Tips for Buying a USED vehicle

I know that most people don't have the means to buy a brand new car. I didn't. Or, rather, I realized from my years in the business that a used car is a much better value. When you drive a new car off the lot, the value drops by at least 15%, and that figure is probably conservative.

Take your basic Chevrolet Malibu. A 2010 Chevrolet Malibu LS will have an MSRP of $22,815. If you read my post about new car negotiating, you know that I don't charge anyone sticker on a new car because it isn't in my best interests to do so. So, that $22,815 price goes down to $21,900 or thereabouts. Currently, there are about $3,000 in rebates available on the Malibu. You can deduct that right from the $21,900. Now we're at $18,900. That means that if we took in your Malibu on trade a week after you bought it, we wouldn't be realistically able to ask more than $17,000 for it because a new one is within $2,000. If we can only ask $17,000 for it, we can only give you $15,000 for it to make selling it worth our time.

If you made it through that number-laden paragraph, you probably figured out a couple things. First, you probably know that my earlier estimate of 15% is very conservative. Second, you know that a used car is a much better deal; in that example, a used Malibu is a couple grand less than a new one.

So how do you go about negotiating on a used car? Read on.

Know what car you are looking for, as narrowly as possible.
It's a big help to yourself and your salesperson if you know what you're looking for. Think about it, narrow your search as much as possible, and go a dealer that has what you're looking for. Easy stuff.

Check NADA and Kelley Blue Book values.
Yes. Check BOTH of them. Either reference is 30-90 days behind the market, so here's your strategy: if you plan on financing, use Kelley to keep the dealer honest on the price, and then use NADA to make sure that the price is within financing range. If you don't plan on putting any money down, then you probably will have to be within 110% of the NADA maximum trade-in value to finance the vehicle.

Test drive the car. 
You must, I repeat, MUST test drive a used car before you buy it. In fact, I will refuse to sell you a used car that you haven't driven. On the test drive, you not only can alleviate any concerns you have about the way the car fits you, but you can check if there are any problems with the car before you waste my day negotiating on it.

Notify me of any trade.
This is a pet peeve of mine, and that's why it appears on more than one "Tips" post. Tell me if you have a trade. It's that simple.

Realize it's a used car.
This probably sounds self-explanatory, but I can't even detail the number of people that come in looking for a used car and subsequently pick all of my used cars apart. IT'S A USED CAR. There are going to be scratches, nicks, and wear on the seat. A reputable dealer will recondition the cars, but there are going to be signs of wear. If you want a new car, buy one.

Financing is more complicated.
There won't be any sweetheart 0% financing deals, and when you finance a used car, you have to worry about bank values versus deal figures, loan lengths (older cars don't get extended loan terms), and (slightly) higher interest rates. Financing a used car can take longer than a new car, because all of those values have to be analyzed.

Don't take the first offer, unless you got the price off of the Internet.
My first offer has the most profit for the dealership. Most dealerships, however take all the profit out of the deal when they post the vehicle on the Internet. At least send me back in to get a little off the price for you. But remember, if you're sending me back in there, you are making a commitment to purchase the car if the figures were agreeable.

If you see a price on the Internet, bring in a print-out of the price. 
Lot pricing will replace Internet pricing if you don't. There's no way for us to verify what you saw on the Internet.

Don't hammer me to a nothing deal and expect me to fix everything.
If you do, I won't have the money or the inclination to fix anything that you want fixed.