Negotiations Training

The Negotiation Everyone Loves to Hate: Negotiating for a New Car

Negotiations are a reality of life. On any given day, we must take part in one negotiation or another. Some negotiations are obvious, such as the ones that take place in the business world over contracts, sales order or joint ventures. Others are not as "noticeable" when we have to negotiate with family members on where to take a trip or deal with a neighbor whose tree limbs may be hanging precariously over our house.

Most people face a certain level of discomfort when negotiating but just about everyone can point to the car buying process as the most uncomfortable negotiation situation possible. Why is this so? For the most part, almost everyone who has ever bought a car has had a bad experience. Whether dealing with shady sales reps, insincere sales promotions or hardball financing departments, buying a car is, more often than not, quite unpleasant. Who can blame people for this feeling? While some automotive industries may beg to differ, the stark reality is that a great deal of those individuals tasked with selling cars to the public do not act in the most ethical or dishonest way. If that wasn't the case, the industry wouldn't have such a bad image.

We've put together some basic information that will help you when you purchase your next car. Thanks to the Internet, valuable services like Autobytel and Edmund's are now providing consumers with information they can use to buy a car and, in some cases, eliminate the negotiation process. Below are a few tips that will help you the next time you step on the showroom floor:

Take a Reality Check - This is the first step in dealing with a negotiation. You know you don't like to negotiate with dealerships. That's fair and completely understandable. What you can't do is continue to dwell on this and allow it to cloud your judgment. Your goal when dealing with a dealership is to get the best deal possible. Accept this fact and walk in with confidence.

Stand Your Ground Early - No one pays MSRP and yet dealers try to wrangle you into paying sticker price all the time. If you're looking at a car, make it clear to the sale rep that you are not willing to pay sticker price. This can be done in a very considerate and non-confrontation manner. The sale rep should know that you do want to buy a car if they are willing to work with you on a price.

• Be Ready to Buy - You have more power if you are ready to buy a car during your discussions. If you are the proverbial "tire kicker", you have less leverage. Dealerships are more likely to bargain if they know you are willing to drive out with a new car that same day.
• Dig Before Shopping - As mentioned, web pages like Edmund's and Autobytel are wonderful as they empower consumers with background information on dealership costs, invoice prices, the costs of options, etc. Spend some time researching the vehicle you'd like to purchase. In many cases, you can enter a dealership equipped with all the information you need to make the first offer on the car you want.
• Don't Fall into the Payment Trap - Dealers love to get people to tell them what they want their payment to be. Technically, they can come up with any number with creative financing. Want to pay only $300 a month? Sure... we can do that. Here is the paperwork for a seven-year note...
• Don't Be Afraid to Compare - Three Ford dealerships may sell the same trucks but that doesn't mean they want to help each other out. Don't be afraid to compare dealerships and play them off of each other. If one dealership offers a better price than other dealership, see if that second dealership will match or beat the price.
• Arrange for Outside Financing - You can often better financing rates on your own. Do some research to find out if you can get approved for financing ahead of time so that you can walk in with a "blank check" in hand. This will provide you with more leverage when you're simply seeking to negotiate based on the price of the car. Don't shut out financing as some dealerships truly can provide you with 0.0% financing deals. Simply check the fine print - some of them may require quick payment or drastically high credit scores.
• Settle on the Big Number First - It's best to settle on the sales price before discussing financing or trade-ins. Negotiate your drive-out price and then deal with the details. Simple tell them you're not sure just yet.
• Ask for Extras - Most dealers will throw in low cost items like full-size spare, tinted windows or other options. It never hurts to ask.
• Don't Be Afraid to Walk Away - Never get emotionally attached to a car. If you're about to get roped into a bad deal, feel free to walk away from the negotiating table.
• Beware of Tactics - Many of the sales reps you'll deal with have years of experience using shady tactics like "Good Cop/Bad Cop". Read up on our information on tactics to be able to counter dishonest negotiators.