Purchasing a used car, whether it's an American classic, like a pre-owned Ford car, or a foreign luxury car, like a BMW, is an excellent way to get exactly the car you want—but with major savings. This is because new cars begin losing value as soon as they drive off the lot. By opting for a car that is as little as one year old, you can purchase without the huge markup that is typically added to new cars. The following are few more strategies you can use to save on your pre-owned car purchase.
#1: Use dealer financing
Many people mistakenly believe that cash will get them a better deal at a dealership. While this may be true with a private seller, bringing cash or even your own outside financing to the dealership can actually hurt the deal. This is because some dealers get a kickback from the in-house financing options, called a dealer reserve. There are two ways to handle this. One is to not disclose you are paying cash until the deal has already been hammered out. The other is to accept dealer financing after ensuring there are no fees or penalties for an early pay-off, and then to pay it off quickly within the interest grace period.
#2: Educate yourself on the extras
You will likely be offered multiple service options, from warranties to custom tinting packages. The best way to save here is to prepare. Know if there are any additions you want to make to the car before sitting with the service salesman, and research average costs beforehand. This will prevent you from agreeing to any additional costs once the pressure is on. For example, if you want to have an undercoat applied because you live in a rust belt area, you should know the average cost. When the service is pitched, you can compare their costs to your researched cost to see if it is worth having the dealership do the service. As an added benefit, you can sometimes get these extras for free during the negotiating phase if you already know what you want.
#3: Get an outside opinion
Finally, never finalize a deal on a used car without first having it inspected by your own independent mechanic. This can give you negotiating power. Even small issues that you aren't concerned about fixing, whether mechanical or cosmetic, can help you negotiate the price. When you can't negotiate a lower cost, you can sometimes still get a free fix. For example, if the tires are old, the dealer may knock a few hundred dollars off to offset the cost of replacement, or they may replace the tires as part of the deal.