Getting Started

• Identify the car in which you are interested. Make note of the make, model, year, mileage, and special features the car offers. Be specific and accurate. For example, there is a significant difference in value between a 2008 Chevrolet Impala LT as compared to a 2008 Chevrolet Impala LTZ.
  
  

Determine the Car's Blue Book Value

• To find the fair market value of the car, go to www.kbb.com (Kelley Blue Book). Click on Search by: make, model, and year under used cars. Select the appropriate year, make, and model from the pull-down menus, then click on "Go". There are four categories of values you can search: Trade-In Value, Private Party Value, Suggested Retail Value, and Certified Pre-Owned Value. Each of these four categories represents an estimated value of the vehicle of which you need to make note.
  
  

Research Financing Options

• Contact local banks and credit unions to learn about financing options available. If financing through a local bank or credit union is more favorable than used car financing at the dealership, you will need to understand this before you begin negotiations. You can typically use the financing of the vehicle as a point of leverage in the price negotiation. But be sure that doing so is to your advantage.
  
  

Ask for the Carfax

• Many dealerships will provide you with a copy of the Carfax, showing the vehicle's purchase, maintenance and repair history. If the dealership won't provide a Carfax you can print your own online at www.Carfax.com. Be sure to have the car's VIN number (Vehicle Identification Number) available. While the Carfax may not show every accident or repair, it is a good tool to give you background on the car.
  
  

Inspection

• Have the car inspected by an independent shop. For as little as $50 to $75 an independent mechanic can provide you with either an early warning or peace of mind about the car you are purchasing. If the mechanic reports required maintenance or repairs, it will help you to more accurately assess the condition of the car to determine a true fair market value.
  
  

Calculate the Adjusted Value of the Car

• If purchasing from an individual, begin by using the private party value from kbb.com. If purchasing from a dealership, use the retail value or certified pre-owned value from kbb.com. Adjust that value based on the condition of the car, cost of required maintenance, any blemishes in the vehicle's history, and repairs as noted in the inspection. This calculated value represents fair price you should pay for the car. When negotiating have this information accessible. If you reach an impasse with the seller, that information could be helpful in explaining and overcoming the gap.
  
  

Other Considerations

• There are two other considerations to bear in mind when negotiating for a used car. The first is the value of financing the car through the seller. As noted earlier, understanding what rate and conditions you can receive from local banks and credit unions gives you a good foundation from which to work. If the seller offers you a better financing rate than what is available elsewhere, this translates to lower interest cost and a lower payment. If you can make a substantial down payment, ask the seller if that will allow them to reduce your finance rate. A second option to consider is asking the seller to provide a warranty. A warranty provides the buyer with value by covering any defects or issues that arise after the purchase. A warranty also demonstrates the seller's confidence in the vehicle. Financing and warranty are two other pieces of the deal that provide value to you, the buyer, that you can and should negotiate.