Drive Virtually Free: Smart Used Car Buying Advice

It sounds obvious, but most people just don’t spend the time to do it.  Going into a negotiation without information about the car you’re looking at or the person who is selling it is foolish.  Now, collecting information for information’s sake is not the goal.  You need to answer very specific questions before you go into the negotiation so that you know where you stand and will be able to better predict how the other side will respond.  You can do much of this beforehand through online research, and the rest over the phone with the seller.

Questions to answer on your own:

• What is the estimated market value of the car? Use tools such as Edmunds True Market Value and Kelley Blue Book to estimate the value of the car.
• What is the average posted price of similar cars in the area? Search Autotrader, Craigslist and Cars.com to figure out what similar cars are listed at.  Print these out and bring them with you to the negotiation to show that you did your homework.
• What did similar cars sell for recently? When you are calling sellers during your car search, you will probably find that some of the cars have already been sold.  Ask them directly what they ended up selling the car for and keep a record of this.  eBay Motors will also list the price of completed items if you log in.
• What are the must-have options? You can tell what the favorite options are by looking at the most common options are with other cars for sale and also by reading articles in car magazines about that particular model or manufacturer.  If the car is missing something considered valuable to most people but you don’t care about, use this to your advantage since it does in fact reduce the car’s resale value.
• What are the recalls or problems common to the cars you are looking for? Call the service department of local dealerships to find out or ask friends who have the same car.  Knowing that a recall should have been completed but wasn’t, or that the suspension bushings are prone to early failure will help you gain leverage in negotiation.
• Is there anything in the vehicle history that would make this car undesirable? Use a service like CARFAX or AutoCheck to find out if the car has a junk, rebuilt or salvage title, has been in any major accidents, or has anything else in its history that would hurt its resale value.  This is just part of due diligence when buying used, and you might find something about the car that makes you decide not to buy at all in the process.

Questions for the seller:

• How long has the car been up for sale? You might know this ahead of time if you have been watching the classified ads for a while.  You can use the knowledge that a car has been on the market for a long time to your advantage, because it indicates that there is something that makes the car seem undesirable or overvalued, and the seller will usually be more flexible on the price.
• Why are you selling the car? Knowing what motivates the seller will help you during negotiation to improve the deal with the seller in exchange for him making concessions for  you.  If he needs  a quick sale because he is moving, for example, he may be flexible on the price if you can buy the car within 24 hours.

There are, of course, many other questions to ask yourself and the seller, but these are a good start and show the importance of going into a negotiation armed with knowledge.

If you are the seller, the same rules apply.  You should know everything that the buyer knows and then some, so that you are not caught off guard.