What is the best way to negotiate a used car price?
Before You Negotiate
Know the car's value using pricing guides and local listings. Get a vehicle history report and a mechanic's inspection so you know its flaws. Secure financing from a bank or credit union beforehand; this gives you leverage and prevents the dealer from marking up the interest rate.
Set a target price and a maximum you're willing to pay. If you're trading in, negotiate the new car price first, then the trade-in value separately. Don't mention your trade-in until you've agreed on the car price.
- Know invoice price and fair market value
- Get pre-approved for a loan
- Have the car inspected by a mechanic
- Set your walk-away price
During the Negotiation
Start with a lower but reasonable offer—perhaps 10-15% below asking. Be polite and firm. If the seller won't budge, ask them to throw in extras like new tires, a warranty, or free maintenance. Use the inspection report to point out needed repairs and ask for a price reduction.
Don't be afraid to walk away. There are plenty of cars available. If you're at a dealership, remember that salespeople often have monthly quotas and may be more flexible at the end of the month. Keep the conversation focused on the out-the-door price, not monthly payments.
Common mistakes
- Negotiating based on monthly payment instead of total price, which can hide a high interest rate.
- Revealing your trade-in too early, giving the dealer a chance to lowball it.
- Getting emotional about the car and paying more than it's worth.
