What does OBO mean when buying or selling a car?

If you’re buying a used car from a private seller, you may have come across a listing with “OBO” next to the price that might’ve left you scratching your head thinking, “What does OBO mean?”. In short, OBO means “or best offer,” and typically indicates that the seller who posted the listing is flexible and open for negotiation. Marking a car sale as OBO may also show that the seller could be looking to get rid of the car quickly, which you may be able to leverage as a buyer. Let’s kick it into gear and learn more about OBO car sales.

What does OBO stand for?

OBO stands for “or best offer” and is typically used to indicate price flexibility on a sale (whether it’s for a car or something else, like used furniture). If you see an “or best offer” used car listing, this usually shows that the seller is open to listening to counteroffers and working out a deal — possibly even one that includes other forms of payment.

For example, imagine you’re currently browsing the private market for a used car. You see an offer where the seller lists an asking price (if they choose to at all) and adds OBO at the end. In this situation, the seller is setting a benchmark price, but is also expressing that they’re leaving payment terms open-ended and may be open to many different types of offers. Perhaps the seller would be open to you trading your car for their car with some added cash on the side. The seller may even be open to a direct cash offer that’s less than their asking price or accept other valuable items instead, especially if they’re reluctant to go through the trouble of continuing to advertise the car.

In the end, OBO listings leave a lot to the seller’s discretion, and it’s up to you as a buyer to make them an offer they hopefully can’t refuse.

What does “firm on price” mean?

Where OBO listings offer room for flexibility, “firm on price” car listings typically mean the opposite. If a seller lists a car with a firm price, that tends to indicate that they’re unwilling to negotiate and want at least that asking price (or higher). This may be especially true for sellers who don’t necessarily need to get rid of the car urgently and have the time and patience to wait for a buyer willing to meet their benchmark.

Knowing how to estimate your car's value may be especially important before you list your car or shop in the used car marketplace. As a buyer, identifying when a seller may be overvaluing their car could be a useful negotiation chip as you talk through pricing. However, with most ‘firm on price’ listings, the seller may not be willing to budge.

Tips to negotiate an OBO offer

Knowing how to negotiate with a private seller can be especially useful for OBO listings, as these are inherently more open to negotiation. A few tips for negotiating an OBO car listing include:

• Being open to flexibility: Just like the seller is indicating their willingness to receive different offers, you may want to be open to giving a different offer than you originally expected. If the seller declines your initial offer, that doesn’t necessarily mean you’re out of a deal. Being open to exploring alternative solutions with your seller may allow for a transaction you didn’t necessarily expect, but that works for both parties.
• Researching the car beforehand: Before engaging in any negotiation, you may benefit from researching the value of the car listed with an online car shopping tool to get an estimate on reasonable price ranges for different cars. If the starting price listed is much lower than your estimate, you may want to ask some questions about things like the car’s accident history to see if there’s a reason for the discrepancy.
• Establishing a reasonable price: Doing research helps you establish a reasonable offer to open an OBO negotiation with. Starting off too low may discourage the seller from engaging with you, but going too high too early may leave you with the short end of the stick. Consider the market value of the car, any flaws or issues it may have and try to set a reasonable starting point to kick things off on a positive note for both of you.

In summary

If you see ”OBO,” meaning “or best offer,” when you’re buying a car, it’s an indication that the seller is likely open to negotiation on their initial asking price. These sellers may even be open to alternative payment options, like a trade of some sort, and they generally aren’t firm on price. If you're going to try and negotiate with an OBO seller, it may help to do your research and establish a reasonable starting price before sending your first offer.