14 steps guerilla tactics used car negotiation process
After you've looked over
our 12 step checklist on how to prepare yourself to go to the dealership,
prepared yourself by learning about common scams and tactics, now let's examine
the actual steps you have to take at the dealership itself.
The most important key
Your most important point
during the negotiation process is to reverse the conversational frame in such a
way that they feel that the value of your business is higher than the value of
their offers. Meaning that you have to structure your approach in a way that
would portray you as having power, rather than them having power. These steps
are essentially a guideline on how to reframe the whole process so that THEY
chase your business and offer you the best deal, not the other way around.
Come in slow
You can't just come in
fast and indicate that you're interested in buying a car today. This just
lowered your ability to control frame, since the salesman knows your intentions.
Come in slowly, look around the car you want to buy, preferably let salesman
initiate the conversation. Once you're in conversation with him, indicate your
POTENTIAL interest in this car. Make yourself appear as a window shopper at
first who's undecided what he/she wants.
Take your time
The more time salesman
invests into making a deal with you, the more chance you have of him agreeing to
your terms. One time we were buying a car and negotiated for about 4 hours,
however in the end we got the car at a very good deal. The reason we got it was
because we weren't in a hurry and took our time negotiating different aspects of
the deal, so in 4 hours the salesman was quite tired and started to make more
reasonable offers.
Act like you're about to leave
Time-to-time show the
willingness to walk away. This is very powerful and switches them into chase
mode. If they feel like you're about to slip away, they will almost often
sweeten the deal. Use your cell phone when you use this technique, by saying you
keep getting calls from salesmen at other dealerships that are offering you
pretty good deals. Don't go into details, just keep saying that their deal so
far seems more appealing, but you're curious to find out what they have to
offer. Appear like you really don't mind buying a car from them, but you just
can't help it that someone else is offering you a better deal (take the responsibility
off yourself by putting it on them).
Show them other cars
Get some cheap deals
online and show them actual ads of cars you're "going to look at
today". Tell them that if the deal is good, you'll be willing to stay and
seal it, however, if they cannot match your ideal price, then you just have no
other choice.
Carefully inspect the car following
our mechanical guide
Find everything that can
possibly be wrong with it. Dings, excessive tire wear, broken accessories, worn
interior. Anything that can be used as a leverage in negotiations. Then present
these to salesman saying that this stuff really lowers the value of the car and
that the asking price is obviously way too high for the car in such condition.
This de-values their product, thus increasing the value of your business, which
is quite a potent leverage. Often salesman will go on defensive trying to break
your frame, saying that these things don't really lower the value of the car and
it's adjusted into the asking price. Don't argue, just inform him that you'll
have to think about it some more. Onto the next step.
Use third party authority
This is a very powerful
technique and dealerships use it all the time. Have you ever made an offer and
salesman assured you that he's working with you against the bad bad sales
manager to get the best deal? Well, it's a well orchestrated lie to take the
responsibility off of himself for setting the price. You can do the same thing!
Just say you're buying the car for someone else and they have fixed budget.
Don't tell them what the budget is yet, just tell them you'll have to call the
person and find out before any offers are exchanged.
Then, after you test drive
the car and make sure that nothing is majorly wrong with the car, call the
"authority person" from your cell phone and tell salesman you need 5
minutes to talk it over (preferably if the salesman doesn't hear you). this puts
you in total control of the process. Afterwards, inform them what the person's
offer is, based on the condition that the car is in. Make sure to emphasize on
all blemishes you can find.
Secure financing and get the loan
check beforehand for under KBB price
This technique is rather simple,
you just shop for best financing deal and get it arranged before you go to the
dealership. The check is lower than the price you're willing to pay, and when
you make your initial offer, you explain to them that this is all you have.
Start negotiating with them and say that you might come up with more money, but
you need to make phone calls to see if the money is available. This gives you
leverage in negotiations by taking the responsibility off of you for having
money. Essentially you have to frame it so that the person you're buying the car
for has to authorize any extra payments over the bank check amount, every time
there are counter-offers.
Make an offer - much lower than what
you're intending to pay
We prefer not to wait for
an offer, but instead make an offer that is below what we're willing to pay.
Depending on asking and market prices of the car it can be anywhere from few
hundred dollars to few thousand dollars. Generally if the car's asking price is
12,000$, it's Kelly Blue Book price is 11,500$, then you should start
negotiations at about 9,500$.
At this point you're
likely be ridiculed by salesman. He will try to say that the dealership needs to
make money, he has little kids, and all that other stuff to induce guilt into
you. They might even flat out refuse. Usually when this happens we ask for
counter-offer or "get a call" 3 mins later from another dealership
offering us a pretty good deal (don't tell them what the details of the deal
are).
Tell them you're seriously
considering another dealer's offer, but willing to listen to what they have to
offer.
Once they make an
counter-offer, it will usually be much higher than your offer, yet slightly less
than original asking price. This is a step forward. Now say that you'll need to
check with the person for whom you're buying the car. Go outside and "make
a phone call". Return saying that "the person is interested, but this
is just too much money". Make another offer, a slightly higher than what
you offered previously. Tell them the person on the line said this is their new
offer. You'll likely get a counter-offer with either the same price or just a
tiny bit lower.
This is where we'll
usually be entering the position of stalemate. The difference between the asking
price and an offer is too wide and they will seem to be reluctant to go down any
lower.
Walk
At this point there are
two ways to go about this. You can either inform them you're about to leave to
check out other deals, or make another counter offer. Making more counter offers
is not as productive, yet sometimes it works and they go down more. Usually they
won't though, so now you have to indicate your willingness to walk away. Inform
them that they'd have a deal if they'll be willing to work more on the price,
because their asking price is absolutely ridiculous. If their price is above
Kelly Blue Book, then at this point you might inform them that even KBB price is
lower than theirs. If their asking price is lower than KBB, don't tell them
anything about KBB. If you're faced with blank expression or absolute stubbornness
in going lower on the price, then you walk away.
Don't leave yet, just
stand in the parking lot talking on your cell phone for about 10-15 minutes.
Then come back, with an offer slightly higher than your previous offer and say
that you're willing to meet them halfway, (which should be about near your
asking price) and if they don't agree, you're definitely leaving.
At this point most will
resume the negotiation process. Some won't. This brings be to another point.
Leave
Just leave the dealership
for today. Sometimes you really have to let them feel like your business is
valuable, otherwise they don't really value it. The next day stop by again.
I found a better deal
As you re-initiate talks
the next day, inform the salesman that you arranged a good deal and going right
now to close it and give them the last chance to arrange something that would
suit you, because you really liked that car, but their asking price is
unreasonable. At this point the salesman is likely to restart negotiating
process. If they won't, then at this point nothing much can be done, since they
won't go any lower on it at this point in time.
Give it time
Sometimes if the
dealership won't budge, and you aren't in a hurry to buy a car, you can wait a
couple of months and see if they sell the car. Some cars literally stand for
months and months on the lot without being sold. At that point the dealership is
more likely to accept your price, since they DO need to sell cars.
Conclusion:
Used car salesman often
use all kinds of dirty tricks and deception to try to make you buy an inferior
product for inflated price. This negotiation process that we presented here is
very powerful, IF you are assertive and polite while you're doing your steps.
You general goal is to make it seem like you want the car, yet cannot agree to
their terms. If you're rude, then they are a lot less likely to be flexible.
Befriend the salesman, yet assertively negotiate and often times you'll get the
price you want or at least a fair price for the condition the car is in.
Don't allow the salesman
to make you feel guilty, appeal to your emotion or his situation. He's a
stranger to you and you simply want to get the car for fair price, rather than
create a new friend. Their niceness and interest in you is based in a lot of
cases only on desire to make a sale, rather than really help you buy a good car.
Be assertive, knowledgeable and friendly and they will respect you. And with
respect comes the ability to make them more flexible on the deal.
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