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How Much Will Dealers Come Down on a Used Car

How Much Will Dealers Come Down on a Used Car?

As a former used car dealer, I know firsthand that dealers can usually come down on used car pricing, but this will depend largely on on your negotiation tactics as well as specific circumstances present at the dealership.

So, how much can you negotiate on a used car?

Simple Answer:

On average, dealers can typically drop asking prices on used cars by 5-25%. The exact amount you can save will depend on a few factors, some of which you can control and others you cannot.

Important Fact: Everyone assumes that when a dealer says they are selling a car at a loss they are simply lying to you, and usually they are, but more often than you think, they arent.

Below we’ll discuss more specifically the factors that determine how much a dealer can come down on their price and how to spot them.

Key Takeaways

  • Research vehicle history and fair market pricing thoroughly before negotiating
  • Dealers typically knock at least 5% off, but 10-25% discounts are common
  • Focus negotiations strictly on vehicle price before financing or trade-ins
  • Leverage nearby dealer listings for lower pricing in negotiations
  • Paying cash can yield bigger discounts; consider private sellers too

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Factors That Determine Used Car Pricing

Several key components determine how dealers price cars what dealers will discount used cars down to:

FactorImpact on Price
Vehicle AgeNewer cars have higher prices; older cars depreciate faster
MileageHigher mileage lowers value; 100k+ miles see steep drops
ConditionPoor condition, body damage, mechanical issues bring prices down
Brand/ModelPopular brands hold value better; niche cars often discounted
Local DemandLow-demand cars discounted more to attract buyers
Time on LotThe longer a vehicle has been in a dealers inventory, the more likely they are to lower the price

Typical Dealership Pricing & Profits

Dealers make money by marking up the “wholesale” price they pay to acquire vehicles.

This markup covers overhead and nets profit. On a $15,000 used car, markup typically ranges from $3,750 (25%) to $6,750 (45%).

Understanding markup gives gives you leverage while negotiating discounts!

Dealers won’t share exact profit targets, but you can research wholesale pricing guides and use services like ours that get you very close to finding out what the dealer paid for the car.

Used Car Negotiation Tactics

Getting the best deal on a used car involves preparation and using effective negotiation strategies:

  • Open with a realistic offer 15-25% below asking price – This gives you room to negotiate up closer to market value and a fair price
  • Discuss vehicle price alone first – Don’t get distracted by financing or trade-in talks (Dealer strategy)
  • Use nearby dealer listings for leverage – Cite lower local prices on similar vehicles in negotiations
  • Make final “cash offer” to prompt discounts – Dealers like guaranteed cash sales because they take less time, and time is money at a dealership.
  • Walk away if your budget target isn’t met – This flips the urgency tactic back on to the dealer to call you back.

Remaining consistent and persistent with these proven tactics can yield significant savings off a dealer’s listed used car price.

Quick Tip: Check How Long Cars Have Been on the Lot

Leveraging extended time a used vehicle has sat at a dealer is an effective discount negotiation tactic.

Identify Stale Inventory

  • Review online records for original listing dates
  • Request exact on-lot arrival date from dealer
  • Look for vehicles unsold for 60+ days

Extended Availability Prompts Discounts

When making an offer, reference lengthy time on the lot and cite lower pricing found on comparable vehicles to start negotiations.

  • For example, a 9 month old used sedan priced at $22,000 has sat for over 70 days
  • Make firm offer of $18,500 citing:
    • Vehicle unmatched for over 2 months
    • Similar models priced below $20,000 locally

Taking advantage of stale availability motivates dealers to cut prices in order to move aging used inventory off the lot quickly. Time left languishing is major bargaining leverage.

Choosing Between Dealers and Private Sellers

Private party used car sales often allow for lower prices because private sellers don’t have overhead costs. Private sellers are also not typically trying to turn a profit and are more apt to need to get the car sold sooner rather than later.

However, benefits like financing options, warranties, lemon law protection, and professional certification favor dealer purchases.

Thorough vehicle history checks are essential when buying private party. Carefully weigh risks and benefits when choosing between dealers vs private sellers.

Relevant Article: Carfax vs. Autocheck

Paying Cash Can Help Negotiations

Making an attractive cash offer prompts many dealers to provide bigger discounts – especially on cars languishing on their lot.

Time your cash offer strategically after negotiating vehicle pricing down. Cash represents guaranteed profit for dealers rather than waiting around for financing approvals.

However, there are instances these days where dealers make their money on financing while selling cars at lower profit margins.

Paying cash also boosts buyer power to negotiate the out-the-door price lower. Just don’t reveal intention to pay cash too early in negotiations.

Getting the Best Possible Used Car Deal

Doing your pricing research, focusing negotiations strictly on vehicle cost first, employing proven tactics that utilize market factors, and understanding dealer pricing procedures will put you in prime position to knock thousands off a used car’s asking price. Consistency, preparation, and persistence pay off.

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Steve Momot - Author

Steve Momot - Author

Steve, a seasoned expert in the automotive industry, formerly held a car dealer license in Florida. With extensive experience spanning across car trading and mechanical work, he founded Autohitch. His mission? To guide both buyers and sellers through the intricate maze of car purchasing, ensuring a seamless and informed experience. Outside of the automotive world, Steve has a passion for fishing and capturing the beauty of nature through photography.


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