Whether you buy from a private owner or a dealer, one of the most important pieces of information you can have is the current wholesale price of the car in your area of the country. One source of auto-price information is the car loan department of your bank. They usually have d1 the latest price books and possibly even auction reports that show T, hat various makes are bringing on the auction market.
Book Prices
The industry uses any of several books as price guides: NADA Official --Used Car Guide, National Auto Research Black Book, Kelley Blue Book Auto Market Report, and Galves Auto Price List. These books purport to reflect the average wholesale prices that various cars are bringing across the country. The only problem is that they don't agree. Compare the suggested wholesale prices for a Chevrolet four-door Lurnina from the same month:
Kelley Blue Book: $7,500 (tends to reflect West Coast prices)
NADA: $6,750 (combination of auction and dealer reports)
Black Book: $5,650 to $8,850 (reports from dealer auction sales)
Consumer Price Books
Frequently you will find used-car price books on your newsstand. The figures in these books provide a general range, but because they cannot account for the myriad factors that impact the costs that a dealer has in a car, they may not present a true picture of any given car's "real" price.
Getting the Price That Matters
If you're buying a used car from a dealer, the key to a good deal lies in discovering how much money he has invested in the car. In other words:
• What did he pay the previous owner?
• How much has he spent on repairs and reconditioning?
• Does he have interest and miscellaneous charges that have to be paid?
Obviously, no dealer is going to tell you what he's got in the car. Yes, in some circumstances he might claim to be giving you the number, but rest assured it will be inflated. Here's a ploy that will often help you uncover this important information. Walk onto a lot and tell the salesperson that you'd just like to look around. Most salespeople will leave you alone because you've automatically disqualified yourself as a "buyer today." When you spot a car you like, copy down all of the information you can about that car:
"Offer to Sell Mom Their Car!"
You read that correctly. The ploy is to call the dealer and pretend to be someone who wants to sell a car exactly like the one that they have on the lot. To throw them off, you should change the color and take off 100 miles. Otherwise, the "car" you're offering to sell should be the same. Here's an example of how your conversation might go:
You: Hello, my name is (make up one) and I'm looking to sell my (fill in the year, make, and model of the car). I had planned to try to sell it through the paper, but I haven't got time. I've got to sell it quick. We're moving to and I won't be able to take it with me. (Or I need the money to pay for the move. Or I need the money for .)
BUYER: What are you looking to get? (They will always ask you this to find out if you are over- or underestimating its value.) YoU: I don't know. I don't even know what it's worth. But I've got to sell. I know you'll want to look at it before you commit, but it would sure help if you could give me a ballpark figure. (To encourage them to quote you a figure you might want to add): For all I know it may not even be worth selling.
BUYER: What's it got on it?
You: (In a conversational way you read off all the features that you've noted on your fact sheet.)
BUYER: (At this point he'll consult, his books or quote you a figure based o72 what he assumes is a price below the true wholesale value. Sometimes it can be 15 to 20 percent below ... or more.)
You: (No matter what figure he quotes you respond by saying): "That seems low to me. When I bring this car in, you'll see that it's really clean. I mean, this is the kind of car that a lot of people are looking for. You won't have it on your lot for more than two days." (The more naive you sound, the better.) BUYER: (Because you are now in the role of a "seller" and not a "buyer, " the used-car person is going to try to "down sell" the value of your car. He may concede that he would come up a little bit on the price, but might also point out,): Listen, I've got a car almost like yours sitting on my lot that I paid $ for, and it's been sitting there for two months. (Bingo! Now you know where to start your bidding.)
By the way, if you don't get a price from the used-car dealership offering the target car, there is nothing preventing you from calling one or two others. Most astute used-car buyers have a very good sense of the market, and their quote on your make-believe car will help provide a reasonable estimate of the true wholesale value of the car in your area.
Using the Price, lnformation
If this tactic works-and it has for the author-you now have a pretty good idea of what he paid for the car on the lot. Now you're ready to go back to the dealer.
"I'm looking for a year-old (make and model). "
When the salesperson leads you to the target car, make him go through the entire presentation. You should drive it and then subject it to all the inspections and tests outlined in this segment-including the professional mechanic inspection. Once you're satisfied that this is the car you want to buy, offer the salesperson a couple hundred dollars less than the number the dealership's used-car buyer offered you.
Be prepared for a good deal of groaning and "can't sell it for that" reactions. Assuming you want the car and knowing, as you do, that the dealer can probably get your price from a wholesaler or at auction, up your offer to a couple hundred over the price you were quoted and don't budge. (If you're the type of person who really enjoys a negotia¬tion, start below the price they quoted. When you budge, do so very slowly. Keep in mind that, eventually, you will probably have to offer an amount above the wholesale price. Also, keep in mind that if you've got your heart set on a one-of-a-kind car that is really hot, this tactic won't work. Remember, demand drives the price.) Assuming that there are any number of similar cars available at other lots in the area, this tactic should eventually bear results. As they try to "up" your bid, just keep pointing out that:What Car Dealers Won't Tell You Determining the True Wholesale, Value of a Private Seller’s Car
If you're buying from a private owner, you'll want to know the true wholesale value of the car. Here's a tactic that has worked for us. After you've performed the inspection outlined in this segment, and before you go to a mechanic, ask the seller if you can take the car for a drive--alone. Leave your car as ransom.
Take the car to the nearest used-car dealer and tell them you'd
1. You are ready to buy today.
2. You have your checkbook with you.
3. You would like to buy from this dealer, but you know there are a lot more cars out there and you will shop other lots if necessary.
Determining the True Wholesale, Value of a Private Seller’s Car
If you're buying from a private owner, you'll want to know the true wholesale value of the car. Here's a tactic that has worked for us. After you've performed the inspection outlined in this segment, and before you go to a mechanic, ask the seller if you can take the car for a drive--alone. Leave your car as ransom.
Take the car to the nearest used-car dealer and tell them you'd like to sell the car. Use the same tactic as we outlined for the phone inquiry. If you're nervous about seeming not to know as much as a real owner would about the car, tell the used-car dealer that you're selling the car for your niece and that you agreed to get some idea of what it was worth. If you have time, make at least two stops-one at a dealership that sells the same make.The other stop should be at a non-franchise used-car dealer. His quote will help you establish the local market value. Frequently a used-car dealer will be able to spot frame damage or other problems that you might not have seen or have overlooked.
Recently, a friend of the author's was instructed to do the above and discovered that the wholesale price was actually $4,800 below the asking price because the car had been in an accident and suffered frame damage.Once you know the wholesale value of a private seller's car, you can adjust your negotiation strategy accordingly. More on this later.
