Buying a used car: A guide to getting the best price

If you're a car enthusiast, you would usually get calls from your friends wanting your help with cars. One of the things they'd ask is how to get a good deal on a used car.

Some might think it takes someone with a fast tongue to get the best deals, but it isn't always the case. It is about being informed. And to have the best deal is to know more about the car and the right price for it.

So here are some tips for those looking on how to negotiate for a better price. 

1. Do your research, use the tools!

This cannot be stressed enough. To have any room to negotiate or to find a good deal to begin with, you need to do your research.

From finding the best prices to those with the lowest depreciation, pull up a list of cars that are within your budget and work from there.

Feeling confused? Click on a car, and look for the price chart in the listing. That is a useful tool to see the average cost of the car on market. You can also be notified of price movements, too.

Check why some cars cost more than others - perhaps it has a higher OMV? Or maybe it's an old listing that is not updated? Cars are a depreciating asset, and them being posted up for sale doesn't nullify that.

2. Find the price when new

While many go for the exact make and model of the car they're looking for, not many take note of the specifications. It might just offer you new insight to the current selling price.

Either go to the Pricing tab on a new car listing, or for cars which are discontinued, the Past Cars page.

From there, get the numbers you need. Take for example the current Volkswagen Passat. The 1.8-litre equipped variant comes in two trims - Comfortline and Highline - with the latter being better equipped.

But if you look at used prices now, both cars share almost the same depreciation. This is despite the Highline costing some $10,000 to $20,000 more when new.

3. Scrap value is important

'Scrap value' or 'paper value' consists mainly of three things - COE rebate, PARF rebate (if applicable), and the car's body value.

While body value is determined by exporters and scrapyards, COE and PARF rebates are fixed calculations that can be retrieved or calculated yourself.

sgCarMart's used car listings do offer an estimate based on PARF and COE rebates of the car. You can also find out the rebates available on your intended date of deregistration.

Going even further, you can take a look at the list of cars that have been transacted on Quotz. From here, you can get a good gauge as to how much cars are worth before they’re put on sale. 

4. View all the cars first

With the exact specifications, and the prices, go out and view the cars. Call the dealers and make appointments if necessary.

A good tip is to view the most expensive to the cheapest. Sometimes, the most expensive might not have hidden fees or better interest rates on loans.

Don't be easily swayed by perceived prices or actual conditions of the vehicle. What might seem like a good deal at first may not really be as good when compared to other cars.

So take a day or two to check out the cars you've shortlisted. Get the price, extra fees, and interest rates - also known as the 'final price'.

5. Best price

Yes, that's a lot of work to complete. But remember, your ability to deflect all the sweet talk (and however good your persuasion skills are), will only get you so far.

So, for example, the car you've narrowed your sights to is selling for about $10,000 above paper value. Perhaps asking for a $2,000 discount sounds reasonable. It is if there aren't any additional 'fees' that'll offset it.

While some fees are necessary for processing a deal, some 'administrative' fees are clearly just there for profit. So, always find out the reason behind it.

To avoid the possibility of losing whatever you've saved from negotiating, always ask for the final price including all fees, as mentioned earlier.

6. Bad price? Walk away. Good price? Lock it down!

Mutual respect goes a long way. While there are some bad eggs in the trade, car dealers are, by and large, not here to scam or cheat. Dealers just have cars that they want to sell off their inventory.

After all, they're providing a selection of cars for you to check out, including financial services if needed.

So, don't like the numbers? Walk away. It will only be time that you're wasting. Again, remember that finding a good deal is your right.

Many will be honest with you and tell you why their discounts are final. Some will tell you their mark-ups, too. But if it is no good for your wallet, walk away.

If the numbers work out, go ahead and lock the price down! Ensure it is a purchase deposit. That means the deposit goes towards the purchase of the vehicle.

This article was first published in sgCarMart.