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The Successful Negotiator
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 The Point Of The Deal
Employment Contracts
Managing the Negotiation Process
Trust
Ensuring
Negotiation Failure
Opening
Offers
The
Difficult Relationship
Additional
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Utilizing
What You Have Learned
Managing
The Communication Process
Beyond
the Obvious: Culture and Management in Northern Europe
Beyond
the Obvious: Culture and Management Issues in Northern Europe
Joint
Ventures in the Pharmaceutical Industry
 Everyday
Negotiations: Buying A Car
Trust:
The Cornerstone of Negotiations
Negotiating
with the Japanese
Negotiating
Rationally
Get-Smart
Househunting
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EVERYDAY
NEGOTIATIONS: BUYING A CAR
[Volume
1, No. 3]
.
. . . . . . . . . . . . . Next
to purchasing a home, buying a car is the largest purchase
that most of us will make. Buying a car can also be one
of the most frustrating of all of our purchases, one which
can truly test our skills of negotiation.
Planning
As in all negotiations, planning is probably the single
most critical thing you can do to ensure that you get the
car you want at a price you want to pay.
A number of helpful books and articles about buying cars
have been published. This issue of the newsletter is based
on the April, 1990 issue of Consumer Reports, Remer
Sutton's book, Don't Get Taken Every Time, and our
own experiences, as well as those of people who have attended
our workshops. We have quoted liberally from the Consumer
Reports article, "How to Drive A Hard Bargain in
a Soft Market." This article, along with the Sutton
book, outline some basic rules for planning. They are:
Determine
how much you are prepared to pay and how much you can afford
on a monthly basis.
Determine how you're going to pay for the car. Investigate
financing options.
Don't give your heart to any one car. You'll lose your objectivity
and, with it, your negotiating edge. Select a few models
that suit your needs and your wallet.
Decide on the type of car you need - large or small, two
or four doors, sedan, hatchback, wagon or minivan, new or
used. Don't forget, there is a distinction between your
needs and your wants.
Decide what equipment you need. Most models, both domestic
and foreign, are sold in two or more trim lines (standard,
DX, Deluxe, etc.) Trim lines vary greatly; sometimes it's
cheaper to buy a car in higher trim line than it is to buy
a basic model and dress it up with options.
Shop the dealers in your area to determine who has the car
you want. Check at least two dealers for each make. Check
their reputation for service, their loaner car policy, weekend
hours, and whether they work by appointment. What's the
chemistry? Does it feel like a place you will find comfortable
doing business?
In preparing your offer, find out what the car cost the
dealer; Consumer Reports publishes a guide which
lists dealers' prices.
Don't forget rebates. Check your local paper to find out
what's being offered.
The Negotiation
With all of the above information in hand, you are now ready
to buy your car. The negotiation process can be enhanced
if you remember the following:
Take
the initiative. Ask for your salesperson. Tell him/her that
you would like to go to his/her office and discuss price.
Let the sales person know that you are prepared to make
an offer, a firm offer, that doesn't leave any money on
the table.
Base your offer on the dealer's cost, not the sticker price.
In that way you will be able to negotiate up from the dealer's
"invoice price", not down from the "sticker"price.
The latter gives the dealer too much leverage.
Insist that the salesperson take your offer to his/her manager.
Don't give a deposit. Only give one once your offer has
been accepted.
If this is where you want to buy and they insist that your
offer is too low (and you believe they will let you walk),
make one additional price concession, but no more!
When you negotiate with the salesperson, make it clear that
you want the rebate up front, as an additional discount
off the price of the car, not 30 days later in the form
of a check. That will save you sales tax on the amount of
the rebate. Keep the deal simple. Don't confuse negotiations
over the purchase of a new car with discussions of a trade-in
or an auto loan. That can come later.
Summary
It is difficult to build trust and create a collaborative
climate in situations which are approached as competitive
"win/lose" negotiations. Buying a car seems to
be one of these situations.
What is possible, however, is to create a climate of mutual
respect, based on the wish for a fair and mutually beneficial
end to the negotiation. The car dealer must make a profit
by selling cars; that's not a disputed issue. It's the buyer's
belief that the car dealer may be trying to make too much
profit which creates the competitive climate. "What
is fair and reasonable profit?" is the question which
needs to be successfully resolved for both parties to be
satisfied with the negotiation.
Sources of Information
Consumer
Reports
256 Washington Street
Mount Vernon, NY 10553
Edmund's
Car Prices - Buyers Guide
Can be purchased in most bookstores
Sutton,
Remer: Don't Get Taken Every Time, Viking
Penguin, Inc., New York, 1982.
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