It’s hard to find the perfect car on a budget. We all know what it’s like to start car shopping and be disappointed with the prospects. It’s hard to find that car on a budget. If only there was a way to get all the options at a low price…

Well… there is a way! While it isn’t typically possible to buy your dream car on the budget you’re working with, it is possible if you are willing to work for it and trade your time. In this article, I’ll share with you the tactics to landing a killer deal on a car.

Step 1 – Drill down on the car you want

The first step is to stay focused on what you want. The number of makes and models are nauseating. There was a study done with Jams at a street fair where shoppers were asked to choose their favorite flavor. The study found that people were less likely to choose a favorite when they had more flavors to choose from versus less flavors. The point is, knowing what you want will help you achieve your goal! You have to learn to say no to other cars (unless a sweet deal comes up)!

NOTE: We are assuming you currently have the time to search and are not urgently in need of a car. If you are urgently looking, read through our article on how to inspect used cars to avoid a lemon. High mileage is okay.

Step 2 – Figure out the fair value of the car

This step is quite simple. What I like to do is gain a broad understanding of the car so I’ll watch a few review videos on Youtube (e.g. test drives, feature set, and common problem areas). If you’re buying a higher mileage car, you’ll want to understand what common problems the car might have so watching a few videos will be helpful.

Afterwards, you’ll want to figure out what used car prices are going for. Start with websites such as Kelly Blue Book or Nada to gauge what the car is worth. I personally like to look at my local Craigslist to see what sellers are listing the car for in my area since different geographic areas will have slightly different pricing. Next, I’ll track all listings on a spreadsheet including the asking price, mileage, and cosmetic condition. I’ll add cars I find on eBay, Offerup, and Facebook Marketplace to the spreadsheet as well.

Finally, I’ll compile all this information on a spreadsheet and examine which seller is offering the best price.

NOTE: If you are including cars outside of your area, you will need to factor in the time and gas to pick it up or the cost of freight.

Step 3 – Determine what the car is worth to you

How much more are you willing to pay to get rid of the pain of not having that car now?

I recently purchased a Honda Civic on auction and did not know if it would run (video). Before I bought this car, I knew I would have to invest time into restoring the car. I had actually looked at my calendar and figured in my evenings and weekends to assess if this was a project I wanted to take on. I wasn’t urgently looking for a car, but I wanted to a functional 2nd car in the family within a few months. I wasn’t in a rush, so I was willing to wait for a deal.

Now… you might be in a different situation. You might want a car TODAY, or you may need a car in 2 weeks when you start your new job.

Imagine this… you accepted a job in a neighboring city that starts in 2 weeks. Your spouse uses the car as her daily driver and you can’t use that car. So now you really need a 2nd car. I bet you’d be willing to pay a lot more for a car in this situation. How much extra would you pay though?

Now imagine a different situation… you just got a raise at work and you’re making more than you ever imagined! You’ve been driving around a hunker (Ford Focus) since college and now ready to upgrade (sound familiar? 😉). You’re looking for a car with class, but still not at the sticker price. You can’t afford a new car because you hate debt, but you can do better… how about a 1996 BMW M3 with 150,000 miles. Saaawwweeeettt!

The seller is asking about $8,499 for the car. You go and meet the seller.

Step 4 – Negotiate

A former FBI hostage negotiator Chris Voss once told me (through his book Never Split the Difference) everything in life is a negotiation (including conversations with your spouse and kids). I actually agree with him. He states that anything you want and ask for requires a case. Relating this back to buying a car, you will need to make a case for why you want the car at a lower price.

In order to successfully negotiate a lower price, you need to know the sellers motivations for selling the car. Does he need the money to pay rent? Does he simply have too many cars and his spouse wants it gone? Is (s)he moving out of the country?

You can collect this information by being curious and learning about seller. Get to know the seller, personally. Earlier in the article, we went through how to determine what the car is worth to you. In kind, it is good to assume the seller has done a similar math for what (s)he wants for the car.

To prepare your negotiation, fill out this 5 minute negotiation sheet. It’ll help you think through and prepare points to bring up during the negotiation. Whip it out during your negotiation so the seller knows you’re serious. Tell him the price you are willing to pay for it. Then, tell him all the reasons he should sell today. Tell him some reasons why you can’t raise your price. Remind him how it’s a fair price and selling the car today saves time on both sides.

Wrap up

So there you have it, 4 steps to helping you find that killer deal on budget. After drilling down on the car you want, figuring out the value of the car, assessing your x factor price, and negotiating, we hope you can get that killer deal that you’ll brag about to your friends. It takes a little elbow grease up front but it’s well worth the savings and it is a sweet reward when you can land a deal.