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Use the techniques of top negotiators when you buy a carMay 29 '01 (Updated Dec 05 '03) Write an essay on this topic.
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The Bottom Line Use these tried and true methods to maximize your negotiating power when buying a car.
When you're negotiating to buy a car, it seems like the dealer has all the advantages. After all, the sales person is a pro and you're an amateur. But, as a customer, you have many advantages that can bolster your negotiating power. Here are some things you can do to get a better price on your next automobile purchase. 1. Use time to your advantage. In a variety of different ways, time is your friend. You get to choose when you go to the dealer and how much time you're willing to spend there. By establishing your desire and ability to buy, you also get to more or less force a sales person to spend his/her precious time with you. Do your price research. Then choose a time when you're healthy, in good spirits, well-rested, well-fed and in the mood to negotiate. The best time to arrive at the dealer is a few days before the end of a quota period (usually the end of the month) and about two hours before closing time, when the staff is tired and anxious to get home. A day with bad weather--either too hot or too cold, rainy, snowy, etc.-- is a good choice, too, because there will be few other customers. Try to be the only customer in the showroom. Remember that time is your ally. The longer you spend negotiating, the stronger your position becomes because of the dealership's time investment in dealing with you. Remember too, that the moment you sign the sales contract, your negotiating power goes to zero, so get everything you want in writing in the contract before you sign. 2. Use information and uncertainty to your advantage. Information is power. That's why, beyond establishing your desire and ability to buy, you should avoid imparting any more information to the sales person. Just remember that, in any negotiation, the person asking questions has gained the upper hand on the person answering them. Play dumb. Respond to a question with a question of your own. Shake your head. Just don't answer the sales person's questions. Come to the bargaining table with one crucial piece of information: the amount you are actually willing to pay for the car you want. Know that the deal you are proposing is profitable for the dealer, but never offer to prove it to the sales person by showing your figures. You can stock up on information, especially the dealer invoice for the basic car and each option you want, by consulting a web site like edmunds.com or carpoint.com . For cars that are not in short supply, you're getting a good (but not excellent) deal if you pay less than $500 over dealer invoice. Realize, though, that the dealer is still making a profit even if you pay exactly the dealer invoice amount, because of something called dealer holdback, a kickback from the manufacturer to the dealer after the car is sold. For last year's models or models that are just languishing on dealer lots, you may be able to make a deal way below dealer invoice. On the other hand, highly sought models that are in short supply may command a considerable markup, not just above invoice, but even way over the suggested retail price. Still, that shouldn't keep you from bargaining. Uncertainty is also your ally, especially any uncertainty you can induce in the sales person regarding your own sanity, stability, or intelligence. The best negotiators are often crazy, unstable, and/or not so bright, but they do know what they want, and they hold out until they get it. 3. Use tension to your advantage. People will do almost anything to reduce the feeling of tension. That's why car sales people spend so much time trying to increase your tension by making you feel guilty, stupid, hopelessly uninformed, inadequate, etc., and by making you wait while they supposedly consult the sales manager. When you feel tense, take a deep breath, walk around, and remember that the worst thing that can happen is that you won't buy a car today. On the other hand, raising the level of tension in the sales person may help you get a better deal. Make it clear that he/she and not you is the impediment to closing the deal. Stick to your offer like a broken record. Make it clear that you know your offer is reasonable. Another way to increase the sales person's tension while reducing your own is to put a strict time limit on how long you'll wait when they go on those inevitable breaks to "check with the sales manager." I take an egg timer with me and start it up when he/she says he/she has to go check. I tell him/her I'm going to leave when the three minutes are up. You'd be surprised how that moves the process along. 4. Remember your fundamental advantages as a customer. Don't ever forget that you're the customer, and the customer is always right. Without you there is no deal. Be sure you know how much you are willing to pay, and be ready to walk out if you don't get your price or you aren't treated right. As a matter of fact, I suggest that you get up and walk around several times and walk out at least once during any negotiation. Walking out is most effective when the sales person thinks the deal is about to close. It's just plain fun to have a sales person chase you down the block, and it will almost always net you another price concession. Happy car buying!  |
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