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I’ve sold cars for 23 years – there are five things you must NEVER do when trying to sell up… it could cost £1,000s
Including why a common negotiating tactic is actually a big loser
A CAR dealer has revealed five things you must never do when trying to sell your vehicle.
Mike Davenport, who has worked in the motors industry for 23 years, explained how some common negotiating tactics could actually leave you hundreds worse off.
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Speaking in a YouTube video he said: "I want to share with you these first worst techniques to negotiate a car deal.
"And these are not techniques that I've made up.
"These are techniques that people continue to try and try...and they fail miserably 100% of the time."
It's not just one transaction
The biggest mistake Mike sees is customers treating the process of buying the car as one large transaction.
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In fact, according to him, it can be up to three separate negotiation processes all at once.
The first is the agreement on the actual price of the car but then you have a second transaction when you consider how you might pay that price.
That could be in cash, on finance or by leasing.
On this, Mike's most important recommendation was to never indicate that you are going to pay in cash.
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Most dealerships have a finance arm and dealers make commission based on the finance agreements they offer on the vehicles they sell.
As a result, they are more likely to give an up-front discount on the sale price if they think there is a chance of a hefty commission down the line.
I've been a car dealer for 43 years - never say four things if you want a good deal… slip of the tongue could cost you
Cash buyers, though, offer relatively little profit margin "on the back-end", meaning that the dealer has to increase the sale price to keep their revenue healthy.
The third transaction is then the potential of trading in your old car while getting the best valuation possible.
Things like giving it a clean, making sure it's fully serviced and avoiding smoking in the car are all great ways to boost its value when trying to trade.
Also make sure to "do you homework" and get multiple independent valuations so you go in with a good idea of what your old car is worth.
Making the deal on-site
Linking up with the previous point Mike urged Brits not to carry out those three transactions on the day of sale while you sit in the dealership.
He said: "You've got to do all your homework on payments and such at home - that's why it's called homework - not on dealership ground.
"When negotiating on dealership property, you are at a big disadvantage.
"They call it home-field advantage for a reason.
"They do this every day, you do this every three to five years."
Dumb questions
Next, Mike expressed his frustration with customers asking "dumb questions", with one springing to mind in particular.
The first was asking if the initial offer is the dealer's "best price", as they are extremely unlikely to say that it isn't.
You don't have a lot of negotiating power
Ultimately, selling cars is a "race to the bottom" so dealers have likely already given the lowest price they can while maintaining their profit margins.
It's not very likely they'd sacrifice that simply because you asked a basic question without any figures to back it up.
Low balling
Low-balling (i.e. knowingly offering less than a car is worth) is one of the most common aggressive negotiation tactics to try and cut costs.
However, Mike had a strong warning against trying this on with car dealers.
They work with cars day in and day out and have a good idea of what they are worth, as well as access to independent trade valuation tools.
He explained: "Lowball offers don't get you nowhere.
"If a dealership has their cars priced at £10,000 and you offer them £5,000 they don't have £5,000 of room to mark-up.
"You don't have a lot of negotiating power."
Unfortunately, all a low-ball offer is likely to do is sour the conversation between you and your dealer and leave them less inclined to offer you a good deal.
Not knowing the market
Finally, you have to keep up to date with the car sales market to see when is the best time to buy.
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Keeping track on interest rates and sales numbers could indicate when there is a dip and, consequently, when dealers are more likely to give out a good deal.
Another great tip is to try and target models which aren't as popular, as brokers will be keen to shift them off their books and may even accept a small loss to do so.
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