If you settle for less it means that you agree to a deal on the basis that you receive less money than you had asked for.
Suppose you are trying to sell an office block for 10m GBP and you finally sell it for 9m GBP, you have settled for less than you were originally asking.
You ask someone for 5,000 GBP for your car. He asks you if you would settle for less; that means he is asking you if you are willing to bargain. If you say you won't settle for less, then you are saying that any purchaser will have to pay the full asking price for the car.
You are trying to sell a car and are asking $20,000 for it, but your prospective buyer says "Your car is a load of crap, I'll only give you $10,000."
So you say "Yes, but it's a very good load of crap, so how about $18,000?"
He says "The brakes don't work. It's only worth $12,000."
So you say "One of them does! $16,000, and that's my last offer."
In the end, you both agree (or settle) on $15,000. But you have "settled for less" than you originally wanted.
Edit: It seems that I credit you with having a more expensive car than Thomas.