Car buying negotiation strategies

[VaSteve]

What are your car buying negotiation strategies?

- Do you tell the owner why your lowering your asking price?
- Do you just lowball and walk if they don't bite?
- What if you already had a PPI done?

I"m looking at a 944 that had a lot of maintenance done, and then sat for a while undriven. Some of the brand new stuff (brakes, tires) have basically shelf rotted and need to be replaced. It also needs a new timing belt. I have computed what the shop would charge to do this work, and what I could do it for in my garage. The shop would charge about $2500 which is half the asking price. I was planning on doing a lot of the work myself and saving the difference. So essentially, I wouldn't be negotiating down just for the hell of it.

I have not talked to him since the PPI this afternoon.

I know he is negotiable because he listed it in the local PCA magazine and actually couldn't recall what he'd listed it for.

I don't want the guy to feel cheated and shut down negotiations if I essentially offered him half what he was asking. However, he's the original owner (maybe attached to the car) and the things he listed (brakes, tires, belts) were selling points. So do I explain that it needs all this stuff and that's how I arrived at the price?

I lowballed the owner of my 911 (for no reason other than I knew he was desperate to sell) and we split the difference.

Any thoughts?

[Victor]

Hi There,

For starters, please don't lowball as a smack to the head in reply often offends.......I went through the most agonizing 6 months of my life when I decided to sell my 911. Can you tell? My next car was brand new so I just hunted around for the hungriest sales rep (not making his target) and waited untill the second last day of the quarter.

Do your research, be prepared to pay a fair price for a fair car and everyone will be happy.

[RANDY P]

Usually I try to do the best assessment I can, negotiate the purchase price based on the condition of the car overall - If the car needs no repair (usually less than $200) then I will buy.

Over $200 to repair and we're open to renegotiation - fortunately I haven't been so far off as to lose any PPI cash I've ever spent.

Before I throw my offer, I usually tell the seller what I see as potential issues, and compliment 'em if the car is in decent shape. Then I will ask if there's existing offers on the car, and I also know how long it's been there and contemplate if it's worth chasing the offers quoted. If it's worth chasing then I offer to purchase, and the haggling begins.

On the other hand, if it's an exceptional car, records, well maintained and what I want, I usually don't haggle and just pay the asking price. Not worth the extra agony trying to dicker and maybe losing out on a good car.

On a car lot, I usually don't even test drive until I find what I want, get preapproved at capitolone.com or a local credit union. Do research on what it's worth online and through the local autotrader, or here and then roll up to the dealer.

Walk on up, test drive the car, show 'em my preapproval and tell them I'm not gonna finance unless they beat my existing offer - once they see I can be bought then it's beating them to death to get the price I feel is fair based on research.

Never negotiate the trade until you determine the selling price of the new car, and always know where the market stands on both - never walk in without doing research. Always.

Extended warranties are negotiable, and if you're a slimeball you can offer to purchase one IF the dealer gives you a bigger discount on the car. "Tell you what, take off another $500 on the car, and I'll feel better about buying that warranty we talked about - I'm already over budget on this!"

Day after you drive off, of course cancel the warranty. Get your refund. You will no longer have any friends at that dealer anymore. Most dealers are hip to this trick though. Like I said, it's a slimeball move.

Never fall into the trap of haggling the price based on monthly payment. Study your preapproval and know where you're supposed to be on payments based on the price of the car. The dealer is quoting you a payment based on a ridiclously high interest rate. Reason being is if you assume that the payments are naturally that high, it's no longer necessary to discount the car and the extended warranty can be buried in there and you think you're getting a deal since that $4k extended warranty only cost you an additional $2 dollars a month.

rjp


rjp

[VaSteve]

I'm really looking for advice more on the basis of buying a used Porsche in cash from a private seller.

He advertised it for $5K with all the work done. Turns out it was done a couple of years ago and since it hasn't been driven the tires and brakes are definite replace items. The timing belt needs to be done as well. The shop (and tire store) would charge about $2500 for all the work and I could do it myself for $1600 (parts and tires).

I figure I have thrown $140 into a PPI and he has spent his time driving it to the shop so he's invested in it as well. I'm not lowballing just for sport. I have a rationale, the car needs a couple of things to be safe/pass inspection. I figure anyone PPI'ing the car after me would find the same problems (if they had 1/2 a brain).

[Rodeo]

I don't understand why the brakes would need to be re-done, just from the car sitting. And will tires really dry rot in 2 years?

Brake pads and tires should be somewhere around $750 I'd guess. Is a timing belt a $1,750 job?

Ok, sorry for all the questions. Anyway, assuming $1,600 is the DIY cost, I'd tell him that the PPI revealed $2,500 of work needed (true). Gauge his reaction. Go from there, with $1,600 in your mind as an accetable discount if indeed you like and want the car.

[Dave L]

5k seems steep but more details are needed, year, mileage etc.

With a price of 5000 and 2500 to bring it to driveable condition it definatly puts it on the high end. If he is the original owner he surely knows the cost of the waterpump timing belt service and I would hope he would price it right. I would let him know that the cars needs $2500 in service to put it right as you intend to keep it in as great a shape as he has. I dont think you need to offer $2500, just let him know that it needs $2500 in work and ask him what the best price he can give it to you for. Usually you end up half way.

I would put my money on you paying between $3500 and $3800.

[competentone]

If you're not stuck on getting this particular car, but are trying to find a really good deal from a motivated seller, then why not tell the seller something to the effect of, "Your asking price is not unreasonable; you can probably get what you're asking, but it may take some time to find the right buyer. I don't want to really haggle over the price; I'm just looking for a really good deal from a motivated seller -- I only have limited funds to spend on this project too -- so if you decide you want to just move the car immediately for a price substantially lower than what you're asking, please give me a call."

You may want to mention the price you want to pay (which, from your comments here, you seem to have already determined). What year 944 is it?

Whether or not you get the car will depend on the market and how well the seller knows the market, and how hungry the seller is to move the car and get the cash. If what you want to pay is way under market, you'll probably just be wasting your time doing what I suggest, but if what you want to pay is just a "really good deal" for you, the buyer, and the seller doesn't have unreasonable expectations about the value of his car, it will work.

[VaSteve]

The shop quoted me $1000 for a brake service. New rubber lines, pads and rotors. I could tell from the test drive that something wasn't right. I figured maybe the brakes needed to be bled. The rotors were all glazed over and so were the pads. I figured the parts on that were the heavy hitter: $600 (maybe I happened to pick out nicer cross drilled rotors ) Either way, I was going to use the shop's estimate in my negotatiations.

Belts are a $700 job, ~$140 for parts. Free loaner tools from a local guy for me to do it.

Tires.... The tires were Toyos. I want something I can drive on the track. You could look at the treads and tell that it was cracked (I didn't see this when I test drove it - shame on me for going when under the weather). The mechanic said they were unsuitable for the track, which is what I'm buying the car for. Owner admitted they were probably a little "square" from sitting.

Thanks for the advice.

FWIW: It's a high milage 1986 n/a 944, leakdown was great. New rod bearings, very dry engine, new control arms, clutch, radiator, (and a bunch of other stuff I'm forgetting).



Edit: Haha, competentone I was looking online at a car in Summervile SC I found on the web. Probably nicer than this one. Too bad I didn't know you were down there. Deal fell apart because the seller wasn't motivated enough to take the car over to the wrench for a PPI.

[RallyJon]

Doing a $500 repair to a car does not increase the value of that car by $500. Likewise a car for sale that needs a $500 repair does not lose $500 of value. Using that logic, most 928s that change hands would have the seller paying the buyer.

With an old, cheap used car the pros and cons have to be balanced to reach a value that is fair to buyer and seller.

leakdown was great. New rod bearings, very dry engine, new control arms, clutch, radiator, (and a bunch of other stuff I'm forgetting).

What if it didn't have those things? It's a double standard to deduct from the value by exactly what the problems you found cost to fix, but you don't give monetary credit for the work already done.

That said, be reasonable and most of all respectful, don't lowball and you'll probably get a good price. You're talking about a cheap car here. I know I wouldn't tolerate being insulted over a cheap car.

[Nathans_Dad]

#1 rule of car buying: The seller MIGHT have what you want (i.e. a good car), but you DEFINITELY have what he wants (i.e. $$$). All negotiations should be slanted in favor of the buyer...don't be afraid to walk. If it sells, then there are plenty more 944s out there...

[RallyJon]

That's a cliche. If the seller doesn't have what you want, you shouldn't even be talking. Should the seller waste time with people who MIGHT be interested? I know when I sell a car privately, I try to pre-qualify potential buyers for interest before I even agree to let them look at the car. Life it too short. Time is too valuable.

[kaisen]

I always have to laugh when I read how people negotiate. Who cares what they're asking? The car is worth what it is worth. Why would it matter how long they've been trying to sell the car, or how many offers the seller has had? If it's a really nice car, but $2000 over market value, do you just pay what they're asking? No, of course not. Pay market value, period. If it is NOT nice, but takes $2000 in repairs to get it into nice shape, do you offer them $2000 less than market value? Maybe, but usually an average car isn't going to bring all that much less than a nice car.

As you're finding, it doesn't take long to rack up $1000's at a shop. Be picky enough and I'm sure you could find $5000 in repairs to make the car perfect. Used cars aren't perfect.

I would think you are being really picky about the tires and brakes. The rotors may just need to be cleaned up. Might happen through agressive driving, may need to be turned on a brake lathe. Cheap either way. The tires, if they're only a couple years old, are safe for their intended use on the street, and should be fine with a few heat cycles. What if they were literally brand newPep Boys? Would you ask for a discount because they wouldn't work on the track? Is he selling it as a track car? The timing belt is legit, but he's not going to knock off $700 from a fair asking price just because it hasn't been done for a while. If it is way over service interval, maybe.

All I'm saying is that every car has its value. As a buyer or seller, it is your job to know the real transaction value of what you have. If other cars like yours are really bringing $4000, why ask or pay $5000? Would you negotiate if they were asking $3800 for the $4000 car just because no one has come to look at it yet? When I sell my cars I set a realistic price based on real market transaction prices and I do not negotiate. I disclose everything I know, and tell them it is what it is, and the price is the price. The buyers have been happy and it's fair all around.

Just my $.02

E

[kaisen]

Originally posted by RallyJon
Doing a $500 repair to a car does not increase the value of that car by $500. Likewise a car for sale that needs a $500 repair does not lose $500 of value. Using that logic, most 928s that change hands would have the seller paying the buyer.

RallyJon posted this as I was composing my response. We usually don't seem to think alike. But this is exactly the same point.

BTW, anyone who wants to pay me to take their '91 928GT with the blown motor can PM me

E

[VaSteve]

Originally posted by kaisen

I would think you are being really picky about the tires and brakes. The rotors may just need to be cleaned up. Might happen through agressive driving, may need to be turned on a brake lathe. Cheap either way. The tires, if they're only a couple years old, are safe for their intended use on the street, and should be fine with a few heat cycles. What if they were literally brand newPep Boys? Would you ask for a discount because they wouldn't work on the track? Is he selling it as a track car? The timing belt is legit, but he's not going to knock off $700 from a fair asking price just because it hasn't been done for a while. If it is way over service interval, maybe.

I don't think I'm being picky, but I do value your opinion. The seller advertised it in the local PCA magazine saying that all this work (including brakes and tires) has been done in the past 30K miles, so that was a major selling point for me. When things don't pan out as they were advertised (or he expected them to be) I think there's room for negotiation. I got the shop estimate and the DIY estimate so I would have a range.

I got a PPI so I'm serious about it and have felt him out about price softeness. Last guy I talked to said if I wanted a PPI, fine. But if there was any thing that needed to be done he wasn't negotiating price he just wouldn't sell it to me.

Previous car buying experience was limted to beating up dealers on price or lowballing motivated sellers from 5 hours away (911). This is new territory for me.

Thanks for the advice.

All I'm saying is that every car has its value. As a buyer or seller, it is your job to know the real transaction value of what you have. If other cars like yours are really bringing $4000, why ask or pay $5000? Would you negotiate if they were asking $3800 for the $4000 car just because no one has come to look at it yet? When I sell my cars I set a realistic price based on real market transaction prices and I do not negotiate. I disclose everything I know, and tell them it is what it is, and the price is the price. The buyers have been happy and it's fair all around

I think many sellers don't know what they have or what it's worth. This is an original owner that has taken the car all over the country with him on miltary moves. There is probably some nostalgia about it as well. I talked to another guy that is selling an 89 944. He bought it for $5000, put in $3000 immediately 8 years ago. Has been trying to unload it for about 2 years but is failing because of his inflated price. At least the seller of the car I PPI'ed is in the ball park.

That said, be reasonable and most of all respectful, don't lowball and you'll probably get a good price. You're talking about a cheap car here. I know I wouldn't tolerate being insulted over a cheap car.

I agree and that's why I'm asking.

[RANDY P]

Man, it's tough. Typically unless it's just a smoking deal right up front, it's best to find a car that requires less work and pay a fair price. $2500 isn't trivial.

Show him the estimate, and have him make the 1st offer.

[VaSteve]

Originally posted by Dave L

I would put my money on you paying between $3500 and $3800.

I told him what the mechanic found and how much it would cost. He came back with $3500. Done deal and I'll do most of the work myself.

Thanks for the advice all.

[aways]

People rarely advertise a car for what they think it's worth. They usually advertise it for about 10% above that, and expect to come down 10%. If it looks like a reasonable deal, offer them 10-15% less,... they shouldn't feel insulted... and they usually will accept the offer. My definition of "lowball" is offering more than 20% below what YOU think it's worth.

[RallyJon]

They usually advertise it for about 10% above that, and expect to come down 10%. If it looks like a reasonable deal, offer them 10-15% less

Perhaps you should inform the seller of your assumption before he says, "Well, thanks for coming over, I hope you find what you're looking for."