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I've negotiated on and bought used cars in the past, but that was usually just me negotiating on the spot and what I see in the car, without having done a ton of research ahead of time.
I understand a lot of people use the Edmunds True Market Value tool to negotiate on used cars, and I had a couple of questions.
I'm looking at a used car right now that is listed at $8,000. When I look the car up on Edmunds, and put in all the specific information, including location, mileage, color, features, year, etc. etc. it shows me a True Market Value from the dealership at $6400.
Now I know they say the ideal strategy is to come in a little bit below true market value and eventually negotiate up to slightly below or right at TMV.
To me, this seems like the difference between the sticker price and the TMV is quite large, right?
So if I wanted to come in below TMV and negotiate up to TMV, I would have to start at something like $5,600!? Doesn't that seem like a huge gap between $5,600 and $8,000?
Would they even take an offer like that seriously, even though the website like Edmunds says it's the fair area to drop an offer? Even if the market value of the car is actually $6,400, it just seems like too big of a gap between $5,600ish and their list price in order for us to take each other seriously during negotiations...
Does anyone have any experience using TMV to negotiate, especially if there's such a big gap between TMV and the list price?
I've negotiated on and bought used cars in the past, but that was usually just me negotiating on the spot and what I see in the car, without having done a ton of research ahead of time.
I understand a lot of people use the Edmunds True Market Value tool to negotiate on used cars, and I had a couple of questions.
I'm looking at a used car right now that is listed at $8,000. When I look the car up on Edmunds, and put in all the specific information, including location, mileage, color, features, year, etc. etc. it shows me a True Market Value from the dealership at $6400.
Now I know they say the ideal strategy is to come in a little bit below true market value and eventually negotiate up to slightly below or right at TMV.
To me, this seems like the difference between the sticker price and the TMV is quite large, right?
So if I wanted to come in below TMV and negotiate up to TMV, I would have to start at something like $5,600!? Doesn't that seem like a huge gap between $5,600 and $8,000?
Would they even take an offer like that seriously, even though the website like Edmunds says it's the fair area to drop an offer? Even if the market value of the car is actually $6,400, it just seems like too big of a gap between $5,600ish and their list price in order for us to take each other seriously during negotiations...
Does anyone have any experience using TMV to negotiate, especially if there's such a big gap between TMV and the list price?
Thanks!
Remember, never, ever get emotional about a purchase. It's business. Always be prepared to walk. You haven't done your job unless they are battling. Edmunds, unlike KBB, is a more accurate, albeit not the same as the Hearst Publications dealers use (Black Book). They are closer.
KBB is frankly, for idiots and people who like to pay retail. It's a tool to reassure the buyer that they won't lose too much money in some vane attempt to convince them their car is worth more than any other similar model made that year....sad....it's right up there where they think their kid is always better than yours.....laughable when you research their ask price....Whenever I see someone who says "KBB" value says......I try to educate them on Edmunds and if need be, black books (THE bible of used vehicles). Sometimes they listen, often times they don't.
it's right up there with "J.D. Power and Associates rates this the highest satisfaction for the first 90 minutes of ownership"....they did that for the Buick Enclave and Oldsmobile whatever for years...total bust........Matthew McConaughey's recent Lincoln commercial....they've been blowing oxygen up this dying model line for years....junk....don't believe it's changed just because he's done a commercial about it....good for Limo drivers and that's about it.
Lesson to buyers and sellers. Your vehicle is worth EXACTLY what it goes for when you say "sold" and the buyer says "buy". NOT a penny more, or less. Tomorrow you may have gotten more. Tomorrow you may have gotten less. Usually, transactions favor the BUYER as the owner WANTS to get rid of the vehicle for some reason. The seller is inherently at a disadvantage. The buyer doesn't have to buy squat and if they have done their homework, has found 3 or 4 suitable alternatives whereby the seller only has their vehicle. Flaws and all.
People tend to believe their cars are worth more than they are when they want to sell. 2 weeks of people calling only not to show up usually sours them enough to trade and therefore, take another beating. And the beating on trade is a real thrashing. Look for them on Craigslist until they become "stale"....2-4 weeks....if they are still asking lunatic prices, save the gas and time. There are plenty of folks who just want an old used car to disappear. Do not believe you owe the friendly dealership any more than you would a private owner. Besides, you are paying for their overhead so be forewarned.
When you use Edmunds appraisals, go at it like a broker. Don't start adding all the "extras" as dealers rarely do. The condition and mileage, in that order, are THE most important. Don't say or believe in "highway miles"....miles, are miles. And they greatly affect the vehicles value. period.
Fact: Used cars make more for dealers than new ones typically. Where do you think they can haggle the most???
Color matters as well. Cooler (temp) colors tend to do well....Blacks and Charcoal are considered "deducts" as they are a real pain the assets to restore the luster and remove the swirls as most have others detail their cars over time. No crime in that, just realize it. However, there are some (usually young) who just got to have a black car....that and blondes that typically use them as accessories....they tend to buy White, Red, Black, and Silver in that order....it complements them and therefore, that's what they buy. It's as good a reason as any other.
Anyway, when you see the model, check the miles and condition....most dealers will give "Average" even though YOU think it's "Excellent". For the record, Excellent only applies to super low mileage and cars where no one has so much as sat in the back seat and the car is literally pristine. Impeccable service records, etc.... Rare. Good is about good a rating as any used car gets and it has to be lower mileage and in overall great shape....no door dings, perfect interior, no sagging leather, non-smoker, carpet mats are clean, etc.....Average is well, what you see 80% of the time. Get ready.
Check tires, brakes if you can see the pads, engine condition (leaks), smoke? AC for 10 minutes...is it sputtering? Transmission...how smooth? Bucking?, Interior odors....if it smells, it won't sell....maintenance records? Any available? Fluids, how dirty? Burnt smelling oils? Interior shape, LOOK at it closely...check in and round the seats.....look in the console, look in the glovebox. Lipstick smeared anywear? If so, consider the maintenance not kept up...women, for whatever reason, tend to let it go. They just do. Their neglect is your cost later....Trunk...check it for leaks, odors, stains.....paint..any mismatch (carfax)? doors, trunk, hood, align? Power windows that grind s l o w l y up and down? A lot of common sense here but, you would be amazed at what people let go....
As far as adding "ABS, 49 airbags, AM/FM/Casette/CD/MP3/Blaupunkt 300 speakers with subwoofer...blah blah blah....nada, zip, just counts as a "stereo". Any do dads that "dress up the interior" are serious, serious errors. DON'T do it and deduct if you see a car with one. Fuzzy Dice have no place in the car world.
Leather can be a real deduct. Be careful. Most domestic leathers are actually "pleather" a kind of vinyl impregnated fabric that belongs in the 70's, wears poorly, and will really show age quickly. Cloth interiors are usually easy to restore and wear uniformly.
Another secret about leather. It's like Vinyl. It's hot as heck in the summer and feezes your assets off in the winter. Heated and cooled seats are fine 10-15 minutes into your ride, bake away. But, when new "they look nice" so somehow the consumer is bamboozled into this often fleeting add on.
Take the Average book, add MAYBE $200-$300 if it's really, really loaded (sunroof, park assist, upgraded stereo). Let the private owner howl at the moon as there is someone else with the exact same model begging for it to go away.
TMV is a hoax. TMV means a lot to a lot of people. Try my term; RMV.....Real Market Value....the price it ultimately sells for based on your competent negotiation.....THAT's the ONLY number that counts...don't buy into TMV from anyone....that's Edmunds BJ back to the advertisers/manufacturers in their attempts to help the dealers.
It's mortal combat. Deal smartly. KNOW what the car is really worth BEFORE you arrive and always, always remember, cars are DEPRECIATING ASSETS (Ferrari and Lamborghini notwithstanding), not appreciating assets. What's worth 6K today will be worth 5.5K next month? Relax, when you are buying the world can be your oyster.
Last edited by Caleb Longstreet; 10-27-2014 at 12:01 PM..
Dealers often ask unreasonable prices. They hope somone will come along susceptible to their sales tactics, or who has not done their research, but just likes the vehicle. Sometimes one can negotiate a reasonable price from a dealer, because the dealer know what the vehicle is actually worth and might sell it for only slightly over the actual value. They will always make a substantial profit to cover their overhead and profit needs. Figure on a mark up of $2000 to $5000 buying from a used vehicle dealer. Sometimes they will not negotiate. They can always just sell a vehicle for a reasonable price later if they fail in an attempt at an unreasonable price. Generally they will hold the vehicle rather than sell it for a reasonable price.
Individuals often get mislead by dealer asking prices. The see the vehicle is worth less, but then see huge dealer asking prices and dig in their heels at a price slightly lower than the dealer price. Often they need to be 50% or more lower than the dealer price but they do not realize that and you will never make a good deal with them.
Some individuals know the realistic value of their vehicles. Most start somewhat higher than that and actually believe they should get a higher than average price because they think their particular vehicle is special. Eventually they become reasonable. Some are just wanting to get rid of the vehicle at a fair price with as little hassle as possible. Those are the sellers you are looking for. They will often negotiate a bit below average price in order to get the deal done. Those are the hardest sellers to find.
I always negotiate from wholesale price, up when I buy used from a dealer. I don't care how much the dealer asking price is and certainly don't consider it as a starting point.
Does anyone have any experience using TMV to negotiate, especially if there's such a big gap between TMV and the list price?
Thanks!
Really depends on how long that car has sat on the lot, I can easily see a dealer knocking down to TMV but there is so much factoring into it. For example some car models are just hard to find used so you might have less leverage. At the end of the day you should feel comfortable paying whatever you think is a fair price based on how badly you want the car. You can always ask, get denied and come back 2 weeks later and see if it's still there and try again
Edmunds, KBB and NADA all vary a lot on supposed value of a used vehicle. I consider KBB high and Edmunds low on pricing when I sell a vehicle and try for a middle price. I have yet to get a KBB price when selling a vehicle and have never bought a vehicle at Edmunds price.
I really don't understand why there is such a variance with blue book prices.
I always negotiate from wholesale price, up when I buy used from a dealer. I don't care how much the dealer asking price is and certainly don't consider it as a starting point.
Where do you find wholesale pricing on a used car?
Edmunds, KBB and NADA all vary a lot on supposed value of a used vehicle. I consider KBB high and Edmunds low on pricing when I sell a vehicle and try for a middle price. I have yet to get a KBB price when selling a vehicle and have never bought a vehicle at Edmunds price.
I really don't understand why there is such a variance with blue book prices.
Jasper Hobbs
This. In my opinion, an average of the Edmunds and KBB prices is a good deal, generally.
I don't think that's too big of a price difference. If it's overpriced then it's overpriced, period. The dealer is just hoping some fool will walk in and buy it. If you're not attached to the car then watch it. I bet it will drop to $7500 this week, then $7000 next week, then $6500 the week after that, and so forth until it sells.
6500+2903=8923 divided by 2 =$4460 STARTING POINT PERHAPS WORK UP TO $5,100
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