Car Negotiation Coach

In our current economic crisis, no one wants to overpay for goods or services. In fact, many of us have even shunned the notion of paying full price, preferring to wait for discounts or sales. TV shows like Extreme Couponing and Pawn Stars have opened a whole new world of possibility for shoppers across the nation – not only is it socially acceptable to save money on the things we need, but it’s also becoming a necessity.

Some things in life are non-negotiable. Taxes, for example, don’t provide much room to  haggle. You won’t find a coupon to reduce the costs of employer-sponsored health insurance. And you definitely can’t talk your way out of paying for college – if you fail to make the payments on federal student loans, the government WILL come find you.

But what about the things we can negotiate? How does one become skilled at paying less without coming across as a jerk or cheapskate?

Learning to Negotiate

Getting a deal on a particular good or service is an art form. That’s not to say we should strive for cheating the system; I’m simply saying that most of us are not natural negotiators. It takes practice to successfully convince someone to give you what you want at a lower cost.

In order to maximize your chances of saving money, you need to spend time learning how to negotiate properly. Here are a few tips to help you:

1. Do some research. If you want to buy a particular item at a discount, you first have to figure out how much it usually costs. For example, if the going rate for piano lessons in your area is $100 an hour, you aren’t likely to talk someone down to $10 an hour. Your talking points need to be realistic and based on facts.

2. Make a list of necessary vs. unnecessary components. If you’re shopping for a pair of running shoes, you may not need iPod connectivity or super advanced arch support. However, it’s easy to be distracted by these “extra” features while shopping if you haven’t made a firm decision about what you really need.

3. Determine your idealistic and maximum prices ahead of time. Keeping your research in mind, choose the price you hope to pay as well as the maximum price you’re willing to pay for an item. I may hope to find a house for $65,000, but if that’s not possible, I may be willing to pay as much as $75,000. Knowing my limits will prevent me from agreeing to spend more than I want.

4. Know the small details. Tell me which argument sounds more convincing: “I want this lamp at a 40% discount because I don’t want to pay full price,” or “I’d like 40% off because this lamp it’s from last year’s line. Plus it’s a floor model with a small chip in the base.” When you can present concrete reasons why you deserve to pay less, you’re more likely to get what you asked for.

5. Be direct…. When a store employee asks, “Can I help you?” this is your opportunity to save time and effort. If you respond, “Well, I think I want a blender,” you’re going to kick yourself later when you leave the store $50 over budget. Instead, tell them exactly what you want: “Yes, I saw a 3-quart blender in your circular that’s on sale for $29.99. Could you tell me where to find it?”

6. …But don’t be rude. Raising your voice, calling names, or making threats are excellent ways to fail in your negotiations. The minute you show disrespect, you have proven that you are ruled by emotions. For someone who works on commission, this is a dream – people who become emotional are often easily swayed by sales tactics.

7. Become a broken record. Salesmen and store clerks will offer all kinds of convincing reasons why you should pay more, but this is no time to lose your gumption. In a calm voice, respond with comments like, “I understand. But I am still only willing to pay $85 for this side table,” or “You make good points. However, this model still contains more features than I’m looking for.”

8. Be willing to walk away. This is where numbers 1-4 come in. If you have researched how much a roof repair should cost, and you’ve determined what type of shingles you need as well as the maximum you’re willing to pay, stick to those parameters. Don’t agree to spend extra money – there are other roofers in business, I promise. When you sense that negotiations aren’t going as planned, thank the person for his/her time and move on. They may call later to agree to your terms, and if not, you can find someone who will (as long as you’re being realistic).

9. Pay with cash whenever possible. When you pull out a credit card to make a purchase, people may assume you can’t really afford what you’re buying (whether or not that’s true). It’s much easier to negotiate when you can point at a car and say, “I’ll write you a check for $9000 right now,” versus applying for dealer financing. If a salesman senses that you are spending beyond your means, s/he is more likely to fight your negotiations every step of the way.

10. When you’re successful, thank the merchant profusely. I don’t just mean thanking them with words (that’s a given). If a store or individual gives you a good deal, thank them with your repeat business and word of mouth as well. It’s fun to congratulate yourself for scoring a great deal, but remember that the seller had to give a few concessions to make it possible.

Have you ever used these tips to negotiate a purchase? Are there any I missed? Share your stories in the comments!

Get a personalized car buying strategy guide to learn how to buy a new car at the best possible price. It only takes a few seconds and could save you thousands of dollars! Did I mention it's free and you don't even have to register?

Why is it free? Because buying a car is something almost everyone has to do and I strongly believe the process is designed to confuse and take advantage of consumers. I'd like to level the playing field and give everyone a chance at a fair deal.