The game of Haggling: How to Get a Great Deal on a Used Car
My husband and I bought a car over the weekend — a 2008 Mazda5. At the car dealership, I told my kids that we were playing an exciting game called "Haggle" with the car dealers. In this game, the car dealers want us to pay a lot of money for a car, and we want to get a very good car for a little money. All afternoon, the girls would whisper, "Are we winning?" I think we won. We bought our car for less than 75% of the asking price, and got an extended warranty at half price. They gave us a good value for our trade-in and a very low interest rate on our loan.
Here's how we did it.
1. We had a plan.
My husband is from Argentina, where they haggle over the price of a cup of coffee every morning. He's much more used to talking down a price than I am. We agreed in advance that he would do all the direct negotiation with the car dealers. I'm a journalist by trade, and good at research. My job was to find the right car, research our options and give him all the information he needed to get a great deal.
2. We knew what we wanted.
Our household keeps very detailed financial records, so it was easy to look back and see exactly how much driving we'd done in the past year. Since we have three kids, we knew we'd need a car with three rows of seating, which limited our options a lot. Beyond that, our priorities were safety, affordability, reliability and fuel efficiency, in pretty much that order. We wanted to buy a used car, but a gently used one.
3. We did our shopping and market research online, not at the dealership.
We used edmunds and Consumer Reports to research all the available six- or seven-passenger vehicles. After narrowing our choices to the Toyota Sienna, the Honda Odyssey and the Mazda5, we checked out local dealerships. Most of the dealers in our area have some of their used stock advertised online, so we were able to choose a few specific cars to look at.
4. We played our cards close.
Things we did not share with the salespeople included: how many kids we have, the fact that we had no working vehicle, where we live, how much driving we do, what we liked or did not like about the cars we drove, what our budget was. This was possible because we knew exactly what we wanted. Walking onto the lot and asking for a specific vehicle from their inventory made it clear that we were serious buyers, but also left little room for exploratory questions. Because we were not browsing at the dealership, we didn't have to enlist the salesperson's help in finding what we wanted, and when it came time to negotiate, he didn't know how much we wanted the car.
5. We were not afraid to walk away.
Even though this was the right car for us, it wasn't the only one. All that research before going shopping paid off here. No matter how intense negotiations got, we knew we could get a good car for the money we wanted to spend from someone, so we didn't stress if it wasn't this car at this dealer. Staying focused and calm made us more effective bargainers.
6. We stayed neutral.
This "we" really means my husband, who as I mentioned above did all the talking during the business dealing. He refused to get caught up praising or criticizing the car they were negotiating over. He just stayed focused on the money, and the deal. He made it clear that he wanted to buy a car, and that this car was a perfectly acceptable one to buy, but only for the right price.
7. We had competing offers.
This was the trump card. We negotiated a deal on an older Sienna before going to see the Mazda. As my husband talked price with the Mazda dealer, he said, "Look, I can buy a Sienna down the street for $5K less than you want me to pay for this car. It's an older car with more miles, but it's bigger and more luxurious. Your car is not worth more to me than that one." The salesman knew we were willing to walk away, so he matched the price.
8. We let the little things go.
After a price had been settled, we were treated to a classic used car sales trick where the price magically crept up $1,000 because of some technical detail with our trade-in. We could have gotten angry and demanded the lower price we'd originally agreed on. Instead, my husband let it go. As soon as he was done with the sales office, he complained to the business office about the switch, and they apologized and gave him a $3000 extended warranty at half price. We came out ahead, and skipped a bunch of unproductive fighting with the salesguy.
9. We were not afraid to be rude.
When the finance folks said 6% was the best rate they could possibly give us on a car loan, my husband took out his cell phone and called AAA for a competing offer from the lobby of the dealership. Suddenly the dealers offered us a 4.6% loan.
Ultimately, we got a great deal on exactly the car we wanted. A better car than we thought we could afford when we started shopping, and one that we hope will be with our family for the long haul. Good luck with your own car shopping adventure. Please share your car buying tips and tricks in the comments.