What Does OBO Mean When Selling a Car

If you’ve ever browsed online classifieds or looked at for-sale ads for used cars, you’ve likely come across the term “obo” listed after the asking price. But what does Obo mean in regard to purchasing a vehicle?

OBO Stands for “Or Best Offer”

The abbreviation “obo” means “or best offer.” When a seller lists a price followed by Obo, such as “$10,000 Obo,” it indicates that they are willing to entertain offers lower than the stated asking price for the car.

Sellers use OBO to let potential buyers know upfront that the listed price is not necessarily a firm, take-it-or-leave-it number. It opens the door for negotiations on the sale price of the vehicle.

Why Do Sellers Use OBO?

There are a few key reasons why a seller may choose to list their car as “$X obo” rather than just stating a non-negotiable fixed price:

  1. They Want to Get the Best Possible Price While the seller may have an ideal sale price in mind, using Obo allows them to potentially get offers over that target number from a highly motivated buyer. It keeps their options open rather than ruling out higher bids.
  2. They Are Unsure of the Market Value Determining an accurate, fair market price for a used vehicle can be difficult. By using Obo, sellers don’t have to risk underpricing their car and losing out on money.
  3. They Are Opening the Door to Negotiations Some buyers prefer to negotiate rather than pay a firm listed price. Using Obo signals the seller’s willingness to receive offers and work on the price.

How to Handle “Or Best Offer” When Buying a Car

If you see OBO attached to the asking price of a used car you’re interested in, here are some tips for handling it:

  • Research pricing for similar models to get an idea of the fair market value before making an offer.
  • Don’t lowball with an insultingly low offer that may offend the seller.
  • Explain your reasoning for your offer price, such as comparing it to other listings.
  • Be prepared to negotiate back and forth to meet in the middle on price.
  • Ask about the bottom line – the lowest price the seller is ultimately willing to accept.

The key with Obo is being reasonable with your initial offer while leaving room for the negotiation process to take place. Come armed with pricing data, negotiation skills, and a firm understanding of your own purchasing limits.

Also Read:

While Obo means you don’t necessarily have to pay the full listing price, it also doesn’t give you carte blanche to make outrageously low offers. Approach obo listings with professionalism, research, and reasonable expectations to increase your chances of driving away with the used car you want at a mutually agreed-upon price.

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