The Art of the Deal: How to Haggle for a Used Car

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It's also helpful to look for stale cars that have been sitting on the lot for a long time. The dealership likely views them as semi-failures and wants them out the door.

Many dealerships now provide a free Carfax vehicle history report for any used car you look at. Both dealerships we visited did, and I noticed that the Carfax report had a handy line showing when the vehicle had come into that dealership. At the second dealership, the Odyssey we wanted had been there 42 days.

So, hoping this gave us some leverage, I said to Reed and the manager: "Hey Phil, I notice here that they've had it for more than a month. More than a month. So I'm wondering, do you want to sell this vehicle and get it out of here?"

The Final Price

After some more back and forth, the offer on the table was now $21,500. This time, the manager's manager came over and we were sure he was going to haggle with us some more.

But then, to our surprise and delight, he said: "I think that's a fair deal for you and so with that said, could we make a deal right here?"

Reed smiled and replied, "Absolutely," and that was that. We were thrilled with the price, impressed with the vehicle and pleased with our negotiating experience.

"People feel incredibly empowered when they negotiate on their own behalf," Reed said. "And they're always amazed and blown away with how much they can accomplish with a few simple things."

The Odyssey's sticker price was $24,988. We got it for $21,500 -- a savings of $3,500. And even when taxes and fees were added, the total "out the door" price was $23,924, well below the $25,000 limit Edmunds had given Phil.

Assessing the Deal

Phil came in more than $1,000 under budget for his company, but was our purchase a good deal in general?

Edmunds offers a unique tool called "True Market Value" or "TMV" that gave us some perspective. Edmunds' TMV is the average price that consumers are currently paying for a certain type of vehicle.

Sample car dealerships around the country report their selling prices to Edmunds, which then runs a formula that averages the raw data. That means TMV averages include people who paid too much and those who did very well in their negotiations, plus those in the middle.

Reed's goal was to beat the TMV number and be "better than average."

The TMV for a Certified 2007 Honda EXL with 40,000 miles on it was $22,515. The price Phil had had in mind to pay was $21,500 and that is exactly what came to pass. He was better than average by $1,015.

"We got a very good deal on this car," he said. "I wouldn't call it a screaming deal, but it's a very good deal."

A Backup Plan

If you are close to a price you think is fair, but just can't get the dealership to come down any more, here's another strategy: Instead of trying to get the car for less money, you can try to get the money to buy more car -- by asking for extras like new floor mats or tires, a souped up stereo or an upgraded warranty. Make sure the extras are things you truly want and need.

Negotiating Without Getting in Their Face

If, after reading all of this advice, you still can't picture yourself marching into a car dealership and doing a bit of acting in order to pare down the price of a used car, then Internet buying may be for you.

You can still get the benefit of negotiating the price, but you will be doing so online or by phone, a less in-your-face approach that some people prefer. Here is an excellent Edmunds article on how to go about it.

Need advice on how to buy a new car? Click here.

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