Getting the Best Deal: How Much Will Dealers Drop Used Car Prices?
I am a serial entrepreneur and a consumer advocate. When I’m not helping car buyers, I love working on ventures that have a positive impact.
I run a cause marketing agency and serve on the board of Vayu Global Health where we are disrupting the medical industry and preventing the needless deaths of mothers and babies during childbirth.
In the dynamic automotive industry, setting the right price for used cars is crucial for dealerships to balance profit and buyer appeal.
But how much will a dealership come down on the price of a used car?
The discount on a used car depends on its age, condition, mileage, and market demand.
While dealers aim to maximize profits, the competitive used car market and negotiation skills also play a significant role in final pricing.
Table of Contents
- Get A Lower Price on Used Cars Video
- How Much Will a Dealership Come Down on the Price of a Used Car?
- Factors that Influence Used Car Prices
- Negotiation Techniques for Used Car Buyers
- What To Do When The Car Salesman Won't Negotiate
- How To Tell If You Have A Good Deal On A Used Car
- Alternative Options for Purchasing Used Cars
- Profit Margins for Dealerships
- Best Car Deals by Category
Get A Lower Price on Used Cars Video
How Much Will a Dealership Come Down on the Price of a Used Car?
Depending on some factors, a dealership may come down at least five percent off the asking price.
But if you negotiate properly, you can get up to 15% off!
Factors that Influence Used Car Prices
A pre-owned vehicle's age, mileage, state, make, design, and chronology all change its market worth.
These elements can fluctuate swiftly, so buyers and sellers must consider them carefully.
1. The Car’s Age
A vehicle's depreciation rate is highest in the first few years after its purchase. Newer cars generally have higher price tags.
The value of a vehicle diminishes with its age. However, the degree is contingent on the brand and type.
2. Mileage
Moreover, the number of miles a vehicle has been driven significantly affects its resale cost.
A higher mileage leads to decreased value because of more significant deterioration and related maintenance requirements.
3. The State of the Car
The condition of a used car also impacts its resale value.
Vehicles in excellent condition, with minimal cosmetic damage and no major mechanical issues, command a higher price.
Conversely, cars with significant damage, worn interiors, branded titles, or signs of neglect will have a lower resale value.
4. Design & Brand
The brand and style of a car can impact its allure. Specific designs are more desirable than other models.
Additionally, specific brand names are highly regarded for durability. Others may incur more costly maintenance costs or have proven lower dependability.
5. History
Finally, a vehicle's history is critical to its resale value. A car with a clean record, free of accidents, and regular maintenance commands a higher price than one with a history of collisions, repairs, or incidents of neglect.
Negotiation Techniques for Used Car Buyers
With a few fundamental negotiation techniques, buyers can increase their chances of securing a favorable price on their desired pre-owned vehicle.
1. Research
Start by researching the vehicle's market value before negotiations.
Analyze comparable cars in the local market and use online tools to determine the car's fair market value.
With this knowledge, buyers can better understand what price to expect and negotiate more confidently.
2. Be Focused
You must also remain calm and focused during negotiations.
Emotions run high during car buying. However, staying calm and collected can prevent buyers from making hasty decisions or agreeing to unfavorable terms.
3. Don't Be Afraid to Walk Away
Dealerships are often willing to negotiate further when they sense that a buyer is serious about finding a good deal.
Walking away can create a sense of urgency and may lead to better terms in the future.
4. Learn to Bargain
Buyers should be ready to bargain, not solely on the price of the automobile but also regarding other expenses linked to the purchase. In addition to the car price, consider financing, warranties, and service contracts.
Used car sellers frequently make extensive profits on these additional items. Buyers should strive to decrease or get rid of these charges.
Dealerships may be more willing to compromise on other options, such as free servicing or additional accessories, than on the car’s purchase price.
What To Do When The Car Salesman Won't Negotiate
In scenarios where the broker is unwilling to move on the rate of the car, buyers will have to be creative in finding ways to save money.
Here are some tips for dealing with a salesman:
- Focus on financing or trade-in values to reduce overall costs.
- Compare prices with other dealers or sellers to encourage negotiation.
- Understand limitations like the dealership's minimum price or salesperson's authority.
- Speak with higher authorities in the dealership if needed.
- Walking away can be an effective tactic to get a better offer.
- Remember, the vehicle purchase process should be mutually satisfactory.
How To Tell If You Have A Good Deal On A Used Car
To ensure you're getting a good deal on a used car, follow these steps:
- Compare the car's price with its fair market value by researching similar vehicles in your area.
- Consider the car's condition, mileage, and history. A car in good condition with low mileage and a clean record is a good deal, even at a slightly higher price.
- Evaluate additional costs like loans, warranties, and repair plans. If these are lower than what other dealerships or private sellers offer, it's a great overall deal.
- Trust your instincts. If a deal seems too good to be true or overly expensive, do more research or explore other options.
Alternative Options for Purchasing Used Cars
Here are the alternative options for purchasing used cars:
1. Go Through Private Sales
One alternative option is to purchase a used car through a private sale. Rather than going through the dealerships, you can buy directly from the owner.
This option often requires more effort in finding potential sellers and conducting thorough inspections. But it can often yield lower prices because you get the opportunity to negotiate directly with the seller.
2. Auctions
Another method for procuring a used automobile is to partake in auctions with physical and digital venues.
Auctions offer various vehicles at competitive prices, including coveted models and collector's items.
But you must educate yourself on the auction and cars offered to ensure you acquire a good bargain.
3. Online Marketplaces
Online markets, including Craigslist, Facebook Marketplace, and CarGurus, are increasingly popular for acquiring pre-owned vehicles.
These sources provide a broad range of cars available in your area.
Yet, you must be cautious when engaging with unknown parties online. Make sure to inspect the vehicle before locking down the deal.
4. Vehicle Rental Companies
Car rental companies also sell used vehicles.
These are typically dependable because they benefit from rigorous upkeep. That makes them a reliable option for those looking for a used car.
Profit Margins for Dealerships
Understanding dealership profits is key for buyers negotiating pre-owned vehicle prices. Dealerships mark up used cars based on wholesale costs, covering expenses like advertising, staff, and overheads.
They aim for the highest selling price, influenced by market demand, car condition, and competition.
However, profit margins limit how much they can reduce prices. High wholesale values and refurbishment costs can further restrict discounts. Additionally, dealerships avoid setting low-price precedents that might affect future sales and profit margins.
