What it Means When You See OBO on a Car
When buying a car, OBO stands for "or best offer," so what exactly does that mean for your negotiation?
When you're shopping for a used vehicle, you may come across an OBO car listing — but what exactly does OBO mean? In short, it stands for "or best offer". An OBO listing means that the seller is flexible and willing to go lower than their listing price if need be, even if they're still looking for the best possible offer.
Usually if someone lists a car for sale as OBO, they are motivated to sell it. This can be to your advantage, but there are often a few considerations to take into account.
Here are key details about OBO car listings, as well as how the seller's increased motivation can affect the car buying process.
How Flexible are Sellers for Cars with the OBO Label?
The seller has a decent amount of flexibility when it comes to using the OBO label to sell their car. It's worth noting that the best offer might not be the highest offer. For example, if a seller has two offers and one is slightly lower in price, but they will take the car off their hands that day, the seller may choose the lower offer instead of waiting a week for the higher bidder to pick up the car. Or maybe one buyer needs to wait for financing, whereas another can pay in cash right away. Each seller will decide what the best offer is to meet their needs.
How to Negotiate an OBO Offer
If you're interested in making an OBO offer, keep in mind that no matter how good your offer is, there's no guarantee the car will be sold to you. When you buy a used car through an individual instead of a dealership, you have less control over the situation.
Since OBO offers can involve a bit of negotiation, here are a few tips to help the process go smoothly:
Do your research - Before you make an offer, do some research on the specific vehicle you want to buy. You can conduct research online simply by reviewing virtual marketplaces selling similar makes and models, which might help you narrow down the typical asking price for the car you want. If your offer is significantly lower than what that type of car is selling for, then it may also be well below those of other potential buyers. Beyond the make and model, be sure to research other factors (like mileage) to see if you can find similar cars for sale online and get an idea of the asking price.
Know your maximum, start lower, and work your way up - Before you walk into a negotiation, it can be helpful to know the maximum price you're willing to pay. You don't want to start negotiating at your top offer. Instead, start lower and work your way up. Sometimes sellers want to feel like they "won" by negotiating a higher price.
Be firm and polite - Be firm, yet polite, regarding your maximum price. The seller may reject your offer now, but try to stay calm. Let them know that if they change their mind they are free to contact you.
How to Increase Your Odds of the Sale Going Through
Unfortunately, there is no way to completely ensure that the seller of an OBO car listing will accept your offer. To increase your odds:
- Do your research
- Be prepared to negotiate
- Expect to make multiple offers
Ask the seller if they are willing to work with you. While they may want to choose a buyer who can make a cash offer, they also may be willing to wait for financing to go through if you can make a higher bid. On the flip side, they may be willing to accept a lower offer in cash. Try asking what they're looking for from this sale, aside from the final sales price.