Drive Virtually Free: Smart Used Car Buying Advice

When you’re trying to find the right car on the used market, searching only in a radius of a hundred miles or so might mean that you will be looking for a while before you find the car you really want. By searching across the country, you will improve your chances of finding the right car and getting a good value.

For instance, if you live in an area where everyone drives trucks but you are looking for a sports car, your selection is going to be pretty small. The same goes if you are in an area which is not densely populated.  If you are in an area which is densely populated, you can get a deal by looking at cars which are in remote areas where there is low demand.

Many of my friends and co-workers thought I was a little crazy when I said I was going to fly from Los Angeles to Ft. Worth, TX to buy a car, but it ended up being a great purchase. Since then, several friends have done the same with impressive results.

Here’s how I did it:

• I searched AutoTrader and Craigslist daily. To get a great value, you need to be the first or one of the first to call about a car.  You can set up an automated search on AutoTrader which will e-mail you new results daily, so you don’t have to spend much time at all on the search.
• I ran a CARFAX on the car. I saw that the price of the car was a few thousand dollars cheaper than comparable cars in the area, and had only 35,000 miles.  Once I saw this, I wanted to make sure it didn’t have a salvage, junk or rebuilt title.  Everything checked out, so I called the seller.
• I asked the seller a ton of questions over the phone. The seller was very open and forthcoming about the car over the phone.  I had prepared a list of dozens of questions at the outset of my car search, and had this document open on my computer when I called so that I could record his responses and take notes.  I got the feeling that he was very picky about his car, just as I am.  It seemed to be in almost perfect condition based on his responses.
• I found the best local BMW shop and arranged a pre-purchase inspection. The seller seemed like a great guy, but I couldn’t just take his word for it.  So, I went on a car forum which I frequent to ask the members in the D/FW area what the best shop was to get a pre-purchase inspection (PPI) done.  I called the shop to see if they offered a PPI service and to find out the price.  They quoted around $180.
• I went over the inspection report with the shop. I called the seller and set up a time that he could take the car in for an inspection.  I made the appointment with the BMW shop and made sure that they would fax me the report first and give me a call to walk through any problems.  It’s important to note that I found the shop myself and made sure that they understood that they were working for me, not the seller.  Otherwise, a dishonest seller could get a friend of his at a local shop to give the car a falsified clean bill of health.
• I offered to make a non-refundable deposit with the seller. I knew that the car was in high demand and the seller confirmed this when he told me later that I was the first of many out-of-state callers.  I offered to send him a few hundred dollars as a nonrefundable deposit just so that he would hold the car for me.  He kindly refused, and said that he would hold the car for me.  That made me a bit uneasy, but it worked out in the end.  Without a deposit, he had no reason to hold the car for me other than the fact that he was a nice guy and I was the first to call him.
• I scheduled my flight.  With limited time remaining, I scheduled a flight to Dallas using frequent flyer miles for myself and a friend.  Not everyone has the luxury of having frequent flyer miles, but if you don’t, this strategy is still workable if it’s the right car at the right price.  I set up my hotel stays with points as well, but I was staying in relatively cheap hotels as well.
• I headed out early. To make sure we were rested, my friend and I left work a little bit early on Friday and caught our flight to Dallas.  Flying in on the same day would have just been more hectic since there was a long drive home.
• I checked out the car.  The next morning, the seller picked us up at our hotel and I got a chance to thoroughly check the car out myself.  There were no surprises and the car was exactly as had been described in the PPI report, so we headed to his bank.
• I handed over my cashier’s check. I had drawn a cashier’s check prior to leaving home.  We went to the bank, where the title was being held (I made sure that he double and triple checked that they would have it ready to be transferred before I left).  We filled out a bill of sale, triple checking the information on it.
• I made copies of everything. I made copies of his driver’s license, the bill of sale, and any documents from the bank.  I wanted to be 100% sure that in the off chance that I was getting scammed after going through all these steps, I would have some sort of legal recourse.

After that, I was the proud new owner of a BMW M3!  My friend and I stopped at a local grocery store for some supplies and then began our mini road trip, returning on Sunday morning.

I took a similar trip from Seattle to Los Angeles along PCH when a friend bought a Porsche Cayman S using the same strategy.  Both cars have turned out to be excellent purchases.

It’s not for everyone, but there are cases where purchasing cars from across the country can pay off.  There are risks of course – the car could end up not being what the seller or mechanic described and you would end up having to come home empty-handed, and the seller could end up being a scam artist.  You also lose much of your negotiating leverage once you have left home.

To minimize these risks, learn as much about the car ahead of time as you can, before making a commitment.  Use vehicle history reports, pre-purchase inspections and phone calls with the seller to minimize the risk as much as possible.  In some cases, you might be able to have a friend or family member in the area check out the car as well.

If you don’t have frequent flyer miles and hotel points, here is a projection of what the costs might be:

• One-way airfare: $200
• Two night hotel stay : $200
• Airport parking (two days): $40
• Fuel cost (61 gallons at $3.00/gal): $183

Total cost: $623

I’m not a travel expert, so I’m sure there are ways to reduce those costs further, but you get the picture.  If the car is rare and/or undervalued or you are in a rush, this approach can work well for you.  Plus, you get a driving adventure out of it!

Like most people, I hate when someone wastes my time. If you’ve ever sold anything through classifieds, you know the frustration of dealing with buyers who aren’t serious.

There are definitely more ways to identify people who are just looking rather than who want to buy, but in general, my experience has been that you shouldn’t waste your time with anyone who falls into the following categories:

• Someone who hasn’t already seen an example of the same car already (or one that is similar). Usually, people do not buy the first car that they look at, and these folks are still in the beginning phases of shopping.  They won’t have any reference point against which to evaluate your car and in my experience, are never ready to buy.  You may get the primacy part of the primacy-recency effect, but it seems that usually the convenience of buying the car you’re already looking at leads people to buy cars near the end of the shopping cycle.
• Someone who is undecided between different makes and/or models of cars. These folks are in a similar category as the ones who haven’t seen a similar car to yours already.  If someone is still deciding on what kind of car they want, don’t bother showing them your car, because more than likely they will come over, drive it and then tell you that they need to go look at another model before making any decisions.
• Someone who wants to buy sight-unseen. Not only do you have to be especially wary of scams with these individuals, but usually if someone claims they are ready to buy from out of state without seeing the car, they’re just poking around and trying to see what kind of deal they can get.  I have bought cars from out of state, but the difference is that I’ve always wanted to test drive them first.
• Someone who wants to negotiate over the phone, never having seen the car. These people seem to just be asking the same question to 100 different buyers, trying to use the shotgun approach to finding the lowest price.  They usually ask something like, “What’s the lowest price you’ll take?”  Without having seen the car or even having asked any other questions, they don’t know anything about its quality relative to other cars, so if you are priced competitively you can be pretty sure that these folks are just going to waste your time.
• Someone who is generally not knowledgeable about the car. My favorite question was from a friend who was selling his BMW M3, which is on par with a Porsche 911 in straight line acceleration – he said someone asked him, “Is it fast?”  If someone generally doesn’t know their stuff about your car, they are probably still in the beginning phases of shopping and will be using your time to learn about the car rather than actually evaluate whether it is the right car for them to take home that same day.

If you feel like you want to spend time with every prospective buyer, feel free to do so.  As with anything, there are exceptions to these guidelines and they aren’t hard and fast, so you may find buyers that I would have pegged as tire kickers early on.  My point is that you should try to focus on people who know what they want, have done their homework and are ready to buy because they are much more likely to take the car home and are less likely to waste your time.

If you have more suggestions, do feel free to share your experiences in the comments section.

It may go against your instincts since appearing powerful seems like the more effective way to negotiate, but having the final say in a decision actually weakens your bargaining position.

Car salesmen know this – if you’ve ever been haggling at a car dealership, you’ve seen them do it in every single negotiation.

Here’s the scene: After 30 minutes to an hour of haggling, the sheet of paper with four squares on it is covered in random numbers and “calculations.”

Salesman: Mr. Johnson, if I sell this car for a dollar under $25,224.43, I’ll get fired!

Customer: I truly can’t afford more than $24,000 for this car.  That’s the best offer I can make.

Salesman: Well, I’ll see if I can convince my manager to go for it.  He’s not going to like it, but I’ll see what I can do.

[Salesman leaves, to go "plead with his manager" (often, the salesman just sits in the office and the manager doesn't talk to him at all, just continues working and ignores him)]

10 minutes later…

[Salesman comes running back, panting from exhaustion]

Salesman: Well, I talked to my manager.  He says that $24,000 is $1,000 under invoice, so we can’t possibly go that low…

…And the negotiation continues like this for another 2-5 hours.

The point is that the dealership has intentionally created a situation in which the salesman is not the final decision-maker.  He has to get everything approved by his manager.  By doing this, he is able to pretend that he’s really on your side (good guy/bad guy), trying to help you out and convince his “crazy manager” to “give a break to a good person like yourself, just this once.”  Of course he’s not on your side – he’s working for the dealership, trying to earn a commission!  Using this tactic is a way to leverage the negotiation more in his favor, putting pressure on you without being confrontational.

How can you use this in car buying or selling?  After all, you don’t have a sales manager who needs to approve your decisions, it’s just you.  I’m sure some of you will cry out that this is unethical, but in order to use this very common negotiation tactic yourself, you will have to make it appear that you are not the final decision-maker, even if you are.

If you’re buying a car, you can use your significant other as the higher authority: “I think I can give you $14,500 for it, but I need to check with my wife first.  She would kill me if I didn’t check with her first.”

If you’re selling a car, you can potentially do the same thing – say that you are helping your friend sell a car, or that you need to just check with your significant other before letting the car go for that price.

Also, you should be aware of other people using this negotiation tactic against you and try to neutralize it as soon as possible by establishing that they are the final decision-maker early on.  Car salespeople will do this by asking you something like, “If I can find you the car that you’re looking for, is there any reason why you can’t buy today?”

I’ll leave you with a scene from the movie Boiler Room, which is about extremely aggressive stock brokers selling shares of fictional companies.  The main character, played by Giovanni Ribisi, is trying to remove a potential client’s higher authority to buy stock:

“I need to talk to my wife first, and then I’ll call you right back.”

“No, you don’t need to do that Harry…”

“I need to talk to her first.”

“Tell me, Harry, you’re at work right now, aren’t you?  What do you do for a living?”

“I’m a purchasing manager at a gourmet foods company.”

“So does part of your job involve making decisions?”

“Of course.”

“So, when you’re making a lot of these decisions, do you call your wife and ask her what you should do?”

“Of course not, but that’s a little bit different…”

I’m not advocating being a slimy salesperson, but you should always be aware of when the other party is using a higher authority to negotiate with you and try to remove that excuse before they get a chance to use it.

When you are shopping for a car or trying to decide whether to keep your car or move to a newer one, there is one simple concept that you must understand: total cost of ownership.

Total cost of ownership takes into account depreciation, operating costs, repairs, maintenance and insurance costs.  To make comparisons, you would calculate a cost per mile driven or cost per year of ownership.

Depreciation

I’ve already mentioned depreciation, and will continue to mention it because it is just so important to keep in mind.  This cost will be the single biggest contributor to the total cost of ownership if you are driving a relatively new model (within 5 years old or so). If you made the mistake of buying brand new, it will be an even larger contributor.

Operating Costs

Operating costs are things like fuel, tires, brakes, and oil changes.  These are wear items that are consumed on a day to day basis and make up a large chunk of your costs as well.  Fuel will be the biggest cost here.  If you drive a car that has different tire sizes on the rear compared to the front, you should break those costs out separately since they will wear at different rates.

Repairs

It’s hard to know how much repairs will cost you since they are by nature unpredictable, but you can get an idea based on how expensive the car itself is, its reliability rating, and by reading surveys from Consumer Reports.

Maintenance

Maintenance costs are predictable, since typically you know how much you drive in a given period, and that your car will require an oil change every 3,000 miles (or much longer if you are using a synthetic oil), your car gets a certain number of miles per gallon, etc.

Regular service inspections also fall under this category – these might be every 30,000 miles or so and cost in the neighborhood of $1,000 each, depending on what kind of car you are driving.

Insurance

Before moving to a different car, you definitely will want to know what the insurance will cost you.  You can find this out most often by requesting a free quote online from major insurance providers.

A recent study by Consumer Reports uses slightly different categories than I have just described, but the basic conclusion is the same: depreciation and fuel are the biggest costs during ownership, making up 46% and 26% of the total cost of ownership, respectively.

Source: Consumer Reports, 2008

Focusing on reducing depreciation, therefore, will lead to a huge savings over the course of your owning a car (Ramit Sethi would call this focusing on the Big Wins).  This is why, when gas prices were up around $5 last year (as they will undoubtedly be again in the future), selling your car to buy a brand new Prius just didn’t make sense since the depreciation hit outweighed the fuel cost savings.  We tend to focus on the costs that we see every day, such as gas prices and repair bills, but there often isn’t a lot we can do about them besides maybe driving less (and where’s the fun in that?).  Depreciation is the bigger worry here.

The moral of the story?  Buy used to save yourself from getting hit hard by depreciation, read this blog to learn more about how to buy the right car and keep its value as high as possible and stop worrying about fuel saving tips that will only make a 5% difference in your fuel costs (about 1% of the total cost of your car).

Here’s a spreadsheet I created to help you estimate your ownership costs and figure out what’s really costing you money. Yellow cells are for you to input, gray cells will be automatically populated.

Note: Insurance costs will expand or shrink based on how many miles you drive, so always update that with new information. The same with depreciation, but to a lesser extent since that is a function of both time and mileage. This worksheet is designed to illustrate the relative cost of different aspects of owning your vehicle, so if you’re an accountant and I have offended you by making approximations, count to 10 and stop hyperventilating.

Edmunds has a nifty tool called True Cost to Own that you should use when car shopping.

While car shopping, you may have seen a car that is priced considerably lower than other similar cars in the area.  You think to yourself, “it must be too good to be true… or is it?”  Then, once you read further about the description, you see the word “salvage” in the description.  Since the seller may have conveniently omitted the fact that the car has a salvage title, you should always ask them directly if the car has a clean title over the phone and also run a vehicle history report from a company like CARFAX or Experian AutoCheck before going any further.

Your gut tells you that the deal is, in fact, too good to be true.  The side of you that’s trying to get a deal, however, is thinking that maybe, just maybe, you’ve stumbled across a bargain that others have missed.  Listen to your gut on this one.

A salvage title means that a car has sustained enough damage that it has been declared a total loss by the insurance company.  This may have been the result of an accident,  a flood or in some cases, theft.  To be declared “rebuilt,” or “rebuilt salvage,” a car must be repaired to a condition that is deemed roadworthy.  A “junk” title means that the car is not roadworthy.

Some cars can sustain massive amounts of damage without being declared “salvage” because they were bought back before the insurance company took possession of them (typically to send the car to a salvage yard).  The owner is then responsible for repairing the car to meet safety standards.

If you think all of this sounds scary, it should.  A car with massive damage to the rear can be cut in half with a new rear end welded onto it.  Stories like that have convinced me that you should never bother with a car that has a rebuilt title, because they will never be the same again.  There may be some instances where cars are of little value (less than $5,000) to begin with and have sustained minor accidents which causes them to be declared totaled, but at that price point I think it is worth it to spend an extra $1,000 for the peace of mind alone.

If uncertainty about the car’s background and fear of repairs isn’t enough, consider that some insurance companies may not insure the car and you will have a much harder time reselling the car later on.

There are just too many cars out there to waste time and money on with one that has anything less than a clean title.  Leave that gamble for someone else who is feeling lucky.

To minimize the risk of getting a car like this, you should always take three steps before buying a car on the used market:

1. Ask the seller directly, “Does this car have a clean title?”
2. Spend the $15-30 for a vehicle history report
3. Spend $200-500 or so for a pre-purchase inspection from a professional mechanic of your choosing, not the seller’s

Generally, I recommend staying away from car dealerships as much as possible.  After working in the #1 dealership on earth for a particular German luxury car, I know enough that it’s not worth the hassle and almost always ends up costing you more – particularly if you buy new.

With that said, there is one instance where buying from a car dealership can pay off, and that is by buying a Certified Pre-Owned car that is still quite new.  If you buy a Porsche, for instance, which has only been driven for a year and less than 10,000 miles (which is not uncommon) under the Certified Pre-Owned program, the warranty will extend to 6 years and 100,000 miles.  You can find a list of CPO warranty programs here.

To me, this is like having your cake and eating it too.  Since the car has already suffered its initial depreciation, you don’t have to worry about it shedding thousands of dollars in value on your drive home.  With the extended warranty, you don’t have to worry about getting stuck with an unreliable car, especially since it is backed by the manufacturer.

A car that has only been driven for a year or two with low mileage (preferably around 7,500 miles per year or less) will in all likelihood be indistinguishable from a brand new car.  You will also have the same amount of time to drive the car under warranty as someone who bought a new car.  The only difference will be that you can save somewhere in the neighborhood of 30-40% on such a car versus the brand new price.

Returning to the Porsche, Edmunds TMV puts the value of a 2006 Carrera 2S at $52,034 today (full dealer retail price).  Not bad for a car with a base price of around $80,000, especially with a warranty good for 3 more years.  Even if you can’t afford a Porsche, the same principle applies.  Your total cost of ownership will be drastically lower since the depreciation is not nearly as steep as buying new and you’ll still be fully covered by the manufacturer warranty which will prevent you getting stuck with big repair bills.

As long as you can deal with the high pressure salespeople in the dealership and keep your cool while negotiating, buying a relatively new CPO car is not a bad way to go.

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.

One of the most effective and probably simplest ways to increase your sale price (through a private sale) is to use the principle of scarcity; items in short supply are considered more valuable.

The way it works is simple in principle, but slightly more difficult in execution.  When you have written an ad that generates sufficient interest in your car that multiple people have expressed interest in seeing it, schedule the prospective buyers to come at the same time.

One benefit to this is that it will save you a ton of time dealing with different buyers separately.  If you schedule buyers to come at different times, you might take up your whole weekend showing the car, because you are constrained by the fact that you need to be around when they show up.  Inevitably, people will cancel or try to reschedule, which makes selling the car even more of a pain in the ass because you will probably have commitments at other times in the day which are conflicting.

Even more time is saved because you are greatly increasing the chances that the car will be sold each time you show it.  When a buyer comes and sees someone else looking at the car at the same time, he will see that there is a real chance he might not get to leave with the car unless he acts quickly to capture the deal.

The first time I heard about this technique from a friend, I thought it was a truly novel idea.  I soon found out that in Robert Cialdini’s book Influence, he discusses this exact method of selling cars in a chapter dedicated to the principle of scarcity.  He says that his brother used this technique to flip cars and pay his way through college by buying undervalued cars one weekend and then selling them the following weekend after cleaning them up a bit.

Schedule 2 or 3 prospective buyers to show up at the same time (writing an ad that will do this is really the most difficult part).  When the first buyer shows up, he will begin inspecting the car as you would normally expect.  Once the second buyer shows up, however, mention to him that he will have to wait for the first person to complete his inspection of the car since he arrived first.  Tell buyer #2 that if buyer #1 decides not to purchase the car, they can have a look at it and decide if it is right for them.  If a third buyer shows up, repeat the same process with him.

This does several things to help you sell your car:

• It applies time pressure to the buyers
• It clearly demonstrates the demand for the product (social proof that it is valuable)
• It takes something originally considered abundant and turns it into something scarce

Cialdini points to several experiments indicating that the principle of scarcity is most effective in raising the perceived value of an object or freedom when it is readily available and is subsequently taken away rapidly.

Car salespeople use this technique every day to encourage people to buy, mentioning usually that a car has a unique and highly desirable set of options, or that the model itself is in high demand and/or short supply.

While you own your car, you should always keep a close record of maintenance.  While this helps you a great deal to keep regular service items such as oil changes on track, it is arguably even more valuable when it comes time to sell your car.

If a car doesn’t have a full maintenance history backed by receipts, I don’t even bother to look at the car anymore.  It just isn’t worth the hassle, and is too much of a gamble.  Detailed maintenance records tell you a lot about a car and its history.

One thing that becomes readily apparent is how organized the seller is.  Someone who has sporadic records of maintenance probably was also sporadic in their upkeep of the car, which is definitely not something you want to suffer the long-term consequences of as the next owner.  A seller who hands you a neat, organized file full of receipts with a spreadsheet summarizing the items projects the image of someone who took care of their car day in and day out.

Since the vast majority of the fear associated with buying a used car comes from uncertainty about the vehicle’s history, keeping a log of maintenance records is a must if you want to ensure potential buyers that they have nothing to be afraid of.  Basically, you don’t want to give the buyer any easy excuses to not buy your car.

Keeping maintenance records is not difficult, as long as you are systematic about it.  Half of the work is just labeling a folder and making a spreadsheet to keep track of the maintenance.  After that, keep putting every receipt related to the car in the folder and update the spreadsheet with a few items every time.

My suggestion for what to track in the spreadsheet includes:

• Date
• Mileage
• Description of Service
• Shop/dealership name
• Parts Cost
• Labor Cost
• Total Cost (summation of the previous two items)

In all of 30 seconds or less each time work is performed on the car, you can have a nice, organized file which could make a difference of hundreds or thousands of dollars when it comes time to sell the car.  Since many buyers will not have the vehicle history recorded and neatly organized, you will raise the value of your car and differentiate it in the eyes of the buyer, encouraging them to buy from you so that they have peace of mind.   Not only that – they will appreciate what you’ve done for them if they ever need to refer to the car’s history for any reason.

Feel free to use this to keep track of your car’s maintenance:

When most people think of negotiation – particularly over the price of a car – I’d venture a guess that they envision a hard-fought battle with their opponent.  The best negotiators know that learning to compromise and make the deal more of a win-win situation is what negotiation is all about.

If you can give something to the other side which you don’t care about, or were going to do anyway, you can ask for a concession from the other party to improve your deal.  An example of this when negotiating with a private seller would be that if they are in need of a quick sale, you can bring payment immediately in the form of a cashier’s check or money order.  In exchange for making the deal happen quickly, you might ask for a reduction in the price or that they perform a major service before you take delivery of the car.

If the seller needs a few days to find a new car before he sells his current car, accommodating him in that respect would also be grounds for a concession.

Roger Dawson, in his book Secrets of Power Negotiating, cautions that taking a confrontational or argumentative position at the outset of negotiations can be disastrous.  His advice is to use the widely known “Feel, Felt, Found” pattern in which you would say something to the effect of “I understand exactly how you feel about that.  Many other people have felt exactly that same way as you do right now.  But you know what we have always found?  When we take a closer look at it, we have always found that…”

If you ask for the seller, for instance, if he would be able to pay for a warranty extension since he is the original owner and he reacts by telling you that it is usually the responsibility of the buyer since he will be benefiting from it, you might respond with:

“I understand how you feel about that.  Many other sellers have felt the same way. But you know what I have always found?  In today’s market, owning used car without an extended warranty isn’t worth the risk, and having that warranty will really help to put my mind at ease.”

By defusing the situation with this dialogue, you can help to avoid negative feelings which will lead to a lack of concessions from either party, which hurts both of you.  A side benefit is, of course, that it’s much more pleasant to go through a negotiation this way rather than the normal high-pressure win-lose situation that typically transpires.