How to Get a Good Deal On a Used Car

Tips on negotiating the best used car price

There's one very good reason to consider buying a used vehicle versus a new one: depreciation. A new car will depreciate about 10% at the moment it leaves the lot and another 20% within its first year. After three years, the average car is worth about 60% of its original price.

That might be depressing news for the original owner, but it's a screaming deal for the prudent used-car buyer.

A model that is one to three years old should still have some time under the manufacturer’s warrant. And, unless it has been abused, it should be good for many more years of service. That creates buying opportunities for savvy car shoppers who know how to negotiate used car prices.

Key Takeaways

  • Do your online research first to identify the type of car you want and the price range you can expect.
  • Set your maximum price in advance and stick to it.
  • A deal with a private party can save you money but purchases from dealers are backed by lemon laws.
  • Getting pre-qualified can boost your negotiating power.
  • "Certified pre-owned" vehicles are the cream of the crop but also the priciest.

How Much Is a Used Car?

When negotiating a price on a used car, it helps to know how much they typically sell for.

As of April 2023, the average listing price of a used vehicle was $26,967, according to Cox Automotive, an industry services company. That was down about 4% from one year earlier. The average transaction price of a brand-new 2023 vehicle was a bit over $48,000, according to Car and Driver.

Note that these numbers reflect a gradual return to normal after the COVID pandemic when factors including a disruption in the supply of new vehicles inflated the prices of used vehicles.

Size Matters

Also keep in mind that the average prices include all of those giant and pricey SUVs that Americans so love. The average base sticker price of a brand-new compact car is $22,124, according to AutoList, Adding all possible bells and whistles brings the average to $28,698.

In terms of how much you should pay for a used car, that depends entirely on your budget. If you're paying cash for a used vehicle, then the amount you have on hand will likely determine how much you can spend. If you're planning to get an auto loan, you may have a larger used car buying budget to work with.

Remember to check the best car loan rates to compare financing options.


If you're planning to finance a used car purchase, consider getting prequalified or preapproved for a loan, as this can be a useful bargaining chip when negotiating price.

How to Plan a Used Car Purchase

So, how do you make sure you get a good deal when buying a used car? 

"Do everything you can before physically going to buy the car," said Philip Reed, a senior consumer advice editor at automotive review site Edmunds. That means researching what make and model you are interested in and how much they sell for in your area.

Start Online

If you're wondering whether it's worth the added time to do your homework on used vehicles, consider what you may be able to gain by doing so.

By researching specific vehicles that have the features and mileage you are looking for, you introduce competition to the car-buying process. A seller might not match the lowest price you find, but it cannot hurt to ask.

Online Sources for Used Car Shoppers

Edmunds is a good resource for auto shoppers. Along with Kelley Blue Book and the National Automotive Dealers Association, it tracks new and used car purchases to provide granular pricing information. "We collect tens of thousands of transactions per week from wholesale auctions, dealers both large and small, vehicle registration data, listing data and other sources," said Alec Gutierrez, a senior analyst for Kelley Blue Book, of his organization's process. "This data is then cleansed, normalized, and run through a statistical modeling process."

Beyond the valuable research tools available on the internet, you may choose to look at an online marketplace for buying and selling cars. Used car sites simplify the shopping experience with detailed searchable listings, car reviews, buyer guides, and more. Your vehicle could be just a few clicks away.


Some of the automotive magazines – particularly the largest, Car and Driver – have a lengthy backlog of reviews with a slant toward driving enthusiasts.

Conduct In-Person Research

Once you have determined what you want to buy, and what it typically sells for, it's time to do some research in-person. Specifically, this means taking a used vehicle for a test drive and giving it a careful visual inspection.

But a little more research into the vehicle's history is just as important.

Sources for Vehicle History Information

It's also important to ensure that everything the seller says about a used vehicle is true. Get the vehicle history report (Carfax and AutoCheck are two popular choices) to confirm the odometer reading, ownership history, and reports of accidents and flood damage. If buying from a private seller, you can also ask to see a copy of maintenance records.

This can help you get a better sense of what a used vehicle is truly worth, in terms of market value, and whether you're willing to pay that price, based on its condition.

If a seller seems reluctant to offer details about the vehicle, it's a sign to look elsewhere.


Consider having any used vehicle you plan to purchase looked over by a certified mechanic who can point out any major issues.

Negotiating With Private Sellers

Buying a used vehicle from a private seller may be an option if you plan to pay cash. But consider how much a private seller is likely to charge for a vehicle versus a dealership.

You may be able to negotiate on the price if the seller has a fairly urgent need to sell. If the seller is in no rush you may have a tougher time talking them down.

Set a Max and Stick With It

It's best to choose a set dollar amount that represents the absolute maximum you're willing to pay. Then set your starting price below that amount so you have room to work your way up.

For example, say you only have $5,000 to spend on a used car. You come across a great car that's priced at $5,500, just out of your price range. If the seller gives you an opportunity to make an offer, you could start at $4,500. From there, you and the seller can continue bargaining until you reach the $5,000 mark that you're comfortable paying.


Negotiating used car prices with a private seller could lead to a better deal but keep in mind that you may not get any type of warranty with the purchase.

Negotiating Used Car Price With Dealers

There are some advantages to purchasing a used vehicle from a dealership instead of a private seller. First, the dealer will have a wide range of cars on the lot, and that's easier than searching through individual listings from private sellers.

Dealers are also more likely to clean and perform a basic inspection of a car. They also are governed by Federal Trade Commission rules as well as state and local regulations. "If you buy from an established business, it has a reputation to uphold,” Reed said. “In many instances, they will also offer some sort of warranty – even if it is only for 30 days."


Buyers should ask how warranties will be honored and where any needed repairs will be made.

How Much Can You Talk a Dealer Down on a Used Car?

This is the central question that you should be considering when you’re planning to buy a used car, and there's no one-size-fits-all answer. The amount you can knock off the price ultimately depends on what the car is worth, how strong your financing position is, and how long the car has been on the lot.

Here are some tips to help you prepare to negotiate:

  • Check Kelley Blue Book or another online resource to get an idea of the vehicle's value and what similar models are selling for locally.
  • Consider how much trade-in value you may be able to add to the pot if you're trading in a car you already own.
  • Revisit your budget to determine how much you can realistically afford to spend, whether you're paying in cash or financing a vehicle.
  • Get estimates or quotes for similar vehicles from other dealers so you have some numbers to use as leverage with the dealership you plan to buy from.
  • Determine where to start with your initial offer and the max you're willing to pay.

Negotiating a used car price is something of an art, and it's important to have confidence as you begin to bargain. Don't allow a salesperson to intimidate you into making a deal that you're not comfortable with.

Negotiating a Used Car Price for Certified Pre-Owned

Certified pre-owned (CPO) vehicles are offered by most luxury brands, such as Lexus, Lincoln, and Mercedes-Benz, as well as by some mainstream makes such as Nissan and Chevrolet. CPO vehicles are thoroughly inspected, any maintenance issues are addressed, and they are cosmetically sound — no shredded interiors, bashed fenders, or missing trim.

By definition, certified cars are sold through dealers, not by private individuals.

When talking to a dealer about a certified car, have them show you its inspection report, which will list all of the areas checked, whether or not there were any recalls on the model, and even details such as tire tread depth and the thickness of the brake pads.

The CPO Premium

CPO cars tend to have less wear and tear. Mercedes, for instance, will only certify cars six years old or less, with fewer than 75,000 miles. The German brand then adds a year and unlimited miles to whatever initial warranty is left, plus 24-hour roadside assistance, trip interruption protection, and service loan cars.

You pay extra for CPO cars, however. "There is usually a $1,000 premium," Reed said. "But you are getting the cream of the (used car) crop. It turns used-car-buying into a new-car-buying experience."

Like new cars, CPO vehicles are best purchased at the end of the month, when dealers are looking to make their quotas and are more receptive to haggling.

Beyond the CPO market, the end-of-month timing doesn't work for used car sales. But other timing factors may matter.

For instance, if you live in an area that gets a lot of snow, you could get a better deal on a convertible in the fall and winter months. But wherever you are, you should avoid shopping in April when many people are blowing through their tax refunds.

How to Negotiate the Best Price on a Used Car

Knowledge is your best resource for getting the best deal. Knowing what other cars like the one you want are selling for is key to talking down a price.

But what else? Here's where your bargaining skills come into play. Simply accepting the dealer’s sticker price as the lowest price possible is a good way to give yourself a case of buyer's remorse. Unlike a new car, a used car has been on the road and has already lost some of its value.

Be Strategic

When a lower purchase price is the goal, you don't want to go in with the wrong approach. Come off as too demanding, and the dealer may not be willing to make any concessions in your favor. Go in too soft, and they may see you as a pushover.

When you sit down with the salesperson and present your offer, be firm but polite. Let them know that you've done your homework and you have an idea of what the car is worth.

Stay Focused

Don't let the salesperson steer the conversation off-course; stay focused on the issue at hand. A salesperson may try to distract you by discussing financing, insurance, or extras like a maintenance plan. This is a trap you should be prepared to avoid.

Take the opportunity to clearly make your case as to why the dealer should accept a lower price. For example, if you've seen the car sitting on the lot for weeks, remind the salesperson that cutting you a deal would free up space for another vehicle. If your inspection turned up something minor you'll need to have repaired, be sure to point that out. The goal is to get the dealer to acknowledge anything that might justify accepting your offer.

When to Walk Away

If the salesperson tells you the dealer can't take anything less than the sticker price, be ready to walk away. At this point, two things can happen: The salesperson will suddenly suggest that the two of you might be able to talk about price after all, or they will shake your hand and tell you to come back if you change your mind.

If the salesperson chooses the former, be ready to make a counteroffer to any price that's suggested. The counteroffer may not be much lower than the sticker price, but it's an opening to further negotiations.

At this point, you can increase your own offer slightly, but remember to keep your absolute ceiling in sight. It may take some back and forth but eventually, you may be able to compromise on a price that's acceptable to both sides. 

Be Persistent

Negotiating is a fine art, and sometimes, the salesperson simply may not want to hear what you have to say. One ploy is to adopt hardball tactics to try and wear you down. This is where the true test of your negotiating skills comes in.

If your offer is refused point-blank, don't wear out your welcome. Thank the salesperson for their time and say you’ll be looking elsewhere for a vehicle. Hand over your phone number and say that if they change their mind about making a sale, to give you a call. Then wait and see what happens.

Wait for a Follow-Up

It's quite possible that, in a day or two, the dealer may call you to tell you they've reconsidered your offer. If not, move on to the next used car lot and begin the negotiation process again.

It can be time-consuming and tedious, but at the end of the day, you'll thank yourself if your negotiation efforts allow you to purchase the right car at the right price.

A Few Traps to Avoid While Negotiating

There are a few more negotiating tips that are particularly relevant to buying a used car:

  • Don't let sales talk distract you. Car salespeople like to focus on the monthly payment that you are comfortable paying. This distracts from the bottom line. Bring the discussion back to the price of the car.
  • Wait for the dealer's first offer. Don't talk price until the salesperson throws out a number. It might be lower than what you expected to pay.
  • Rely on your research. You've checked the prices of similar vehicles online. Quote the prices, and ask if the salesperson can do better.
  • Make a realistic offer. A savings of 5% or so below the market price is a reasonable starting point for negotiations.

Can I Get a Loan to Purchase a Used Car?

Loans for purchasing a used vehicle are commonly available at banks, credit unions, and online lenders. If you're buying at a dealer, you might get a good financing deal directly from the dealership. If you're buying from a private individual that's not an option.

In any case, used car loans are a tad more expensive than loans for new cars. As of May 2023, the nationwide average 48-month loan for a used car was 7.41%, while the average for a new car was 6.81%, according to Bankrate.

Can I Trade In My Old Car for a Used Car?

You can trade in your old vehicle for a used vehicle.

If your old vehicle is a real junker, the dealer might make a "blind offer" of a flat trade-in price to be deducted from the price. Dealers sometimes make such offers as part of a promotion.

If it's still a pretty good car, check out its current resale value. Then, add it as a factor in your negotiations for the vehicle you want.

Should I Buy a Used Car Online?

It takes some guts to click the "buy" button on a big-ticket item like a car, but plenty of people do it.

In any case, online car buying sites are great places to do some of your research. They give you access to nationwide listings of vehicles and their current prices.

If you buy online, make sure that the site offers buyers the chance to test-drive the vehicle and get it inspected after delivery.

The Bottom Line

Research is all-important. If you know what you want and what it should cost, you are halfway there. Check NADA, Kelley Blue Book, or Edmunds for pricing information.

Both dealers and private sellers have advantages and disadvantages. Either way, you should thoroughly inspect and test drive any car you're considering and get the vehicle history report.

For a nearly new used car, CPO programs are worth a look.

Article Sources
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.
  1. Carfax. "Car Depreciation: How Much It Costs You."

  2. Car and Driver. "Average New Car Price Actually Drops, But It's Still Over $48,000."

  3. Cox Automotive. "Used-Vehicle Inventory, Prices Rise on Softening Sales."

  4. AutoList. "What Does the Average New Car Cost Now?"

  5. Federal Trade Commission. "Used Cars."

  6. Mercedes-Benz U.S. "Certified Pre-Owned."

  7. Bankrate. "Best auto loan rates in May 2023."

  8. Progressive. "Can I trade in my car for a used car?"

  9. Bankrate. "Tips for buying a used car."

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