The third and final step in our three part series on negotiating the purchase of a used car is to propose. After you have done your preparation by determining the “standard” price for the car you want to purchase, and after you have asked the questions listed in our previous post on probing, it is now time to enter the proposal phase.
You should point out to the dealer the areas where the car or the dealership is lacking and ask what price reduction the dealer is willing to provide. For instance, if the vehicle history report demonstrates frequent repairs, then what discount from the offered price (or the Kelly Blue Book price) is the dealer willing to give you? Likewise, if the dealer is not willing to provide you with information of services, how much of a reduction in price are they willing to offer? For instance, if the vehicle is not certified, or if the dealer does not provide services like Free Oil or Free Towing like other dealers, how much of a discount are they willing to offer you? As we teach in all negotiations, remember, let the other side make the first offer, do not accept their first offer too quickly, and when you are making an offer “aim high” (or in this instance, “aim low”).
As with any negotiation, the more alternatives that you have, the more effective you will be in the negotiation. If the used car you are looking to purchase is a one of a kind Jaguar and there are no other dealers that sell this type of vehicle, then you may not be in a good position to negotiate. But if you are looking for a BMW that is less than 5 years old and you are willing to choose from different colors and models, then you will be in a stronger negotiation position. Likewise, if you limit yourself to shopping at one dealer, you alternatives will be limited.
We suggest that you look both at Franchised Dealers who sell new and used cars, as well as Independent Dealers who sell used cars only. You will likely find cheaper prices at the Independent Dealers, but they will not provide you with the same amount of information prior to the sale or the service after the sale that a Franchised Dealership would. One tactic would be to play the Franchised Dealership off of the Independent Dealer, asking the Franchised Dealer to provide all the services at the same price as the Independent Dealer, or asking the Independent Dealer to lower their pricing even lower to make up for the lack of information about the car prior to the sale, or their lack of service after the sale.
Ultimately the decision will come down to whether you want the absolute lowest price with very little service from the Independent Dealer, or if you would be willing to pay a little more from a Franchised Dealer based on the fact that you have more knowledge and after the sale service. Either way, you can use the Three Ps and the tips in this article to negotiate your most effective deal when purchasing a used car