Why Haggling for Your Next Car Really Pays

Almost half of all American adults currently drive a car they bought used. And one-third of all used-car buyers considered getting a new car but ended up with a used one. Given the durability and reliability of many cars, buying used is becoming a better bet than it once was.

Consumer Reports is a strong believer that buying a relatively recent used car, one in sound mechanical condition and equipped with most of the latest safety and connectivity features, is the best way to get the most for your money.

Our survey of 1,006 Americans who purchased a used car from model year 2000 or later during the past five years shows that—just as when buying new—there’s quite a bit of flexibility when it comes to price.

Those who used the asking price as a starting-off point for negotiations often ended up with a lower purchase price, whether buying from a franchised new-car dealer, an independent used-car dealer, or a private party.

In our survey, 70 percent of used-car buyers haggled over the price, succeeding in getting a better deal 83 percent of the time. And the reported savings for being a savvy negotiator were impressive: The median was $900, or 8 percent less than the asking price.

So what’s the most successful haggling strategy? Turns out it’s the straightforward approach—simply asking for a better price. It worked for 68 percent of successful negotiators. Other tactics included sharing with the seller the value of similar cars researched online or threatening to walk away, which worked for 48 percent and 28 percent of successful hagglers, respectively.

How People Shop

Almost half of all used-car buyers check out Kelley Blue Book or Black Book for a vehicle’s estimated value before shelling out cash. A similar number of respondents said they also researched a car’s history on Carfax or AutoCheck, although that practice dropped considerably for those buying from private-party buyers, with just 25 percent doing so.

Regardless of where you buy a car, Consumer Reports strongly encourages you to have it inspected by a certified mechanic to ensure there are no nasty surprises. Yet only 41 percent of surveyed shoppers who bought from a private party or a used-car dealer had their car checked out by a mechanic, and just 36 percent who bought from a new-car dealership did so. That was despite concerns voiced by shoppers about “unknowingly buying a car that was in an accident” or from “untrustworthy salespeople.”

One final cautionary note when buying from a private party: Find somewhere public to meet. There are many stories on the Internet about people being robbed during a deal. In our survey, at least one-third of private-party buyers weren’t familiar with the sellers, but only about one-fifth met up with one at a public location. More than half went to the seller’s home; 16 percent said they had the car brought to their home.

Consumer Reports says it’s preferable to meet on neutral turf, both for safety reasons and to blunt any “home-field advantage” sellers may have.

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How to Pick the Best Way to Pay

When it comes to buying a used car, consumer satisfaction with the deal varies greatly depending on whether the buyer financed the car or paid cash in full.

About 70 percent of used cars purchased at a franchised new or independent used-car dealership are financed. By comparison, less than 20 percent of private-party transactions are financed.

Those who financed a car they acquired at a used-car dealership were the least satisfied with the deal they got. And they’re the only group for whom less than half were highly satisfied with the price they ended up paying.

Editor's Note: This article also appeared in the June 2016 issue of Consumer Reports magazine.

More from Consumer Reports:
5 least reliable cars from Consumer Reports' survey
Best Used Cars for $25,000 and Less
Which Car Brands make the Best Vehicles

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