How To Make “Total Cost” Work For You When Negotiating A Sale

by drjim on September 18, 2008

How To Negotiate For The Car That You Want!

How To Negotiate For The Car That You Want!

I suspect that I’m just about every car salesperson’s nightmare. I’m the guy who decides what model car he wants by either personal experience (“I want another one just like that one”) or by reading every car review that I can get my hands on. I then go ahead and spend countless hours online and reading the paper comparing prices and availability. More often than not I’m looking for a used car so issues like mileage, year made, and how many previous owners come into play. Would you want to see me coming in the door of your dealership with my overstuffed folder of backup material?

When I arrive, the single issue that we have to talk about is price. Talk about your win-lose negotiations! Now in all fairness to the car salespeople, they do a good job of trying to expand the discussion from being just about price to a whole host of other items: extended warranty, quality of the repair shop, free oil changes, etc. However, I’m really just interested in talking about the price and I will keep pulling the conversation back to this one basic point over and over again.

Now you might think that this is a fairly poor topic for a blog that purports to be all about “good” negotiating. However, there you would be wrong. For you see my last car purchase went just a bit differently and in that there might be something for all of us to learn.

I had wrecked my previous car and so, unknown to the dealer, I had a serious need to buy. I showed up at the dealer with my paperwork in tow and sat down ready to start my typical price based negotiation. My salesman, Nick, didn’t seem to be too phased by my stack of paperwork nor my request to buy his car for $10,000 less than they had it listed for. Instead, he started off by asking if I had had a chance to shop at any of the other dealers in town. I said that I had. He then asked how that had gone. I told him truthfully that just about everyone seemed to be very nice and that they all had some play in their car prices. He then asked me if all of the cars that I had looked at had a dealer 1-year bumper-to-bumper warantee? I told him that some did and some didn’t. He nodded and said that all of his cars had this and that it was just proof that the car had been inspected and could be viewed as an insurance policy just in case something happened during the first  year. Without actually saying the words, he let me know that there was a value to this warantee.

Next he asked if I had only looked at cars that had had one owner. I said that I had looked at a mix. He said that when he bought a personal car, he always made sure that it had had a single owner before him – it just kept things simplier he said. Once again, he had implied a value to this feature of the car that I was interested in without actually saying the words.

Finally, he asked if all of the other car dealers had provided me with a CarFax report on the cars that I had looked at. I told him that some did and some didn’t. At this point in time he whipped out a CarFax report for the car that I was interested in and asked me to keep it. Once again, Nick was showing the value of how this car dealership did business.

In the end I ended up buying a car from Nick. I was able to get about $3,000 off of their listed price – not the $10,000 that I had originally asked for. However, I still felt that I was getting a good deal. Nick had done a good job of expanding my view of the deal that we were negotiating from being a “price only” deal to including the total cost efficiencies of the deal.

What were the total cost efficiencies for my deal? Well the 1-year bumper-to-bumper warranty had a value of between $1,200 – $2,000. The one owner feature is a little harder to quantify; however, I’ll put it at between $500 – $1000 (to cover hard use repairs). The CarFax report would have cost me about $35.00. Additionally, there was the cost for the time and money that I would have spent driving around to visit more dealerships. In the end, Nick’s ability to get me to see the big picture got him the sale and me a car.

How do you go about negotiating to buy a car? Are you only focused on price or do you allow other issues to be considered? The last time that you bought a car, did the sales person just talk price with you or did they try to expand the scope of the deal? Leave a comment and let me know what you are thinking.

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