How to buy a used car

When negotiating for a used automobile, most buyers focus on the price of the car, while dealerships might focus on the trade-in and back-end sales. If you understand how auto dealers approach the negotiation, you can drive away with a fair price on a great car. It begins before you ever set foot on the lot.

Learn about our financing options

Get pre-approved

Getting pre-approved is the best way to know how much car you can afford. To get pre-approved for a vehicle loan at Oregon State Credit Union or call 800-732-0173 or drop by any branch.

Research cars

Whether you use Consumer Reports, Edmunds or some other resource, research the cars you are considering. Most car models have good years and bad. Know which years were good ones for each make and model you are evaluating.

Get an idea of vehicle value:

  1. Check the Kelley Blue Book or a similar reference source.
  2. Go online and find out which dealers have the cars you’re considering and what the asking price is.

Visit the car lots

Armed with your list of acceptable makes, model and years, it’s time to hit the car lots. The Internet and the rise of digital car lots has revolutionized car shopping. These days you can visit websites with car-finding and car-buying tools to make shopping easier.

  1. Try out the car finding tool we provide here at
  2. Don't get attached to any particular car. Instead, make a list of your favorites.

Get a CarFax

A CarFax is a comprehensive report on the history of a vehicle. It will reveal a host of potentially useful information, including number of previous owners and if the car has ever been totaled or been in an accident. Many dealerships supply the CarFax for free, so be sure to ask.

Clean-up your trade-in

If you’re counting on a trade-in to use as a down payment, then be diligent about the following:

  • Clean your vehicle, either by doing it yourself or getting it detailed by a service.
  • Make any minor repairs needed.
  • Find out the likely re-sale value of your trade-in by researching the Kelley Blue Book price. Then check the sticker price of vehicles of the same make, model and year, and which are in your area.

Armed with this knowledge, you will know how much negotiating room you have.

Time to negotiate

Before you engage a sales person in a negotiation, you should already know:

  • How much car you can afford.
  • Where your financing is coming from.
  • The fair market value and history of each car on your short list.
  • The fair market value of your trade-in.

Learn about our financing options

One more thing: Know your walk-away point.

In any negotiation it is possible for two parties to reach a stalemate. If you know the least amount you’ll take for your trade-in and the most you’ll pay for a given car, you’ll also know when negotiations have stalled. At that point you may have to stand up and politely, but firmly, exit the discussion. If it comes to that, try to leave your name and contact number with the sales person in case the dealership reconsiders your offer.

Managing the discussion

Managing the discussion with a sales person boils down to personal style. It doesn’t matter whether you make the first offer or wait for the sales person to do so, but keep your limits firmly in mind. At some point in the negotiations your sales person will retreat to the back office to “ask the sales manager.” If you have padded your offer you will have some room to negotiate, but stick firm to your limits. Let the sales person know you will not be moved beyond your limits. This is business – if the dealership finds your offer too low, they will decline it with no hard feelings.

Auto loan negotiations will come down to three points:

  1. How much you’ll get for your trade in.
  2. How much you’ll pay for the car you’re buying.
  3. How much you’ll pay for financing.

Try to negotiate each point separately.

  • Begin with the trade in; don’t let the sales person tie the price of the new car to the value of your trade in.
  • Because you have been pre-approved for a loan, insist that you skip over any discussion of financing.

Additional products

The dealership will offer Guaranteed Asset Protection (GAP) and warranty products for you to purchase. Since you have been pre-approved for a loan at the credit union, you will have been educated about those same products offered by the credit union, and you will be able to make an informed choice.

Use a service

If you just hate the thought of negotiating for a car, try using a car buying service. These are growing in popularity as a way for busy people to avoid the time-consuming task of car buying. You’ll still need to do your research. The more specific you can be with your instructions to the car buyer, the happier you will be with the results.

Learn about our financing options

Back to financial education resources


Go to main navigation