Dear Tom and Ray: How do you negotiate the price of a used car when buying from a dealer? With a new car, you can get the invoice price and the retail price online. How does it work with a used car?
– Leonard
Tom: Good question, Leonard. It’s harder to know what a used car is worth because, in some ways, every one is different.
Ray: But there are enough of them out there so that a “market” exists. And when a market exists, the market sets the price.
Tom: Here’s how you can tap into the market and find out if your dealer is in the ballpark. Go to our website, cartalk.com. On the right side, you’ll see an orange button that says “Research Cars.” Start there. That’ll take you to a page where you’ll see the Kelley Blue Book form. It’ll ask you for details about the car, including the optional equipment. Then it’ll give you a range of prices, based on whether the car is in “fair,” “good” or “excellent” condition.
Ray: But don’t stop there. Next, you’ll want to look at some actual ads to see what the cars are actually listed for in the marketplace.
You can check right here, in your local paper. Or you can go back to our home page and click on the orange button that says “Search Used.”
Tom: If the used car you’re looking for is popular, you should be able to find several listings for cars of a similar age, similar mileage and with similar equipment. Make sure you note which cars are being sold by private parties (those will be cheaper), and those being sold by dealers (more expensive, but often sold with a warranty).
That’ll give you a better sense of what you should really pay for the car you want.
Ray: And then, armed with that information, two large friends and a Taser, you can go to the dealer and make an offer. Don’t be afraid to offer what you think is a fair market price for the car, even if it’s quite a bit less than the asking price. Dealers often build a lot of profit into used-car prices, precisely because it’s harder for buyers to assess the real value.
Tom: If the dealer doesn’t come down to a price you think is fair, based on your research, walk away and tell him to give you a call if he changes his mind. He might. He might even run after you into the parking lot.
Ray: They always chase my brother out into the lot. Except with him, they’re always yelling “… and don’t ever step foot in here again!”
Tom: One more important note, Leonard: No matter where you buy the car, or how many “points of inspection” it’s had by the seller, we strongly urge you to have it checked out by your own independent mechanic before you buy it.
Listen to the Car Guys in the metro area on 1340 AM and 1490 AM at 10 a.m. Saturdays and noon Sundays. Write in care of The Denver Post, 1560 Broadway, Denver, CO 80202.
