How To Haggle For a Used Car

May 19, 2017

Disclosure: Some links to products on this website will earn an affiliate commission.


A few weeks ago, I bought a used car. I had a few goals heading into the used car lot. I wanted a car:

  • That was only a few years old

  • With 1-2 prior owners

  • With no accidents on the Carfax

  • With low mileage

  • That was hopefully Certified Pre-Owned

  • A DEAL! Extra emphasis on this one. I wanted to win at the used car sales game!


I read a ton about buying used cars and sought the help of a few expert friends. I got a GREAT deal on a car and learned a bunch of useful haggling techniques and best practices along the way. Read on!


  1. Be Informed. Not impulsive. Make an informed decision about what type of car you want and remember that cars depreciate in value (their value drops precipitously as they age and their mileage goes up). I recommend reflecting before heading to the car lot. Think about what kind of car you want to buy (size, price, brand, used or new). What led you to those conclusions? Test your assumptions. Do you really need an SUV? Do you really need a luxury car? Why are you leaning toward Ford – is it because your parents drove Fords? Is there a better, safer, or more affordable option? (Fords are great, safe, and affordable cars – that’s just an example). .

  2. Be Careful About LeasinG. About 20% of used car transactions every year are leases. Leasing is similar to renting an apartment. It's basically a long car rental. You don't build any equity in the car. You're responsible for damages, including scratches and dings. There are limits on how far you can drive it. Plus, if you decide to buy the car at the end, you'll pay much more than if you had financed it in the first place. However, if driving a sweet new ride every few years if very important to you, then leasing may be worth the price. 

  3. Do plenty of research on price. Once you’ve chosen a make and model (and year and mileage range, if you’re buying used) that you like, spend some time on Kelly Blue Book learning what you should expect for price. There’s usually a range, called a “Fair Market Range.” Next, check TrueCar, Edmunds and CarsGurus to see the cars for sale in your area. You’ll note that the prices probably fall in that Kelly Blue Book range, but some will be high and others low. CarGurus has a nifty tool that tells you if a car is a “great deal!” (if it’s lower than the average for that car, model, year, mileage) That’s one way to hunt for deals.

  4. Search for cars. One strategy is to find cars that you like online and then head into the dealer to look at them. One downside that I found of this is that not all cars and dealers list on all websites. The sites are an incomplete picture of what is available in your area. You might be better off calling dealers nearby and asking them if they have the car you’re looking for.

  5. Be boring and don't overshare. Give the dealer the impression that you are confident and disinterested in his games. Head into the dealer to look at the car. Look for the youngest salesman or saleswoman and approach them. But keep your mouth shut! Just ask to look at the car you’re interested in. Don’t reveal information about your life, circumstances, finances, why or how much you need a car, how you’re looking to pay, or what your budget is. That information gives the dealer an edge in negotiating with you.

  6. Find a car that you like and want to make an offer on. Take note of the list price, ask if it’s accurate, and WALK OUT OF THE DEALERSHIP. They will desperately want you to come to their desk, apply for credit and settle on a price on the spot. They might even beg you because it might be something the salespeople are required to do. Just say you’ll get back to them and WALK OUT.

  7. Make an offer. Call back or email or go in 24 hours with an offer.  Offer a price below list price. I suggest 20% below list price, which will most likely be just below the Kelly Blue book fair market range. Any lower and you'll seem delusional. While you’re waiting for them to respond or counter offer, do some research to find all the comparable models in the area that have a price similar to what you’re looking for. Maybe even go test drive them. That’s your negotiating ammo.

  8. Counter offer. Wait for them to hem and haw. They’ll come back with a counter offer. It’ll be lower than list price but not quite what you offered. Now, use your ammo. Mention that X dealership down the road has X car for $X. Give an updated offer (maybe 12% below list price) and say that if they accept it, you’ll be in the dealership tomorrow buying the car. If they accept, great.

  9. Negotiate your trade in, if you have one. Bear in mind that you might get a better deal if you sell your car to a person than a dealer.

  10. Decide if you’re going to bluff. If they balk at your lower offer, make a call. Are you ready to walk? If so, tell them to call you if they can meet that price and you’ll come in right away. Then twiddle your thumbs and see if they call. If you prefer, accept their updated price if it is fair. Or take time to think about it. Don’t let them rush you.

  11. Shop around for financing. The best rate might not be from the dealer (but it might be). A car is a depreciating asset, not an investment, so personal finance best practices would say to either (a) pay cash if you can or (b) finance with the most money down possible, lowest interest rate possible, and the shortest payment term possible – usually cars are offered with 36 month, 48 month, or 60 month financing. Look for rates from: the dealer, your bank, other banks, and various auto loan sites.

  12. Explore other ways to pay. Check whether the car company has a credit card (like the Toyota Credit Card) that offers perks like 0% financing. Or consider using a cashback credit card. The dealer will probably let you put up to $2500 - $5000 on a credit card - that's a hefty amount of cashback or points! Whatever you put on the credit card, be sure to pay it off before the interest rate balloons.

  13. Check the Carfax. But don’t trust it entirely. FYI many dealers will provide you with a free Carfax. Consider using another site too like VinAudit.

  14. Take the car to an independent mechanic for an opinion. Don't trust anything the dealer says and be skeptical of the Carfax. The mechanic might find defects or evidence of accidents that weren't disclosed. If the mechanic finds any defects, and if you still want the car, go back and negotiate the price down.

  15. Shop around for an extended warranty. If you’re buying a certified pre-owned car, they will probably include a 12 month comprehensive warranty but will try to sell you what’s called a “wrap” which extends the warranty. It you want this warranty, you might not need to buy it from the dealer who sold you the car. For instance, if you’re buying a Toyota, you can call every Toyota dealer in your state to get quotes on this extended warranty. Bring your list of quotes to the meeting with the finance guy at the dealer on the day you buy the car. I guarantee they’ll be cheaper than what they’re going to offer you. They might even match the price.

  16. Be watchful of extras and fees. At closing, they will try to sell you all sorts of stuff like an extended warranty, vin etching, detailing, and other stupid stuff. Do your research so you know what’s being offered. Know that you can get most of it done later (you can even buy an extended warranty later) if you want to.

  17. Shop around for car insurance – try a big company with a reputation for discounts like Geico or Progressive, the standard AllState and State Farm, online brokers like Insurify, and a local neighborhood broker. See who comes back with the best rates. Car insurance rates can vary widely and your inertia staying with the same company year after year is costing you money. It’s in your best interest to shop around every year (or even multiple times a year). And pay the year up front if you can, you’ll save that way too. And check your insurance redundancies. Do you have AAA or a credit card that covers roadside assistance? Does your new car’s warranty include roadside assistance? Then take that extra fee for roadside coverage off your car insurance!

Happy Haggling! Good luck!



The owner of this site is not an investment advisor, financial planner, nor legal or tax professional and articles here are an opinion. The content on this site is intended to be educational and used for general informational purposes only. It is not intended to provide specific advice or recommendations for any individual. The owner of this sites assumes no liability for information provided above. The information may not be correct when applied to your specific situation. 

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