Negotiating tricks for you to use when buying a 2nd hand car.

How to negotiate when buying a car

Arm yourself with knowledge before you set out to buy your dream car at the best possible price!

Take the emotion out of it

It is very easy to say you shouldn’t get emotional when buying a car, but in practice, it’s often more difficult.  Nevertheless, it is important. Salespeople have a sixth sense when gauging your desire for a particular vehicle. After all, it’s what they do: deal with customers or potential customers all day. Those who have been in the game for decades can spot a “tyre-kicker” from blocks away! And when you are super-keen on a certain car, you may as well wear a sign that says: “Take me, I’m yours!” If you want to sell your car, remember that AutoTrader can get you an Instant Offer.

Before you even get to your negotiating stage

Be aware that your choice can very often be an emotional decision. One particular car floats your boat for status, nostalgia, or because you simply have to have the fastest (longest, coolest, flashiest) car in the neighbourhood. But no matter how hot you are to buy, step back and check the alternatives to the car you have set your sights on.

Check the alternatives

Sounds logical, but under the influence of emotions, many buyers forget to do this. I recall a real-life case when a buyer went to a dealer, where he bought a dealer-modified hatchback for a fair amount of money. A week later, he was complaining about all the fuel the car was gargling away(while trying to convince himself that those gargling side-draught carbs were making a sound made in heaven).  Only then did he start perusing recent road tests and realised that he could have bought an even quicker factory-developed hatchback with fuel injection and about 40 per cent better fuel economy!

 Set a price ceiling for yourself. You want to steer yourself towards a car you need, not want.

Set a price ceiling, and then see what other brands, and what other types of cars you can buy for your money. For example, you may have your heart set on a certain coupe because it looks great and you can see yourself having many happy miles in that car. But a sedan or an estate version of the same car may be available. Or a sedan, estate or SUV of another make. These other variants or configurations may, in reality, suit your lifestyle better and yet offer much the same feel, performance and luxury.

Check out competitive brands, too

Check out competitive brands within your budget to be as informed as possible. You can do this online to save costs and time. Then after you have made a short list, take one or two of these competitor cars for a test drive. Remember, once you have signed a finance agreement for your car, chances are you are going to be living with it for a couple of years

Once you are sure

Once you are set on a particular make and model of car, narrow down your research to see what is on offer for the identical model from other dealers and private sales too. And take these cars for test drives, too.

 Check out the differing model specifications and options

Your online searches should focus on all the different models and options that are available on that car in that particular year model you want to specify for yourself. Get an idea, a ballpark figure, of what each of these options is worth or were worth. In the used car field, it is common knowledge that many options don’t necessarily add value to a used car. At least as far as a trade-in price is concerned. BMW Exclusive packs used to cost anything from R18k to R25k in later models. On trade in that is worth nothing extra. Same with BMW/Merc sports type packs. Trading in you are quickly told the car has to have wheels and seats. Also you will be informed that almost all of these brands are traded in with one of these lists of options on it. Entertainment system upgrades also don’t count for much.

Options are a negotiating tool for you

A car lacking must-have options, such as air-conditioning and audio, even a sunroof inexpensive models, are often very difficult for a dealer to sell. A dealer will try to sell you the idea that options can add lots of money to the selling price, but be aware that he or she probably hasn’t paid too much extra to the previous owner for those extras. A dealer will typically quote the trade price without considering options, even though on an expensive car, these can run to thousands or even hundreds of thousands of rand above the list price. 

The tack you must take is that options are a nice add-on but not essential to the car you want, and thus, they aren’t a huge influence on a used retail price to you. Believe me; even though everyone says it is a 2nd hand market right now, there is plenty of stock of everything standing around nationally. Also never be rushed by a sales person. You are paying your money and he/she is desperate to earn a commission. The 2nd hand market is charging huge premiums on cars these days. Do yourself a favour and get quotes from We Buy Cars etc on the make and model you want to buy, and you will have an indication of the margin that the dealer has in the car, and thus how much negotiation space you have. Banks are assisting these dealers in boosting the cars’ prices upwards, as they are willing to finance it. Remember when you trade the car in one day, the gap between what you paid and what a trade in was for your car is going to come and bite you. A dealer can walk away from an offer you are making, so do not let them squeeze you upwards, if your offer is reasonable. If the offer is reasonable, the dealer will come back with other things on the side to try and get you to your price, everything factored in.

Knowledge is king

You are now armed with the powerful knowledge of a fair price for what that so-badly-wanted car is selling for elsewhere and a good basic knowledge of the different models available and what the options were worth (approximately). Also, check out the spare parts and tyre prices for your chosen vehicle. You don’t want big surprises further down the road!

Mileage is very important

Mileage, as well as age, plays a big role in a used car’s value. Be aware of how much residual is in the warranty and the service plan when buying a late-model used car. A high-mileage car will have considerably less value than a low-mileage one.

You can always walk away

Always keep in mind that you can walk away from the deal.  Repeat to yourself, over and over, that unless it is the last surviving Bugatti Royale ever built (there were only seven built, and that was back in 1933), you can find a very similar model for sale elsewhere.  Set a ceiling price you will pay, and make your opening bid appreciably lower. You can always negotiate upwards but not down.

Keep your sense of humour

The salesperson’s job is to make a sale and make as much profit as possible from the deal. You aim to get the car you want at the most affordable price. If you keep the emotion out of it, the two of you should be able to reach a middle ground that makes the deal fair to both of you. You don’t have to like each other, but you should be able to respect each other and your differing points of view.

 Timing can be important

One of the goals for the salesperson is to make a sale. Depending on the time of the month, the proximity of holiday periods, and sometimes the state of the broader economy, at differing times, there will be more pressure to make a sale than to make a very good profit. Remember, most dealerships have a fundamental target as to the number of cars they have to swing per month, to cover the fixed overheads in the dealership. One sales person summed it up beautifully to me one day. She said; “We are here to move metal, that’s it.”

A good time to approach a dealership to buy a car is often during the last week of the month when sales targets need to be met. It is often best to go during a quiet time, say on a Wednesday afternoon or a Thursday early morning, when business is generally slow. Remember, stock sitting on a showroom floor costs dealers money. If you ask outright how long the car has been on the floor, you will generally not get an honest answer. You can have a look for signs of dust on the vehicle, tops of tyres; Air vents inside; Top of back seats; top of the tray shelf sides in a hatch back; Tops of suspension springs at the tyres, to name but a few non-obvious places where staff normally does not clean/dust cars off. 

Organise finance in advance, if possible

And as all good dealers are aware, Cash Is King.

So, if you are planning to finance your new car, it can be advantageous to have pre-organised finance in principle so you can close your side of the deal with the sure knowledge that you can come up with the cash.

Let the dealer know that, while you aren’t about to waste your money, you will have no problem laying the right amount on the table at the appropriate time. Providing your negotiations reach an amicable conclusion, of course. If you do your own financing, you also will be able to reduce the F&I costs greatly with your purchase.