A Tip for Negotiating on a Used Car

[Deactivated] on 04/08/2017 - 21:29

Hey guys, I just wanted to share a tip for saving (or at least knowing what to offer) on a used car that I've been using.

Basically, I try to figure out the trade-in value, and see how wildly different the sale price is for the car. For this we have to assume the dealer received the car for the trade-in value.

You can get an estimate from Carsales'/ Redbook's value tool, or pretend you own the car and apply for an instant offer (I find this is a little higher than dealer's offers).

You could even ask some dealers pretending you have that car.

For example, I found a used car I liked for $45,000, but the instant offer on Carsales is $34000. Assuming Carsales is higher than trade-in by $1000, I can guess the dealer for it for $32000.

So that's a $13000 hit I would take at $45000. If I purchased that car and tried to sell it back the next day that's how much I'd lose.

Personally, I didn't think the dealer asking for more than $6k above trade-in was reasonable for this car, so I passed.

Hope this helps someone get an idea on where to make an offer. I had no idea what I should offer, I was afraid I'd offer too low and not be taken seriously, or too high and pay too much!

Automotive

Comments

  • subywagon on 04/08/2017 - 21:37

    Thanks, very helpful if it's accurate!

    • spackbace on 04/08/2017 - 21:47

      Well hasn't been proven successful yet, so not really a tip

  • spackbace on 04/08/2017 - 21:40
    +3

    Except any major dealer has costs higher than $1k.

    Trying to buy a car for trade price, especially on a $30k+ car is setting yourself up for defeat, and will be a waste of your time.

    And you haven't even proven success with your method because the dealer didn't come to the party!

    I had no idea what I should offer, I was afraid I'd offer too low and not be taken seriously

    Honestly you were lucky they countered because you obviously offered too low an amount.

    https://www.ozbargain.com.au/node/316528

    Still looking at used euro cars? That's why they won't give it to you for close to trade value, because they have to warranty that car (3 months/5000km stat warranty), and there's every chance there will be a warranty claim on a used euro ;)

    • pegaxs on 04/08/2017 - 22:42

      there's every chance there will be a warranty claim on a used euro ;)

      This is why Euro cars are worth nothing as a trade in and cost so much to buy retail :D

      And I don't know of any Euro car we traded in that wasn't absolutely driven into the ground and usually up for a raft of serviceable items and a major service due.

  • JimmyF on 04/08/2017 - 21:47
    +1

    So the question is, has it worked for you?

    As you assume 'no costs' between tradein and selling the car to you. The tradein might not be RWC ready, so may need work, cleaning, etc.

    Take this with a grain of salt people!

    • [Deactivated] on 04/08/2017 - 22:49

      Definitely not perfect, but I put it out there for people like me that are just starting out and have no idea about cars.

      Often car dealers say something like "I'm losing money at this price" when they offer you a price, this helps you to see if it's true to an extent

      • JimmyF on 04/08/2017 - 23:17

        Its a starting point, but just remember there are other hidden costs for the dealer.

        "I'm losing money at this price" Gotta make the customer feel like they got a deal and a half!!!

  • pegaxs on 04/08/2017 - 22:36
    +6

    As a person who was a car salesman and often goes in to bat for others buying cars, this advice is, while not bad in respect to doing your homework on price, well, the rest of it is just useless.

    I came here expecting something more along the lines of finding old stockers, end of month/year, run out models etc. what you're suggesting is finding the imaginary generalised trade in value and trying to buy it off the dealer for that price plus a small margin. While I don't like dealers, after having worked for them, I understand that there is a lot that goes back into reselling a car. Advertising, wages, commissions, preparation, repairs, gst, government charges, condition of vehicle, warranty… so many other factors to consider.

    My tips for people buying a car is;
    Do your homework. Know the car and the market value before you go in.
    Be reasonable with what you want and expect from the deal.
    Find the vehicle you like and wait. Look around for a dealer that has what you want advertised for a while. Old stock = bigger discounts.
    Be firm, and only make an offer when you're ready to settle. Don't go in and say "I'll need some time to check around."
    Walk if the deal is not to your liking and youve been reasonable.

  • [Deactivated] on 04/08/2017 - 22:48
    +1

    I should add, that that's no way to calculate what it's worth or how much you should pay, just that it gives you an idea of the range in which you should make an offer.

    It does help a lot with knowing if you got a bargain as well.

    And, it lets you know how much your car is worth when you walk out of the dealership with it

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