Used Car Negotiation & Loans
Understand the many aspects of sitting with the person from whom you’ll make a purchase and your financing options.
Question: Do I really have to negotiate? It’s such a terrible experience and I feel so intimidated.
Negotiating a car sale isn’t most people’s cup of tea. If you’re buying from a dealer, it means sitting down with someone who may have more experience than you do, particularly with car sales. It doesn’t have to be an intimidating process, though. You have all the power in the transaction: you can buy a car from the first person or the 10th, while the salesperson needs to make every sale he or she can.
Question: How can I make the negotiation go smoothly?
Know your price – The Internet is a fantastic resource. Once upon a time, the salesperson knew more than the customer about car prices, and that was particularly true of used cars. Now, you can determine the price you’re willing to pay before you ever walk in, and refuse to pay one cent more than that. If you want, you can even email back and forth between multiple salespeople, letting them bid against each other.
Don’t say too much – There’s very little you can say to make a negotiation go better, but there’s a lot you can say to make it go worse. You’re not going to cause the other person to have a sudden change of heart and cut you a better deal, but you might give the clues they need to know they can hold out for more money. If in doubt, don’t say anything. It can be difficult, particularly when the silence is awkward and tense, but saying nothing is often the right thing to do.
Walk away – It’s an old saw in sales: “He or she who can walk away controls the deal,” and it’s been passed down from bullpen to bullpen because it’s true. If you aren’t willing to walk away and leave the salesperson without a sale, then what incentive does he or she have for lowering the price? It feels terrible to spend an entire Saturday on car lots and still wake up on Sunday without a car, but you need to get over it. When you go out to buy a car, make a resolution to wait a week before you buy. That will make it easier to walk away and give you time to make sure you’re certain of your purchase. If you wait, you might even get a phone call during the week with a better price, particularly if it’s near the end of the month or if it’s been raining. Is it worth a few days wait and another day’s work to save a few hundred dollars? In most cases, it is.
Question: Should I finance the car at the dealer?
One of the keys to negotiating a car deal, whether at the dealership or from a private seller, is securing the best financing available. After all, even one percent difference in your interest rate can be worth hundreds, or even thousands, of dollars over the life of the loan.
Get your financing first – The best way to get the best rate is to borrow from your credit union. Our auto loans have fantastic rates, and we’re not trying to sneak in any hidden charges or fees. If you come to us first, you can make a clear plan for how much you can spend, so you’re not surprised when that first payment is due. We can also tell you how much you’ll need as a down payment, and we might even have some good tips on who you can trust in town. You can start the pre-approval process with ACU.
Hopefully, if you’re planning on buying a used car, you’ll save money and get a vehicle that will make you happy for years to come. If not, feel free to trade your vehicle in and start the guide over from the beginning. And remember, you’re always welcome to talk with your partners at ACU for more information and guidance to make your car buying experience as enjoyable as possible.