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HOW TO NEGOTIATE WITH A USED CAR DEALER

The most important thing to know about negotiating with used car dealers is that they will base their negotiable limits on their perception of you. If they see you as knowledgeable and shrewd, they will know they can not push you around. Likewise, if they perceive you as ignorant and wishy-washy, they will know they can charge you more for a car.

Used car dealers will always try to stretch your limits. If you are willing to pay $10,000 at 8.5% on a car listed for $11,000, they will offer you $10,500 at 9.5%. Know your limits. If your limits are being stretched, simply stand up, say no thank you, and walk out the door. If you buckle on one thing, the dealer will know they can push you around on everything.
Many dealers base their tactics on your ignorance. They will tell you nobody will finance a car that is 10 years old. They will tell you nobody will finance a used car for less than 7%. They will tell you nobody will finance a used car without a down payment. All of these statements are incorrect.
So, how do you become a knowledgeable and shrewd used car buyer? First, know what kind of car you want. Educate yourself on websites like edmunds.com and Kelly Blue Book's website kbb.com. Second, know what your credit score is by running your own credit report before you even start car shopping. The government will give you one free tri-bureau credit report each year at annualcreditreport.com. Third, find out what interest rates are currently available at local credit unions. This doesn't take much time because most credit unions will post their rates on their websites.
Now you are ready to start shopping. At this stage, remember that you are just looking and trying to make comparisons. Shop for cars online before visiting the actual lots. Why? Most dealers advertise the cars they have for sale on their own websites and on generic websites like cars.com and autotrader.com. You can search for exactly what you want online: sort the cars by price, by mileage, by year, by features, etc. Also, many car dealers offer lower prices online than on their lots. If you tell dealers you saw one of their cars listed for X amount online, they must honor that price.
When you are ready to physically visit different car lots, do not let each dealer run your credit. Each time your credit is run, your score goes down. A week or 2 of car shopping can drop your credit score10+ points. Bring the credit report that you printed from annualcreditreport.com

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