Question about buying a pre owned car from a dealership

[MidwestTransplant]

Anybody have any experience with buying a used car? Wondering approximately what percent dealers will come off on their cars. I understand that it depends on how popular the car is and how long they had it but does anybody have a rule of thumb?

[bahrbearian]

1. I use kelly blue book and offer less than the blue book

Works well for me its usually about $2000 less than the asking price.

[safeinOhio]

3. I've had good luck with dealers

I'd use the Blue Book. Consumers report puts out a mag ever year that rates older models. It tells you what the major problem were for each model going back 10 or 12 years, very helpful.
Also make your offer the last few days of the month. The Dealers bills are due then.
Last car I bought, I told the sales person what I was looking for and how much I wanted to spend. He called me a few weeks later with a nice small gas saver that a lady had traded in. Low mileage and the Dealers service records. I got a better deal because they didn't have to spruce it up to put on the lot.

[HubertHeaver]

2. Using the various online "blue books" you can arrive at

a general value for the car you are considering. The values will be organized by the subject car's mileage, age and general condition as well as the type of sale--private, trade-value, and dealer price.
Dealers should be desperate enough to be unwilling to let a live customer walk out. The secrete--don't fall in love with any one car or model or even make before you buy, be willing to walk out.

[Richard Steele]

4. Well, the rule of thumb is "the average varies".

Which is to say, they all can come down on the price,
but there's no real rule for how much- it varies depending on the dealership,
the car, how close the particular salesman is to making his monthly quota...

The good news is that it's a BUYERS MARKET right now. Odds are that
that dealrship is DESPERATE for cash-flow, and if you are willing
to do a bit of "acting", they'll give you that vehicle
for little more than they paid for it.

Call the dealership on the phone, ask for the salesman you dealt with...
tell him you thought the vehicle was a good deal (do not sound enthusiastic)
but you spoke to your bank and "YOUR BANK" wouldn't go for it.

Tell him "my bank" was only willing to write you a loan for 75%
of the price they're asking; if the car is 20 grand, tell him "my bank"
was only willing to go 15 "in today's market".

Use the phrases I've put in quotes: "My Bank"; "in today's" market",
be polite and apologize for wasting his time, Be BRIEF & do NOT get sidetracked,
then hang up the phone and WAIT.

The phone will ring within 15 minutes, and the caller will be
that salesman offering you the vehicle at 15-20% less than sticker price
PLUS a very sweet loan package he just worked up
with the Dealership's 'Finance Department'.

[wolfgangmo]

5. This is a trick I learn from my mother

Who was one of the sharpest horse dealers I have ever met. She recently passed away and I really miss her advice and her company.

She followed the advice given her about waiting until the end of the month, not being emotionally connected to any car, and willing to walk away from any deal.

My mother would sit down with the salesman and explain that if they can't seal the deal then they need to have the person who can in the room and then she would explain the she would be making an offer that was a 1 time thing. If they found that they couldn't accept the offer, she completely understood and that she appreciated their time, but that if they couldn't reach an agreement today, then she wouldn't take up more of their time and would not reconsider at a later date. Period. She would go on to explain that her offer would be a bottom line offer that would include all finish work, warrantee, tax etc. so if they couldn't accept the offer as including all the usual dealer costs then they also had no deal.

Once they agreed to that then she would open her purse and start to stack CASH in front of them in $1000 dollar piles fresh from the bank. While she was doing this she would explain that at a certain point she would reach her "bid" and then stop. If they accepted her "bid" they just had to pick it up. If they didn't then she would pick it up, put it back in her purse, thank them, and then leave. She would warn them that there were no 2nd chances with her. She wouldn't change her mind after leaving the room or standing up.

She would keep piling cash, pausing every now and again until she reached her top dollar. I saw her do this with 3 cars. You could literally see the sweat break out on the salesman's forehead as they counted the cash being piled in front of them. Mom told me that the reason this works is that if you come in with a loan or a check that the salesman won't get paid until the dealership is ready to pay them, but with cash they get their commission on the spot. So a salesman with bills will be really motivated. Only once did the salesman not accept the offer and he called the next day to negotiate. My mother told him that she was serious about what she said and that she had bought a car at .

It works like a charm, but you need to have to have the cash to do it.

Good luck and remember that they need the sale more than you need the car. If you are interested in a used car I would suggest that you pay for a 1 month subscription to carfax so you can pull the history of any car you are looking at because getting the truth out of a used car salesman can be harder than fixing the economy.

[tkmorris]

6. Actually, any reputable dealer will provide the Carfax

It's a pretty good way to tell who the rip-off artists are. If they WON'T give you a Carfax, walk away. Don't even bother talking to them anymore. They have unlimited access to them, they have no reason not to provide it unless they wish to hide the vehicle's history.

[DiverDave]

8. Your mom was a true teacher for you

not only talking lessens but showing them too...
She sounds like a real dame... I'm sorry about your loss.

[Locrian]

9. brilliant!

I bet actually counting out the cash also make YOU less likely to become too attached to the car vs parting with your hard earned money. Lot easier to loose sight of the cost when it's just numbers.

[datasuspect]

10. the dealer gets paid whether it's cash or financed

"cash money" is not the big deal people think it is. car salesmen get paid weekly, biweekly, or semimonthly, just like everyone else.

they don't immediately get their commission in their pocket if they get someone to pay in cash.

also, the salesman has no decision making power in the deal structuring. he's a go between.

your mom displayed some nonsensical theatrics, but shit like that doesn't amount to a hill of beans in the real world.

[NNN0LHI]

12. These days if you indicate its a cash deal the price of the car goes up

They know they won't make any money on the financing so they have to bump the price up to compensate for that loss.

I wouldn't mention it was a cash purchase until I had the best price I could get first. In writing.

Cash used to impress car salesmen but not any more.

Don

[Statistical]

14. Correlation isn't Causation

Maybe the dealerships just liked the deal she offered (cash, check, or financing).

Salesman gets paid exactly the same amount either way.
Salesman gets paid exactly the same day each time.

Dealership I worked at you picked up two "draws". One of 1st, and one of the 15th.
If your commissions exceeded your draws you got a 3rd check the following week.

So:
$1500 draw on 1st.
$1500 draw on 15th.
If my commissions for previous month were say $3800.
Then I would get a check for $800 on the 22nd.

If my omissions were less than $3000 the negative amount owed was rolled forward to next month.

Funny thing in car sales is that people who feel they are getting ripped off sometimes are not. I sold a car at $3000 UNDER INVOICE. Dealership lost money on that deal and I got a "mini-deal" = $200 in commissions. The guy swore he was getting ripped off. I sold a lady a vehicle $2000 OVER STICKER, threw in $1000 in accessories, then took 2 points in overcharging interest rate. She loved the vehicle. She believed she got a great deal and even referred 3 friends to me.

[MidwestTransplant]

16. Thanks for the advice everybody! Great advice.

[Greyhound]

7. Huge profits are typical on used cars, usually much higher than new.

It depends on what you're buying though.

Can you give us some details?

[Ikonoklast]

11. Get your own financing.

If your credit is good, and you aren't paying cash, you can usually shop for a better rate than what the dealer will offer. Some dealers have a decent rate on used cars, but in my experience most can be beat using your own financial resources.

Carfax. Don't buy without it. Like other posters said, no Carfax, no deal.

Lowball, lowball, lowball. Right now it is a buyers' market the likes we've never seen. You can't insult someone with an offer right now, it might be the only offer they got on that vehicle in last four months.

Good luck.

[ThomWV]

13. The best deals in automobiles are usually about 3 year-olds

They will come down a lot on the advertised or asking price and right now there really isn't much demand for any model so find what you want and haggle like hell over it.

That suggestion that you get your own financing first is the best advice you'll find here. If you belong to Credit Union get your loan there, if not you might want to think about joining a Credit Union. Once you have a loan guaranteed for an amount you can afford and substantial enough to to buy the car of your current dreams then go looking. Just as a starting point think about 80% of asking price as your initial offer for a vehicle in showroom conditon and less than 10,000 miles per year. Needless to say it must be spotless in and out, never have been involved in an accident or otherwise damaged, and show signs of regular maintanience. I know that sounds like a tall order but its not. I haven't bought a new car in years and looking back I wish I had never bought a new one, its just throwing money out the windown.

[Statistical]

15. Use Blue Book but use it "smart"

Look up the TRADE IN value for the vehicle you are looking at.

That is the MAX the Dealership paid for it. Likely they paid less.
Throw in couple hundred for normal used or $1000 for Certified (Dealerships need to buy warranty from the brand).
Then add in a profit margin of 3%.

That should be your starting point and it will be well below the "retail" blue book price.

ALWAYS ALWAYS ALWAYS work up from Dealers cost. Never work down from "sticker" or "retail".