How to Negotiate When Buying a Used Car: 5 Tips

Once you’ve decided to buy a used car, you’ll need to brush up on your negotiation skills before you head out to the dealership. Planning ahead and knowing what to expect during the process can help you avoid overpaying. With just a little prep work, you could save yourself quite a bit of money on your next vehicle.

Also, don’t forget about car insurance. Be sure you’re all set up with the right coverage before you drive the car off the lot. An independent insurance agent can help you get coverage that meets your needs and budget. But first, follow these basic guidelines when negotiating a used car price. 

Steps for Negotiating Your Used Car Price:

1. Find out the car’s market value upfront

2. Make your opening offer

3. Make a counteroffer

4. Say yes (if the deal is right)

5. Seal the deal

1. Find out the car’s market value upfront

Whether you’re looking for an SUV, truck, or car, it’s vital to know the value of the car you’re looking at before attempting to haggle on a price. Research the current market value for cars you’re interested in by checking pricing guides such as Edmunds or Kelley Blue Book. Getting pricing information from these impartial sources can allow you to start negotiations from a place of strength and confidence.  

Also, get pre-approved for an auto loan. That way, you’ll know how to approach a total purchase price instead of a monthly payment amount. If you negotiate a monthly payment, it will obscure the price of the car. You should also have a firm budget already in mind before you even start this process.

2. Make your opening offer

Once your opening offer is on the table, the tone is set for the rest of the negotiation. Ideally, the salesperson will make the first offer. Hopefully, it will be lower than the maximum amount you can afford to pay.  

Set your opening offer lower than the current market value price, but not so low that the dealer will laugh you off the sales floor. After you make the offer, carefully watch the salesperson’s body language, tone, and facial expression. Those things can tell you all you need to know. Usually, if the salesperson takes the offer to the manager, you’re in the right neighborhood. 

3. Make a counteroffer

When making a counteroffer, raise your opening offer by smaller and smaller increments, perhaps $500, then $250, then $100, if the negotiations go on that long. Proceed slowly and write down your offers so you don’t forget where things are.

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4. Say yes (if the deal is right)

If you’re satisfied with the latest price, review all the numbers before you accept the deal. Get a breakdown of any fees and make sure you’re only paying the price of the car, sales tax (in most states), and documentation and registration fees. If you’re satisfied that everything is as it should be, it’s probably time to seal the deal. 

5. Seal the deal

If you’ve agreed to the terms, it’s time to meet with the finance manager, who will work with you through all the paperwork (and, of course, try to sell you all kinds of extras). This is when you can compare the dealer’s financing offers to the pre-approved loan from your own lender.  

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How to Find the Best Car Insurance for Your Used Car

You always need car insurance for any used or new vehicle you buy. You should, in fact, check out insurance costs and alert your independent insurance agent before you seal the deal. Either way, there's one way to make sure you're getting the best value on your car and the best value on its insurance coverage: comparison shopping. 

Independent insurance agents make comparison shopping easy because they work with many top-rated car insurance companies and can get you several quotes to find the best deal. Local agents are ready to help you get the auto coverage you need at a price you can afford.