A good price on a used car is what you feel confident a purchase is worth. In simple terms paying under market value for a car is generally considered a good price, while paying over is considered a bad price. If you purchase a car today and sell it tomorrow for a profit then that would be considered a great price.
The nuances of how to value a car and leverage details to negotiate is the art of finding a good price. The information is simple but effective when combined. The factors of a good used car price are broken down into the basics.
Owner- Dealer vs Private seller
Private sellers are the preferred choice when looking for a good price on a used car. Most sellers will know the history of their vehicles and you’ll be able to inquire about the condition in more detail.
An owner can tell you what maintenance items the vehicle may need as well as what has been done. When it comes to sale price negotiation you have your best chances with an individual.
Private sellers aren’t just looking to make a profit so that gives you flexibility on price. The more information you know about why an individual is selling the more chance you have to close in on a good deal.
If a vehicle is owned by a dealer there’s generally less room for negotiation because the person selling it is looking specifically to make a profit. Dealers will also generally do the bare minimum in order to sell the vehicle. Their main goal is to make money, and take as much of it from you as they can.
All hope isn’t lost however, when trying to buy from a dealer. If you know the vehicle well and can leverage some of its weaker points you can get a dealer to drop the price some. Having a firm price in mind and being willing to walk a way is key.
The condition of a used vehicle is primarily what determines its price. It’s the main reason why a buyer would be attracted to a particular car in the first place. Depending on the condition of the car you can leverage that to get a good deal. Determine the market price of the car as it sits. Any price you can negotiate lower than that is generally a good deal.
If you’re competent at assessing the condition of a car thoroughly you’re ahead of the game. However, having a mechanic you trust look at a car can really help you determine what the true condition of a vehicle is.
So where to begin?
Used car market economics
Knowing the state of the used car market can really affect what type of deal you can get. Is it the beginning of summer and you’re looking for a convertible? Chances are you’ll pay a premium. Check out this guide on when the best time of the year is to buy a used car to get you up to date.
Certain cars carry a premium no matter what. Rare cars will be tougher to negotiate simply because of supply and demand. Low Supply + High Demand = High prices.
If you’re looking for a comprehensive list of the best used cars right now check out this list by Carmax. It’s thorough; including categories by each type of vehicle as well as price ranges.
Brands of vehicles may also affect your ability to get a good price on a used car. For example, Toyota’s have a reputation for reliability. Toyota vehicles demand a premium in the market over similar vehicles no matter the condition simply because of this.
On the flip side, manufacturers that don’t have such a stellar reputation for reliability are heavily discounted even when the vehicles don’t reflect it. Using this to your advantage will help you score a better deal.
A good price on a used car comes down to one thing. Leverage. Where and how to find leverage comes in different forms. Market forces, condition of the vehicle, or simply whom you’re buying from. It’s up to you to determine where and how much force you can apply in the negotiations.