When a car seller includes the initials “O.B.O.” in an advertisement, it means he’ll take less than his asking price, specifically the best offer someone makes. OBO stands for “or best offer,” with the word “best” opening a host of possibilities. If you see a seller willing to consider a “best” offer, understand that "best" does not always mean "highest."
To encourage potential buyers who might not otherwise be able to afford a car she’s selling, or to test the waters to see if she can bring in more attractive offers, a seller might include an initial asking price and the words “or best offer” in her ad. She will collect the offers made that are lower than her asking price, and then contact these people if she doesn’t get the amount she originally wanted. She might get a part-cash/part-trade offer that's worth more than her original asking price. For these reasons, consider taking a chance on offering less than the original asking price when you make your first offer for a car advertised with an OBO consideration, or consider sweetening your deal with an asset you don't mind trading.
What is a “Best” Offer?
Best offer doesn’t necessarily mean the most money. When someone selling a car will take $10,000 or the best offer, this can mean several things. The seller might take less cash, accept your car as trade to lower the deal, make a swap for something else, such as a boat or transferable gift certificate, or consider owner financing. The timing of the payment of one offer might be better than another. If you have an idea for sweetening your offer while reducing the purchase price, run it by the seller, who might find it more attractive than his straight-cash asking price
Be prepared to make several offers to a seller to get the best deal possible. Call and ask to see the car and test drive it to let the seller know you’re a hot prospect, rather than someone making a quick call out of curiosity. This might make her more willing to negotiate to get cash quicker. Ask if the seller will finance all or part of the sale, allowing you to make monthly payments if you can’t afford the full price. You might offer to pay a higher price in exchange for owner financing. If you default, the owner keeps the money you’ve paid and the car, which can make the deal more attractive to him. If you want to trade your car or other asset, make sure your ownership papers are available and ready to sign over to the car seller.
If someone offers a seller $9,000 for a car and you offer $9,001 or any other higher amount, this doesn’t mean you’ve made the best offer. The other buyer who offered less might be willing to pay with cash, rather than a check. She might offer to make the payment today, rather than tomorrow or next week. If you make an offer the seller accepts, get it in writing as soon as possible. If he gets a better offer before you get the chance to make your payment and pick up the car, he may not be able to demand that you meet the better offer that came in after he had accepted your offer. Contact an attorney if you felt you had closed the deal and the seller then reneged.
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