buying a used car from a dealer

I want to buy a used Honda Odyssey. I have been watching the dealers around here for a while, and one nearby has one I like (2004 EX-L, 55K miles, loaded with everything except sunroof and DVD player (both of which I do NOT want anyway)).

I have financing already arranged through my credit union. When I negotiate the price, I tell them and they fedex a check.

My questions are mostly about the negotiation process.

The vans are popular, but since the 2005 model year redesign, they aren't as hot as they used to be. This one has been sitting on the lot for a week and a half already, and the sales d00d I talked to on monday wasn't in a big hurry, and didn't make any "this one will go fast" type of threats to push me into acting faster.

The dealer is asking $20,900 for the van, which is below the "blue book" value of around $22-$24k but above the actual selling prices I'm observing on ebay (comprably equipped vans with significantly fewer miles are going for around $20k). My credit union, which is very helpful, told me that the "loan value" of the van with the options and milage is $16,900 - this is supposedly the amount the dealer would pay if he bought it at wholesale auction, and this is where the credit union suggested I open negotiations.

After that, though, it gets fuzzy. Of course they're going to laugh at the first offer, which is fine, but then they're going to come back with something like $20k, say. What's my next move? The credit union's buying guide literally suggested upping my offer by twenty five dollars. In their example, the dealer's asking price was $22,000, the opening offer was $17,000, the dealer's counter offer was $21,000, and the buyer's next offer was "how about $17,025? Well, $17,030?" The idea being to show that you're a "tough negotiator" I suppose. Does this work? I don't mind walking out on this van if they won't come down on the price, as another one will show up in a week or two, but I don't want to be so unreasonable that they won't deal with me in the future.

What price can I reasonably expect to get out of them, and what is the most effective way to do it? I plan on making it clear that any offer I make is to include all of their BS dealer fees, etc, everything but tax and title (or should I make them include that too?)

BTW, the van is "Certified" which means I get a 3,000 mile waranty on the vehicle, plus a 100,000 mile (total) warnaty on the powertrain.

Ever since I read "You Can Negotiate Anything" by Herb Cohen, I have absolutely loved car shopping!

He makes 3 points, but I always forget one of them. The other two are (and they work):
1. Make the salesman invest of alot of time. Go back several times ("I just wanted to take another quick test drive before I have to pick up my kids"). If he invests a lot of time, he'll start thinking "with all the time I've put in, I HAVE to close this sale!"

2. Never let them know your deadline. If you say something like "well, I wanted to trade my car before I make the next payment" you are hosed. You can accidentally give away your deadline too. "Yeah, I thought we'd get a new car before our vacation next week."

I've bought 3 cars in the last two years: one new and two used. In each case, they came down $2000 at the drop of a hat.

I wouldn't even make an offer before you go in a couple of more times. The most important thing about getting your best deal is be ready to walk away! That is the most powerful tool you have. The last truck I bought was for a business I started with my son. We stuck to our guns at $20k when the dealer wanted 21. We got up and walked out. While we were standing in the parking lot talking about going to another dealer, the salesman ran out the door screaming "OK...we'll take $20k!!"

Squeezed them just enough!

Another important thing is knowlege. Know what they paid for it (the Trade In value from Kelly Blue Book ... see link below). Allow them a reasonable profit - maybe $1000 - and refuse to pay more. This last time, I got the standard comeback "we paid more than that ($20k) for the truck", to which I responded "I'm not responsible for you making a bad deal and it doesn't make the truck worth any more." Then the sales manager comes in and says "we paid a lot more than wholesale for that truck." I laughed and said "You want me to believe you've been in business for 27 years by paying more for a vehicle than it's worth?"

Here are a couple of websites that are helpful:

Kelly Blue Book (you can get Retail, Trade-in (wholesale), and private party prices)
www.kbb.com

Lots of good info, including negotiations.
www.edmonds.com

Good luck and have fun! :naughty:

Without actually giving this as advice, I've found that dealers are not likely to adjust to eBay pricing, but if you can find a vehicle of the same year, mileage and trim level at a dealer's online pricing, dealers my change their tune VERY quickly.

Two examples... In about 1999, I was looking at a dark blue 1997 Audi A4 Quattro 1.8t, manual transmission with just under 60,000 miles. The dealer was asking $23,000 I think. We sort of gently talked about price, but nothing firm. Basically he was saying they might be able to come down $1,000 or $1,500 at the most and that was only because of the manual transmission (which I specifically wanted). I found a dealer in Schaumberg (sp?) Ill that has a silver 1997 A4 Quattro 1.8T with an automatic for $17,995 (or thereabouts). I printed it out, took it in and without hesitation or talking to the infamous 'Sales Manager' the sales guy said something like, 'Yeah... we can do that price.'

Second one was in 2000 or 2001. I was looking at a 1998 Ford SVT Contour with under 36,000 miles... Pretty specific car, the SVT. The price was around $17,000 and I got the same response that they might be able to come down $1,000 or so to make the sale. I actually put $500 down to hold the car (as it hadn't even been detailed yet) but said that we'd have to work on the price and he again stated that they probably wouldn't be able to move much because of the desirable nature of the SVT. I called him back a couple days later and just told him that there was the identical car even in the same color for $12,000 and again, he said, 'No problem.'

Honda dealers aren't renown for their urgency to come down in price on either new or used cars unless it's an advertised special but when I was looking at a brand new 1999 Honda Civic Si (which was about $17,200) a sales guy at the Acura dealership said that they could match that price but give me an Acura Integra GS-R though the Acura's sticker price was $5,000 or $6,000 higher.

It really comes down to how sure you are of yourself. Don't seem too eager to get that specific vehicle. You never know... the guy could have had a bad month and is just dying to get a sale or maybe he's $3,000 away from being the number 1 sales guy for the month... You never know.

As far as actual advice, I would be too agressive. I wouldn't go in initially with the printout from the online dealer because that gives him very little haggle room and depending on the sales person, that may put him off immediately. I would first of all mention that the 'Blue Book' is absolutely worthless... The Yellow Book and Black Books are the only ones that mean anything in the real world to people who know what they are actually getting into. I'd just about follow the suggestion you listed, but I'd probably go in $300 or $500 increments. I'd offer $16,500 and be willing to give $17,500 or $18,000 for the van. Definately don't cut off your nose to spite your face though... The Odyssey and Sienna have excellent resale value which you will possibly benefit from on down the road. We bought my ex wife a 2001 Caravan though I desperately wanted to find an Odyssey. At the time, the very cheapest second generation Odyssey I could find in the country was $18,000 and had about 70,000 miles on it. Of course, this is when the second gen was the current production.

Personally, I think the second Gen Odyssey is the exact Minivan I'd get if I had to. The new Odyssey and Sienna have some nice features and are larger, but the second gen vans are very sharp looking and would definately be my first choice.

I drove by a used dealership once, saw a silver camaro for 7,xxx. Right away someone came out and said would you like to test drive. I said sure. Why not I'd like to see how fast this auto/v6 is. It wasn't at all as fast as my car but I loved the RWD it hooked up so nice. Came back and got out, they offered to give it to me for 4,500 right there on the spot!! I figured they got the car for probably 2,000 from another dealer (new car dealer) that they got on a trade in.

It had bit hit on the side by a pole or something the door and groundfx had a crack, so I figured they wiped out into something and I didn't look at the damage too much. even though it would be an easy fix, and the car looked so clean and nice, I wasn't ready for higher insurance and a slower car. (unless I put on turbo lol, but I'd need 5spd).

Anyways that just shows you that how much of a mark up that used dealers can do. Usualy as a rule of thumb I figure you can throw out an offer at least 2k lower than what they are asking (unless the car is selling for 2,000 from the start of course!).

Screw the Blue Book.

Another poster mentioned http://www.edmunds.com/

He mis-spelled it, but it is THE recommendation.

They'll give you wholesale/retail to the dollar. They even factor in paint color.

I have saved THOUSANDS using this site.

It also calculates wholesale/retail on a trade in.

OOPS! I did spell it wrong. (the funny part is I had it open in another window! "edmonds.com" works too!)

I agree about KBB, although it does provide ballpark numbers. Another site is (spelled correctly!):

www.nada.com

National Automobile Dealer Association. Unlike some other sites, they also have values for boats and motorcycles.

Ok....Before getting into Law Enforcement, I sold Acura's and Toyotas for years,

The credit uinon did not steer you wrong on the 16.900.
The dealer is asking 20.900

Dealer might have a few hundred lost in reconditioning.
You should also have a balance of the factory warranty, find out if the previous owner had bought an extended warranty.

As for buying it, Kudos to you for securing your own financing. But remember that qualifys as a cash deal to the F&I that will do all your paperwork for you, The thruth is 95% of dealers pay there finance managers aka F&I nothing for cash deals...so, the money to be made is on the vehicle not any money from the finance part of it.
At my old dealershio I would stand to make after pack....about 650.00 dollar commission on that Honda at the asking price of 20.900

My offer IF they paid about 16.900 would be a flat 17.500 if they balked, BE VERY NICE and walk out, let them discuss this, come back the next day drive it home for about 17.900.

You can ask to see what they bought it for, that never hurts, and of course is the magic number. find that and add 4% And that is what you pay, which is fair to the dealer.

Ask for service records!!!!!!!!!!!!!!

Beware of extras that might be thrown at you by F&I, or by anybody for that matter.

Example as I will pretend to be you.

You: I really want to buy this at 17.900 take it or leave cause I have some wicked flashlights that need modding at home.
Dealer: OKAY, but here is what we will do TODAY only. what if I sold you at cost, A new whopptee thingamijig that fits between the third row seats and holds 90 cases of beer, would you buy today?

Be carefull of stuff like this, very very carefull.

I could go on all nite on this topic, any questions please PM me. I would love to help.

Very helpful, guys, thanks a lot. I am going by the dealer this afternoon to look at the car and drive it again, but I don't intend on making any offers today. I will ask for the service records. I also asked the sales guy about the previous owner (whether it was a lease or owned, etc) and he said he would get that info to me today. I also plan on peeking at a few other vans on the lot just in case.

One other thing. Carfax... I assume this is worth the $25?

Does anyone already have an unlimited subscription?

Carfax.. Is this helpful ? Looks like the dealer might provide the report at no charge?

http://www.aiada.org/article.asp?id=33221

Manufacturers Offer Free Reports On Certified Pre-Owned Vehicles

Starting today, used car shoppers have free access to Carfax Vehicle History Reports for Audi, Chrysler, Dodge, Jeep and Saab Certified Pre-Owned (CPO) vehicles. Visitors to AutoTrader.com get on-the-spot vehicle history information direct from Carfax to make more informed buying decisions. Every CPO vehicle from these automakers comes with the exclusive Carfax Buyback Guarantee.

"We want Carfax information to be available wherever people are shopping for used cars," said Larry Gamache, communications director at Carfax. "We're thrilled that free Carfax Vehicle History Reports now are available on Autotrader.com for these five CPO programs and fully expect to add more in the very near future."

Fourteen CPO programs currently mandate Carfax Vehicle History Reports as part of their certification process. Free access to Carfax Vehicle History Reports is available through each manufacturer Web site in addition to those now listed on Autotrader.com.

The carfox logons listed at Bugmenot all have a 0% success rate.

Well I bought my used car from the Saturn dealer. First thing which was dumb luck on my part, I needed and bought the car in September. Suddenly the car is a year older and suddenly marked down a grand. Also I thought I got a good deal but know if I really would have shopped around at used car lots, I probably could have gotten a better deal. But....they really took care of me as far as initial repairs. After test driving, I complained of some front end shaking at highway speeds. They ended up giving me two new tires for free. Complained of a rough idle and they replaced a part that fixed that. Lastly complained of a mild squeak and got a serpentine belt replacement. Don't know if unique to Saturn but very satisfied with the experience. Plus when I go in for oil changes, etc., the saleswomen always recognizes me and comes over to say hi.

Anyone ever buy a car from Carmax? They are supposed to be one of those "no haggling", you pay the sticker price on the car type of places. But if you look at the cars that are available you will find similar models with widely varying prices, which seems to imply that they paid much different prices for the same cars. I have often seen price differences of 3 or 4K for the same car, in the 10-20K price range. Anyone have any insight into this place?

yes!!!!!!!!!!!

Get a CarFax!

Better yet, ask the dealer to run the CarFax, Most times they already have a acct set up.

Any wreck that was ever "reported" will show up, Odometer discrepencies, whether the vehicle was once a rental vehicle etcetc

I will say if the dealer wont do it, then run one your self, it is very much worth the money!

tylerdurden said:

One other thing. Carfax... I assume this is worth the $25?

Does anyone already have an unlimited subscription?

Click to expand...

Update regarding the "tough negotiator" technique, I received this email from a trusted advisor (though one who isn't necessarily a car-buying expert):

Clarkmeister recently bought a car using almost exactly this technique. Except, he didn't give them even $25. He told me the story something like this (forgot the exact numbers):

Them: 34?
Him: 28
Them: 33.5?
Him: 28
Them: 33?
Him: 28
Them: 32.5?
Him: 28
Them: 32, and that's as low as we can go
Him: I know you'll go to 28, so can we just get this over with?
Them: 32 is as low as we can go.
Him: I faxed orders to other dealers, and the lowest offer got just a few hundred above 28. So it's 28 or nothing.
Them: 31?
Him: 28
Them: 30?
Him: 28
Them: 29.5?
Him: 28
Them: 29?
Him: 28
Them: 28.5?
Him: 28
Them: 28.1? (Yes, they really offered him his price plus $100... that's balls)
Him: 28
Them: Ok.

Click to expand...

Wow, I may actually try this, though I'll have to really nail down the price ahead of time.

There are lots of ways of thinking and many are effective and some are not.

Here is some real world truths.

The person that comes back again and again, before buying may think he's wearing them down when in fact what may be happening is the salesman and manager get tired of having their time wasted and decide the buyer will have to pay a little more for using so much of their time. The way to avoid this is stay on the original vehicle. That's not always possible because it gets sold. Also, the person that wears out the dealership before they buy is less likely to get any $$$ help should the vehicle need something shortly after purchase. Last thing on this topic, going up $25 at a time on a $20k vehicle is IMO silly and would indicate to me a lack of experience and knowledge. If you have an idea your first offer is $1250 low do you think the deal will keep going for 50 back and forth's? What if you offer is $2,500 low, that's 100 times. If you make the increase once every 3 minutes with no breaks you will get there in 5 hours. Be reasonable and did someone write that $25 increase book back in about 1940?

KBB, Edmonds, and NADA are books, they have yet to buy or sell the first vehicle. Sometimes they are dead on and sometimes they are clueless. Yesterday I looked at a 2003 Expedition with 27k miles, XLT. KBB said the 4.6 liter truck and the 5.4 liter truck are worth within $100 of each other. The reality is the 5.4 is worth about $1,500 more. Average KBB for the truck was something like $15.2. We gave then $15,500 for the truck and it had the 4.6. We were giving them, $17k for the truck when they told me over the phone it had a 5.4. I hadn't checked the motor when the came in briefly the day before. From my experience KBB has been the most reliable for actual wholesale worth but is far, far from foolproof. A nice vehicle with good miles for the year often is worth right at KKB trade-in average. If the vehicle is in high demand or there are not a whole bunch of them available, throw the book away or you will end up getting mad. If the vehicle has extra high miles then KBB may be to high.

It doesn't matter what the price of the vehicle you want is if you have a trade-in. If I had a 2005 Suburban I bet I could sell it to anyone in their right mind for $500,000. How could I get such a big price? Easy, I give them $499,000 for their 1990 Geo Tracker. Here's the point. The only number that matters when trading in a vehicle is trade difference. In this case the trade difference is $1,000. I could have sold him my Suburban for $2,000 and given him $1,000 and it would be the same deal. Don't ever be put off by the price of the vehicle they are selling. When they give you a price for theirs and what they will give you for yours do this: Have in mind what you really think yours is worth. Not pie in the sky, what it's really worth wholesale. Take that number and add the trade difference to it and that will give you the price they are really trying to get you to pay for theirs.

Be nice and you may get a salesman or manager that will be in your corner for years to come. That tidbit only applies to certain franchises. Ask your salesman how long he/she has been at that store. The longer they have been there the better chance you have of a good outcome. In the car business anything over 5 years at the same store is very good.

Want to know how to get a good, fair price on any vehicle at nearly any dealership without having to bust your tail or make several trips? PM me for the answer, I will not post it. It has nothing to do with the internet or a book. It won't work if the vehicle is rare or a collector piece.

Tyler,
Your post above would never work at our store, ever. We don't have a vehicle on the lot (600 used) that has nearly that much markup over wholesale. I'm not saying some places don't that but none of the franchise stores I have heard of, at least in the sub $40k price range. On a new one yes, once you factor some of the ones with the bigger rebates. I believe some collector cars have $6k and more markup from what they will take but that's the pie in the sky vehicles.

You don't negotiate down from the sticker, you negotiate up from the dealer's cost, which is a bit trickier on used cars.

Of course, then you can get screwed on the trade in.

Buy a book on buying cars.

It will be the best 20 bucks you ever spent, and have an independent mechanic look over any car before you buy it.

I agree on the $25 increment thing... I mean, that would get old on about the third offer. And on the example you gave above from your buddy... Any dealer that would actually sit there, and would initially only come down $500 while someone had verbally requested a $6,000 discount then try to get $100 over the offer is either silly or literally has something wrong with their head.

I mean, I'm not disputing it, but it must have been a brand new guy and a buy here, pay here lot. If I owned a dealership and found out one of my employees had wasted that much time trying to make $100, I'd fire him so fast his head would spin.

Another little method I will use from now on will be,You pay the $35.00 my mechanic wants to check the vehicle. If it passes, and we go to contract then I will give you back the money. $35.00 doesn't seem like much, but it demonstrates how open, and willing to work the dealer is. Carfax is good, but will only show you what was reported. It won't show any "shade tree" work. or maintenance routines. As everyone eles has said the most important thing is being willing to walk away. There are far too many other cars, and dealers for you to spend a lot of money for a lemon.

Bravo25 said:

Another little method I will use from now on will be,You pay the $35.00 my mechanic wants to check the vehicle. If it passes, and we go to contract then I will give you back the money. $35.00 doesn't seem like much, but it demonstrates how open, and willing to work the dealer is. Carfax is good, but will only show you what was reported. It won't show any "shade tree" work. or maintenance routines. As everyone eles has said the most important thing is being willing to walk away. There are far too many other cars, and dealers for you to spend a lot of money for a lemon.

Click to expand...

I'd be surprised if you get many takers on that offer. Not many dealers are going to put their trust in some else's mechanic; the guy could be incompetent or it could be a scam.

With rare exceptions, when I go to buy a used car from a dealer, I have a set price in mind that comes from a lot of research, and I tell the dealer that price. I let him know that's how much I'm willing to pay, and I walk if he doesn't agree. It is always a fair price, even though it is of course less than the dealer wants to get.

I basically do the same thing when buying a new car. I do my research and have a price in mind I want to pay. Five years ago when buying a new Dodge Neon the MSRP on it was around $18,700. The price I had in mind was about $5000 less. When buying that car my wife and I were at the door walking out on two occasions in the negotiating process when they came after us wanting to "deal" some more. We got the car for $13,800.

-Keith