So a friend of mine is looking at buying a used car. He’s looking at the Budget Used Car Sales, which apparently sells off cars which were formerly Budget Rental or leased. We were discussing how to guesstimate one’s initial counteroffer on a car. Say for example, he’s looking at an '08 Mazda 5, and the listed price is 20K. (I’m using this as an example, I think he’s looking at a Mazda 3, but the math is slightly harder at 18K).
Given the list is 20K, and he’s not yet talking trade-in, should he say “I’ll give you 16K” (80% of listed), or 18K (90%), or 19K (95%) or what? As a rule of thumb, what percentage of the listed used car price should you give as your initial bargaining position?
Listed? By whom? If you mean that’s the asking price, then go to Kelley Blue Book or Edmunds or NADA and look up the car. You’ll get a trade-in price (low), a private sale price, and a dealer retail price (high). Edmunds will also give you a “certified pre-owned” price. If the dealer is asking significantly more than the retail price, start equally low; if he’s asking close to the retail price, you might want to push for the private sale price. I assure you that the dealer knows what the car is worth.
If you mean “that’s the price listed by KBB,” then your negotiating position will depend on his asking price.
Look at NADA if you want to know what this car is actually selling for. NADA tracks transaction prices.
I don’t know how Budget prices their cars, but many dealers are moving to a fixed (low) price stated in the window, with very little negotiation room.
On a 20K car they might have a few hundred dollars of room to move. Offer them 2K less and the answer will be good luck finding one for that price.
Use NADA, use NADA, use NADA. That is the number that people in auto sales use. Kelley Blue Book is frequently quite far off. (Which is why sales people will sometimes quote it. But that’s a sales trick.)
Once you quote the NADA price to a salesman, the negotiations will soon end one way or another.
If the actual seller is Budget, unless their policy has changed, they do not negotiate the prices of their used inventory. The ex and I bought a used 97 Ford Taurus from Budget in 2000, the price was set in stone and they would only offer wholesale value of the trade in, a 93 Chevy Corsica. The price was extremely fair, it was about a $1000 less than the same cars were selling for at other dealers.
First offer insanely low compared to asking price. Seller shakes head. You ask the lowest he can go. You shake your head. Give some ground, he gives ground, you reach a stalemate without agreeing. You say “Hmm we are still 1500 apart hmm” and you just stand there looking dumb until HE says lets split the diff. Then you say “Hmm we are still 750 apart hmm let’s split the diff.”
Of course any real car dealer knows all about that ruse…
Unfortunately, here in Canada the KBB, Edmunds and NADA don’t seem to exist. I ought to have indicated my location in the OP - Sorry. I forgot that I was now a placeless guest, instead of a mighty member.
There is something claiming to be the Canadian Red Book, but I’m not sure what it actually is.