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How to best negotiate on a used car price – Tips

Used car dealership - how to negotiate the price of a used car
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Buying your dream used car can be a fun and great experience. Eventually getting to the point of driving out with your dream used car can be a challenge. Some may get nervous on discussing pricing of a car. This article is to help you negotiate a used car price.

We’ll cover why negotiating is important and some of the strategies you can use to walk away with not only with the car you love, but with the best deal as well!

Why negotiating is important

Remember this: Almost everything in life is a negotiation!

Here’s a scenario: If you ask a friend, “hey, want to go grab pizza for lunch?” Your friend may reply: “sure, but can we grab burgers instead?”

Guess what? You just negotiated what you will be eating for lunch!

In the above scenario, you likely didn’t think you were negotiating or expected it. In the world of car dealers, however, most car dealers expect and are trained to know how to negotiate on the price of a car. Since most car dealers likely know they will be negotiating when selling a car, potential buyers should be prepared to negotiate.

“Don’t bargain yourself down before you get to the table.”– Carol Frohlinger

The reason negotiation is important is because in the end you get to save money or get something else part of the deal. There is no need to pay the price that’s listed on the car, if the car dealer/seller is willing to reduce it by sum certain amount.

In some cases, it’s possible that the car was priced at a certain amount, in anticipation of someone negotiating the price to where the dealer really wanted to sell. If you don’t negotiate, then dealer walks away with more.

If you negotiate $1,000 off of the list price of a car, that means: (1) your monthly car payment is reduced by at $15 per month; and (2) you pay no interest on that $1,000. $15 over the course of 6 years totals $1,080.

What if the car dealership doesn’t negotiate?

There are some used car dealers that expressly say that they don’t negotiate.

For instance, Carvana says the following:

Carvana price negotiation policy

CarMax similarly has a no-haggle policy.

If a car dealer doesn’t negotiate, then obviously there’s not much you can do. Aside from these known retailers who have a policy not to negotiate, most other car dealers negotiate on the price of a used car.

Tips before you negotiate on a used car price

“The best advice I ever got was that knowledge is power and to keep reading.”– David Bailey

Before you negotiate, you need to know: (1) how and (2) what you are negotiating towards.

In other words, do your research!

Tip # 1: There are many things you should research before you first go car shopping:

  1. Become knowledgeable about the car you want. What is the current demand for your car. Keep track of the cars you are interested in using websites such as, autotrader, or cargurus. Do they sell out fast or have been on the dealer’s lot for a while.
  2. What is the current market value of the car you are considering in comparison to the selling price. Determine the market value of the car you are interested in using websites such as or NADA.
  3. How much are similar cars being offered for at other car dealers. Use online car search websites such as, autotrader, or cargurus. Set a search mile radius of 100+ miles You might learn you need to take a drive to save $5K on your dream car! Alternatively, you might learn that the the car is overpriced at a particular dealership.

Tip # 2: Set a budget for yourself on how much you to spend on a car. Note, how this does not say how much you want your monthly payment to be! Set an overall car purchase budget, so you know what number you would like to negotiate towards.

Tip # 3: You should research and know how much car insurance would cost for the car you are interested in. Calculate this as part of your monthly budget, so you will know what your monthly payments will be, given the purchase price of your car.

Tip # 4: Know the interest rate your neighborhood banks are offering, including local credit unions. Often times, you will get a much better interest rate directly from your bank versus the car dealership

Strategies to use when negotiating on a used car price

The art of negotiation

There is no specific science to negotiation. Negotiation is an art, and will be different for each person.

When negotiating, your goal should be to get a better deal in comparison to the starting point – to work towards the number you have in mind. The ability to properly negotiate can be considered a social skill because it’s a skill you use to help yourself get a better deal. Negotiation should not be confrontational or as a way for you to “get your way.”

Here are two points to remember:

  • a car dealership is a business. Their business is to sell cars and make a profit from selling those cars. Car dealerships are not there as a charity to give away money at a loss or at cost. On the other end of the table, you are a consumer with a set budget and have researched what you’re buying.
  • When negotiating always be reasonable, in order to be taken seriously. You cannot expect for a car dealer to drop the price of a used car by $5-7k. Often times they do not have that much margin to be able to drop the price that much, and will see you as not being serious.

Do not giveaway your position

Just because negotiation can be a social skill, that doesn’t mean you show the car dealership your hand.

When negotiating with the car dealership, do not share with them your budget or the ideal monthly payment you would like to have. Your goal would be to make an offer and/or counteroffers to get to where you want to be.

If you share your ideal monthly budget, the car dealer will likely work on getting you there through a variety of creative ways. The dealership may offer you a longer loan to help meet your monthly budget requirement. Meanwhile, you are paying more and more interest on the unpaid balance of your car loan.


Always remember that there will be other used cars available. If the car you want is one-of-a-kind, then in all likelihood there will be little to no negotiation. In all other instances, know that cars are being bought and sold all the time. If after your first visit you cannot get the price you want, then simply walk away. There is no need to negotiate further.

Here’s what can happen after you walk away:

  1. The dealer can call you back and offer you a price that is either at or close to what you asked for. “To make it happen,” however, you will have to visit the dealer.
  2. Someone else will buy the car (or the car
  3. The car remains unsold, and the dealership will drop the price. You see when the dealership drops the price, they don’t drop it by a couple hundred. Car dealerships often drop a car price by $500-$1300 at a time. This will all depend on the car and how much in demand it is. Remember do your research to understand the market about your car.

Depending on how often you have purchased a used car, you’ll notice a trend. Once you walk away from one specific car negotiation, there will likely be another car available for sale within the next few days or weeks that you can restart your negotiation on.

“Play dumb” strategy

Sometimes the dealer may tell you that you are getting the best deal ever. Or, that you are getting the car at “cost.” In all likelihood you will never know what such a statement is true or not, and your job isn’t to know that! Just remember that a car dealership is a business looking to profit from each car sale.

Even if you know something to be true (which is likely ver hard), you don’t need to agree – you can continue to negotiate! If a car dealer doesn’t want to sell the car at a loss or at cost, they can certainly choose not to.

Negotiating the price of a used car isn’t the only element

If you realize that the car dealer is not budging more on price, see if you can negotiate other “stuff” as part of the deal. Here are some other things you can consider to negotiate as part of the transaction:

  • 1 or 2 free oil changes
  • 1 free maintenance visit
  • Wheel locks
  • All weather car floor mats (check out article about all weather floor mats here)
  • Road hazard tire protection

The 411

Unless the car dealership has a “no” negotiation practice (which exists), then alway negotiate the purchase of the car. The car dealership is often expecting (and prepared) for you to negotiate.

Remember, if you don’t ask, then you won’t know or get.

Happy buying! 😊