Author Topic: Used car price negotiation  (Read 3040 times)

Fishbot

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Used car price negotiation
« on: September 09, 2015, 09:03:47 AM »
My fantastic 2007 Toyota Yaris was totaled in an accident a few weekends ago and since I love the Yaris I thought I would go looking for another one.

I found another 2007 Yaris on Craigslist for $6500 that has about 66,000 miles. After taking a look at it myself I had it inspected and appraised. The title is clean, it has never been in an accident, they put on new tires in Feb. 2015, and a new battery in the last month. Other than some body damage (cracked front bumper, scratched back bumper, some hail damage, and a dent in the trunk) and a dirty engine, the car is mechanically sound. I donít mind some cosmetic issues but it I did ever want to resell it I would have a harder time. I donít plan on selling it as I had been planning on driving my car for at least another 100,000 miles (about 10-12 years for me) but you never know what life is going to throw your way.
 
Due to the body damage, the inspector appraised it at $5000. All of the used car valuation websites list between $5050 - $5882 for this car in average condition. I was given $6720 from my insurance company for the exact same car but with about 85,000 miles on it. Iíd like to counter offer because I think due to the body damage the car is not worth $6500. Iíve never bought a used car from a stranger before (I usually get hand-me-downs from my family) so I donít know how to figure out what is a fair price or how to go about negotiations.

Any advice would be appreciated, thanks!

jzb11

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Re: Used car price negotiation
« Reply #1 on: September 09, 2015, 09:39:53 AM »
"Private individuals are motivated by their need to get rid of the vehicle, not by maximizing profit on it. Typically, they are not professional negotiators. They expect you to offer less than what they're asking and they expect to meet you somewhere between their asking price and your first offer. When buying from a private party, negotiation is usually easy, and it takes little time to settle on a price acceptable to both the buyer and the seller."

http://www.autotrader.com/car-recall/buying-a-used-car-from-a-private-seller-negotiations-206932

You seem to have estimates already, but you can also check Kelly blue book for an estimate, as well as other listings if you'd like.

With that said it's much like the article says - fairly easy. Just offer what you think is fair and see if he takes it. Maybe shoot a little lower - I.E. if you want to pay 5500, offer 5000. He may come back and say,"well I think 5000 is a little low, what about 5800?" and continue the process until you agree on a price or neither of you will budge.

You could also just flat out ask them what their lowest price is, and they may shoot straight with you. "I listed it at 6500 but I really am looking for 5700".

Anyway you just basically make an offer, and they will either accept or counter offer. Rinse and repeat and you'll either agree on a price you like or walk away.

Kroaler

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Re: Used car price negotiation
« Reply #2 on: September 09, 2015, 09:48:42 AM »
I almost had the first reply.... But I took too long to type....

Okay Ive lost count of how many cars Ive bought and sold on craigslist and heres some bullet points and a summary of your situation at the bottom .

1.) Some people are UNREASONABLE and think their shit is special, dodge these people like the plague.
2.) See Point 1.)   some people will not negotiate to a fair value, don't deal with these people.
3.)  I believe in a FAIR price for BOTH parties, some people lowball but I don't, I strive for a fair value at a fair price.

So with that in mind, you need to find the fair value for this car, Kelley blue book is a great place to start. Punch in all the data for the car, and read the descriptions of the conditions for fair and good and excellent. Match the one that best describes the cars condition accurately including level of body damage. Also find other cars on craigslist with similar body damage if possible. I believe you said you had an inspector give a fair value as well.   To me it sounds like your ready to make an offer.  Go with a hybrid of KBB value and what the inspector said and make them an offer.   If its lower then asking price, explain why your offer is lower and any other price would either be unfair to you, or unfair to them as a seller. 

If the seller is unwilling to negotiate moving to a FAIR price ( not a steal just a fair price) then walk away.  Craigslist deals are more about who the seller is then so much what the car is.  It can be the best toyota in the world, but if the owner is sketchy and seems like a low life, its probably a bad deal. Also the inverse, It can be a crappy oldsmobile but if A little old retired man owned it and took care it could be a real steal.  I don't know how that last bit affects you, but I just wanted to throw out that inspecting the owner is almost as important as inspecting the car.

In conclusion,  Make your fair offer and EXPLAIN why you made this offer and be prepared to walk away if they are unreasonable.  Theres no sense in you having negative equity on your car as soon as you buy it because you over paid. Hope this helped in some way.  Don't be afraid to make a FAIR offer.

« Last Edit: September 09, 2015, 09:53:27 AM by Kroaler »

Bob W

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Re: Used car price negotiation
« Reply #3 on: September 09, 2015, 09:53:46 AM »
You start with saying that you researched the value and then point out the damage politely.   

You then say what is the lowest amount you will take "today?"     Don't budge until they say a number.   When they say a number just say "humph?"  Stand there for an hour without talking.   They will say a lower number.   Exhale deeply.  Wait,  wait, wait.  They will say another number.

Then you say "I appreciate your kindness.  I want to pay cash today,  I will pay you (their number minus x) and extend your hand.  They may come back and you could bump up a little then or just walk away and find a car without all the damage. 

Gone Fishing

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Re: Used car price negotiation
« Reply #4 on: September 09, 2015, 10:00:30 AM »
Is the engine dirty because of road/salt spray or is it oily?  Oil may or may not be a problem, but my 2008 Corolla with 165k on it has zero oil leakage, so it is something to consider.  I'm assuming your inspector would have identified any major issues, but some sort of maintenance records would be good.

I generally try to underbid by the same amount they are over so we can meet in the middle, but based on the asking price, the owner probably thinks it is worth more than it is, and would probably be irritated by an offer of $3,500 or even $4,500. So, for me, this would be a one shot negotiation. I would tell him/her that it only appraised at $5k, why, and that is all I was willing to pay (unless I wanted to pay a little more than it is worth for some reason like the next best one was 200 miles away and I am currently renting on my own dime).  They would probably decline, and I would leave my contact info if they change their mind.  The ability to walk away is what wins negotiations, and most cars are not rare. 
« Last Edit: September 09, 2015, 10:02:02 AM by So Close »

Gone Fishing

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Re: Used car price negotiation
« Reply #5 on: September 09, 2015, 10:09:19 AM »
I'll also add that people who are not the types to get minor body damage fixed, underestimate the cost of such, and subsequently underestimate the appropriate reduction in value.

Personally, I love buying a vehicle with a bit of body damage, because I plan on driving it in ground and resale is not an issue, but I have to get an appropriate discount over a car in good condition. 

If you bought this car, took it to trade it in (perhaps what the seller tried to do), a dealer would not give you average condition prices.  You may just ask if they have tried and if so what the dealer offered. If so, it was probably in the 4-5k range.   

DoubleDown

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Re: Used car price negotiation
« Reply #6 on: September 09, 2015, 10:11:41 AM »
This wasn't exactly your question, but I wanted to point out that when I was shopping for a used car recently, I was amazed to discover that you can get luxury cars for the same or lower price as small and older Toyotas, Hondas, etc. I had been driving a Honda Accord, which was great, but I needed a new (to me) car. I found that I could buy a BMW, Mercedes, Lexus, Jaguar, Infiniti, etc. for LESS than a Honda Civic with similar miles, age, and condition. Except the luxury cars came with leather seats, much higher-performing engines, premium sound systems, etc.

Yes, there is the *potential* downside of higher maintenance costs, but if you go for service somewhere other than the dealer you can find it costs no more than service for a Toyota/Honda/etc., and many of those luxury brands are just as reliable (esp. considering many of them come from the same maker, like Honda/Accura, Toyota/Lexus, Mazda/Infiniti, etc.). Plus, I don't carry collision insurance, so my coverage costs LESS than it did on my Honda. And I live in a state with personal property tax, and the tax on my luxury car is also way less than the tax on my Honda which was a little newer.

I must admit, even though I'd like to believe I don't care about appearances, I really enjoy driving around my new-to-me luxury 2007 car with the powerful engine, lots of really excellent features, looks and drives great, and it only cost $8000.

Anyway, check it out even if it's just for fun, even if you decide to stick with the Toyota Yaris. You might be surprised at what you could buy in the same price range and get a far higher quality car!

neo von retorch

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Re: Used car price negotiation
« Reply #7 on: September 09, 2015, 10:40:03 AM »
Infiniti is the luxury brand for Nissan, not Mazda ;)

Mazda doesn't have a corresponding luxury brand. But maybe that's why the 6 is so nice. And the 3. And the CX-5...

Spork

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Re: Used car price negotiation
« Reply #8 on: September 09, 2015, 10:56:05 AM »
Kroaler said it best.  I'm just parroting  him to reinforce what was said.

It sounds like you did the right things.  You researched the price you should pay.  They want more.  Smile, shake their hand, give them your name/phone number and say "call me if you change your mind."

I can't tell you how many deals I've walked from where they called back later after their rational side kicked in and told their emotional side "This shit ain't selling."  Sometimes when they call back it's too late.  Don't waste your time chasing that perfect deal.  Don't decide "this is the one" before the deal is done.  Offer something reasonable and politely walk away if it is refused.