

Watch out on this. If the dealer is getting an incentive from the bank for financed cars, then there is probably some fine-print in there to guarantee they (the bank) don't loose money on the deal. Look out for fees regarding paying off the dept early. In my case the cash in hand helped seal the deal with the dealer.

[Roman Legion]

If you're interested in new, I could get you a friends discount for any Chrysler/Dodge/Jeep/Fiat product that you may be interested in. Just shoot me a PM.

I'd say go for the Fiat 500, inexpensive, not bad looking and surprisingly not bad to drive. My father is looking to get a Fiat 500 Abarth, so this friday, we are going to test one out, I hve only driven the base model 500 and it wasn't bad. It was automatic, so I didn't care for that, but I'm sure they come in manual.

[OverlandMan]

Lol, I'm anything but a Millionaire and I can easily afford my car and even got it loaded. He is right about the depreciation, but he doesn't mention about maintenance and wear and tear on used cars. I could still be driving my 96 Tahoe, kept dropping money in maintenance, repairs and most of all, Gas and I would be paying roughly the same amount I do now monthly for my new car. I worked at a dealership before and the typical warranty on a used car really isn't worth much. Most a Used car dealership will do on lease returns is detail it, replace filters, inspect it and put it back on the lot.

Not sure who Dave Ramsey is but he doesn't come off as someone who is unbiased.

:offtopic2:

Dave Ramsey is a talk show host who developed some plans and programs that promote "Personal Finance Responsibility" (ie: One of his slogans is "Act your wage!").

Without diving off into that abyss, which is certainly filled with strong opinions, I'll say that regardless of buying new or used both have pros and cons. Another consideration if you don't put many miles on a vehicle is leasing. Leasing can be attractive provided you negotiate the residual value of the vehicle (the value of the car at the end of the lease terms) to your advantage.

Back to the OP, Dermot --> What are you looking for? I scanned the thread but didn't see any mention of it.

I bought a used car off a dealer lot years ago (1999 maybe?). I found one that had been sitting on the lot for a while and found they were more willing to deal on it than a similar vehicle (Same model and trim) they'd had for just a few days. I still think private party is where the best deals are in the used market.

[Roman Legion]

:offtopic2:

Dave Ramsey is a talk show host who developed some plans and programs that promote "Personal Finance Responsibility" (ie: One of his slogans is "Act your wage!").

Without diving off into that abyss, which is certainly filled with strong opinions, I'll say that regardless of buying new or used both have pros and cons. Another consideration if you don't put many miles on a vehicle is leasing. Leasing can be attractive provided you negotiate the residual value of the vehicle (the value of the car at the end of the lease terms) to your advantage.

Back to the OP, Dermot --> What are you looking for? I scanned the thread but didn't see any mention of it.

I bought a used car off a dealer lot years ago (1999 maybe?). I found one that had been sitting on the lot for a while and found they were more willing to deal on it than a similar vehicle (Same model and trim) they'd had for just a few days. I still think private party is where the best deals are in the used market.

You just got me interested in the whole lease thing. Is it better to lease if you want to buy the car later or just buy the car outright? Can you trade-in on a lease? I'm not sure how that works.

[Dangermouse]

Back to the OP, Dermot --> What are you looking for? I scanned the thread but didn't see any mention of it.

I bought a used car off a dealer lot years ago (1999 maybe?). I found one that had been sitting on the lot for a while and found they were more willing to deal on it than a similar vehicle (Same model and trim) they'd had for just a few days. I still think private party is where the best deals are in the used market.



I had deliberately left that part out as I didn’t want the thread to go OT. LOL. I was trying to keep focused on the question in hand. It’s nothing terribly exciting unfortunately. Unless it makes a difference.

Buuut…..We considered new, especially as we worked out what we lost in depreciation on our Minivan over 3 years was just about what we would have paid in monthly payments. I have only ever bought one new car and that was such a PITA going back to the dealership for piddly little problems we swore, never again. But of course, never say never. A Fiat 500 would be too small, Jared.

Anyway, we settled on buying a used car for various reasons. We are paying cash (from our minivan sale) but I avoid mentioning that in discussion with the dealer as I know he wants to price it differently. I know he gets commission off the finance.

The old adage of a good negotiation is that both sides walk away thinking that they have won, but in any dealings with dealers I always feel like I am being abused. Buying privately, you know there is always wiggle room. A car listed at $14,250 can always be had for $14k, maybe less. When I list a car privately, I build it into the asking price. The seller gives a little and the buyer gets a little.

I don’t know how to find out the Manheim auction price. I know what the KBB price is, the Carmax price, the taxable value (courtesy of GA-DoR) and other dealer prices, but I don’t know how much profit the seller has in the car so I don’t want to leave too much on the table. If you google the VIN you can often find an old listing for the car, or a current listing at a higher (or lower price) which is useful to know.

So, if a car is listed at $15,000 plus $600 dealer fee, how much room is there in there. Is it just the $600? And I don’t give a damn if it is $15,500 plus $100 fee or any other combination, despite what the dealer thinks. To me, he is really asking $15,600 (plus tax obviously). And tax in GA is independent of actual sales price.


I talked to a guy today and he dropped the fee to $99 but the usual “priced to sell” on the car price. unfortunately, I assume every word out of their mouth is a lie ("it's just been serviced sir", "one careful owner", "always garaged"), so I don't want to walk away from a perfectly reasonable deal because of my inherent distrust. ;)

[OverlandMan]

You just got me interested in the whole lease thing. Is it better to lease if you want to buy the car later or just buy the car outright? Can you trade-in on a lease? I'm not sure how that works.

Leasing (in my experience) is attractive when you don't put many miles on a particular car. What you're doing is paying for X number of miles for the term of the lease. Essentially that means you're only paying for amount of the car you use instead of the entire thing. The things to watch out for on a lease are (1) The residual value of the car at the lease end. This will have a direct correlation with your monthly payment. (2) Lease-end turn-in fees. Factor these in if applicable when you're making the initial decision. (3) Going over your mileage limitations. If you exceed the miles you purchased in the lease, you have to pay overage fees (ie: 25 cents a mile). You can also purchase the car for the residual amount or just trade out of it prior to the lease end. Also, don't put a bunch of $$$ down at lease-inception. You'll never get it back unless they're adjusting the residual amount accordingly.

You can trade-in a leased vehicle before the lease ends. It's not always wise but CAN you do it? Sure.

You'll have to work out the numbers to see for a particular vehicle. It's all about the residual value of the leased vehicle.



I had deliberately left that part out as I didn’t want the thread to go OT. LOL. I was trying to keep focused on the question in hand. It’s nothing terribly exciting unfortunately. Unless it makes a difference.

Buuut…..We considered new, especially as we worked out what we lost in depreciation on our Minivan over 3 years was just about what we would have paid in monthly payments. I have only ever bought one new car and that was such a PITA going back to the dealership for piddly little problems we swore, never again. But of course, never say never. A Fiat 500 would be too small, Jared.

Anyway, we settled on buying a used car for various reasons. We are paying cash (from our minivan sale) but I avoid mentioning that in discussion with the dealer as I know he wants to price it differently. I know he gets commission off the finance.

The old adage of a good negotiation is that both sides walk away thinking that they have won, but in any dealings with dealers I always feel like I am being abused. Buying privately, you know there is always wiggle room. A car listed at $14,250 can always be had for $14k, maybe less. When I list a car privately, I build it into the asking price. The seller gives a little and the buyer gets a little.

I don’t know how to find out the Manheim auction price. I know what the KBB price is, the Carmax price, the taxable value (courtesy of GA-DoR) and other dealer prices, but I don’t know how much profit the seller has in the car so I don’t want to leave too much on the table. If you google the VIN you can often find an old listing for the car, or a current listing at a higher (or lower price) which is useful to know.

So, if a car is listed at $15,000 plus $600 dealer fee, how much room is there in there. Is it just the $600? And I don’t give a damn if it is $15,500 plus $100 fee or any other combination, despite what the dealer thinks. To me, he is really asking $15,600 (plus tax obviously). And tax in GA is independent of actual sales price.


I talked to a guy today and he dropped the fee to $99 but the usual “priced to sell” on the car price. unfortunately, I assume every word out of their mouth is a lie ("it's just been serviced sir", "one careful owner", "always garaged"), so I don't want to walk away from a perfectly reasonable deal because of my inherent distrust. ;)

I guess I don't understand the $600 dealer fee part. When I've bought used from a dealer in the past, TT&L was applied just like it was if you were purchasing new. Is that what you/they are calling the "dealer fee"?

Regardless of whether you buy from a dealer or private individual, you'll have that TT&L cost. In Texas you pay a 6.25% used car sales tax when you go to retitle the vehicle in your name. They give you 30 days to do this from the date of the sale/purchase... then they start hitting you with late fees. I'd assume most states do something similar? Seeing as you're paying cash, it makes it simpler.

[Ron]

Carmax is well known not to wheel and deal much. "No haggle price" is pretty much the way it is.

Different dealers handle things totally differently. There is no magic method, except never letting them know you have a trade in, down payment, or cash in full. That allows them to finagle the financing during the negotiation process to benefit themselves. Settle on price first.
BTW paying off on the first payment has a negative effect on your credit score.

[eagle-co94]

"Show me the Carfax..."

I have yet to use that...but I haven't bought a car from a dealer (other than online auctions) since I bought my 2nd car back in '96. I wouldn't count BMW Military sales as the base price was $2500 cheaper than the same car stateside.

As far as a 500 for men, I'd say the Abarth is your only chance. It's like buying a MINI. You need to get the S.

[Dangermouse]

Ron, yes I know Carmax are no-haggle and I consider them to be near the top of the used car tree, in terms of price anyway. (As an aside, I read an article last week about their extended warranty - $3k for 100000 miles after purchase, I think it was. Great deal if you buy a "luxury" car). There cars have been checked over and it's probably as risk-free as used car buying can be.

Overland Man - these dealers term the $600 as a "processing fee", to me it's a bullshit add-on to cover them processing the paperwork and sending the title into the state. In GA we pay the 6.5% tax to the dealer, and then when the new title comes n the mail I go to the DMV and pay the registration and tag fees directly. The dealers can't sell a car without doing the paperwork so it's just the cost of doing business but they keep it separate to keep the sticker price low and possibly as free money to negotiate with.

[Dangermouse]

One thing I have learned throughout this, is the difference between an Autocheck report and a Carfax report - Carfax reports maintenance history whereas Autocheck doesn't.

[eagle-co94]

I've only ever owned one Ford. I got it for $1 to make it a legit sale due to a blown motor. Ate replacing the motor, it did well for a year or two but then began a slow decline of falling to pieces.

[OverlandMan]

Ron, yes I know Carmax are no-haggle and I consider them to be near the top of the used car tree, in terms of price anyway. (As an aside, I read an article last week about their extended warranty - $3k for 100000 miles after purchase, I think it was. Great deal if you buy a "luxury" car). There cars have been checked over and it's probably as risk-free as used car buying can be.

Overland Man - these dealers term the $600 as a "processing fee", to me it's a bullshit add-on to cover them processing the paperwork and sending the title into the state. In GA we pay the 6.5% tax to the dealer, and then when the new title comes n the mail I go to the DMV and pay the registration and tag fees directly. The dealers can't sell a car without doing the paperwork so it's just the cost of doing business but they keep it separate to keep the sticker price low and possibly as free money to negotiate with.

Wow, then I would definitely call that BS. $600 to mail a view forms to the state? Find the price you are comfortable paying and subtract $600. Tell them that's the deal. If they counter, walk. You'll find someone who wants to deal eventually. The only issue is time. How much time do you have?

[eagle-co94]

AutoCheck also claims no responsibility for the validity of their data. AutoCheck listed my wife's car as grey market, causing bids to reach about 1/3 that of similar cars. It was a U.S. model sold in the U.S. and the owner moved to Canada and then returned to the states later. That is not Grey market, but they refused to fix it even with proof it was a U.S. model. I ended up keeping the car and selling it recently at a loss.

[NightFlyer]

I don’t know how to find out the Manheim auction price. I know what the KBB price is, the Carmax price, the taxable value (courtesy of GA-DoR) and other dealer prices, but I don’t know how much profit the seller has in the car so I don’t want to leave too much on the table.

It doesn't matter if you know the Manheim price or not - you just pretend like you do. The mere mention of Manheim tells the sales person that you know all about the wholesaling/value of used cars, thus they'll be less apt to try to play games with you on the price. But if you really want, shoot me a PM with what you're interested in, year, make, model, and trim level, and I can look up the Manheim price for you with my subscription.

[Ron]

Acronym fun moved HERE (http://dmctalk.org/showthread.php?7726-Acronym-Fun-***Split-from-Negotiations-With-Used-Car-Dealers-***)