School me on the art of negotiation

[frosty]

When buying a used car, how does one proceed in negotiation? Does it hurt to throw a lowball offer or is that rude and insulting? Say a car is being advertised for $10500. Common sense tells me that the seller is willing to go down to $10000, but say he wants to sell it by the end of this month and it's almost the next month. If I feel he really wants to sell it before the month is over (and there are only a few days left), would it be low of me to offer $7500 cash?

I don't want to start my offer too high and later feel like I could have saved some money, yet I don't want to go too low as to be not taken seriously--or insulting if the car is a really nice model.

Some people are naturally good, but I know I'm not and don't want to be taken adavantage of. I've watched Pawn Stars a few times and they lowball all the time. And the thing is some people will take the offer. I know with a car it may be a bit different.

I recently found an '04 Honda S2000 that the seller had listed sometimes in June for $12500 and then a month later down to $10500. That's a good price and wonder why it hasn't sold. It's a 1-owner car, with 110k miles. I'm very tempted even though the S2000 only recently popped on my interest/wish list. The Audi TT coupe is my #1 but now I have the SLK and Prius, cars that were not even on my list before.

[The Clk Man]

Times are tough young man, if you have the cash in hand, $7500 is a good offer. Remember he needs the money more than you need the car.

[davidmash]

My dad has always said that you can always go up but you can never go down. You are not going to be this persons friend. I would not worry too much about insulting them. If you offer $5k on a $10k car he might tell you to kiss off. More than likely he will comeback with an amount and then you start negotiating. If you go in at $9k you cannot go down to $8k unless you find other issues down line.

I have watched Pawn Stars a few times on TV as well.. Someone comes in with an item and they want $5k. He will offer them $1k because he needs to make money and it just won't fly at $5k. The dicker around a bit and he pays $1.2k or so.

Low ball. Not like they wont take you money.

[HuskyMan]

their are several keys to developing strong negotiation skills. primarily, never be afraid to walk away from a deal. in other words, if you find yourself falling in love with a car, house, boat, whatever, you will tend to overpay. and believe me, sellers will sense when you are falling in love and love can be expensive! therefore, act as if you could care less if he/she accepts your low-ball offer. be willing to walk away if he/she turns you down.

in addition, there is nothing like a desperate seller. someone who is closing a business, in the middle of a divorce, etc. may be strongly motivated to accept a low-ball offer. all business is negotiation. so what if a seller laughs at your low ball offer? if he/she balks, and you want to pursue it, ask them what price they would consider reasonable?

for instance, asking price for a car is $15,000. you offer $10,000. seller balks, you counter: "Well then, what might be an acceptable price?" Seller counter offers $12,500. you counter with $11,000. Seller says he will sell for $12,000 even. at that point you either accept the offer or reject. if you accept you just saved yourself $3,000, not bad for uttering a few sentences.

also, look the man/woman dead in the eye when negotiating, they need to know you are confident. when you make the offer, SHUT UP....first man to talk loses. silence is uncomfortable....that is what you want, to make the seller uncomfortable enough to lower his selling price.

[HuskyMan]

BTW, in my opinion the guy with the funny laugh on pawn stars tends to overpay. reason? you can see him falling in love with an item as he becomes emotionally involved.

On the other hand, I've witnessed cold-hearted, ruthless negotiators and the deals they walk out with are surprising. Many millionaires tend to negotiate in this manner. in other words, they can squeeze the buffalo right off the face of a nickel.

[BobK]

Holding green yankee dollars under someone's nose seems to help in game.

[WVOtoGO]

All good advice here, Frosty.

One thing I'd add is that you go back to post #4 and read it three or four times before you head out to negotiate/buy anything.

And as Robert touched on. So long as you keep the attitude that he needs to sell more than you need to buy, and you show that attitude, you’ll be fine.

I’ve learned many times from experience, that walking out on a deal is often the best move. Sometimes it may not seem so at the time, but in time you often realize it was, and why.


- Shelby

[Pavka007]

The part about SHUT UP from post #4 (Huskyman) is so important, I can't stress it enough. One other valid point from above is have cash in hand and don't be afraid to take it out of your pocket and put it down on the table. The visual effect of the green bricks is unstoppable. Make sure that you have $50's and $20's so they look more as a volume.
Good luck.

[TylerH860]

I can't post anything better than huskyman, and I'm a car dealer... Great advice for dealing with individuals.

For dealers, first rule, don't even bother with the high overhead big dealers unless you're shopping for something barely used. Independently owned, owner operated ones are the way to go. Some will jack their prices up high for a credit rat and suckers, while others tend to charge enough below market value so they can turn their cars quickly and move on. No need to do a back and forth with these folks. Offer what your comfortable with and stand your ground. They will counter, of course, and put the same silent treatment pressure. Keep to your price, tell them there are plenty of others out there and this is what you feel comfortable with paying today. By the end of the exchange, they will either accept your offer or you'll leave knowing what their bottom dollar is. A good dealer won't let you go without doing either of those things. If they don't accept your offer you can move on or sleep on it; its really a stress free way of doing things.

I have purchased many vehicles from dealers this way and the unorthodox approach has served me well. Why bother playing haggle games when you know they are going to give everything they can to keep you from walking.

[WVOtoGO]

Originally Posted by TylerH860

I can't post anything better than huskyman, and I'm a car dealer... Great advice for dealing with individuals.

For dealers, first rule, don't even bother with the high overhead big dealers unless you're shopping for something barely used. Independently owned, owner operated ones are the way to go. Some will jack their prices up high for a credit rat and suckers, while others tend to charge enough below market value so they can turn their cars quickly and move on. No need to do a back and forth with these folks. Offer what your comfortable with and stand your ground. They will counter, of course, and put the same silent treatment pressure. Keep to your price, tell them there are plenty of others out there and this is what you feel comfortable with paying today. By the end of the exchange, they will either accept your offer or you'll leave knowing what their bottom dollar is. A good dealer won't let you go without doing either of those things. If they don't accept your offer you can move on or sleep on it; its really a stress free way of doing things.

I have purchased many vehicles from dealers this way and the unorthodox approach has served me well. Why bother playing haggle games when you know they are going to give everything they can to keep you from walking.

Yep -
Most automobiles that I’ve purchased over the years have gone pretty much the same way.
I walk in and tell them what I’ll pay, cash. They say they can’t do it. I hand them my card and tell them to give me a call if anything changes. I walk out. Sure enough, a day or two later, they call back with some line about how things have changed and they think they can pull the deal off “without getting into too much trouble from the boss.”

- Shelby

[frosty]

Great advice! Thanks! This is good encouragement and confidence builder.

I was wondering about the money part. How does one go about carrying thousands of dollar and not feel paranoid? Do sellers mind if you go to your bank with them to withdraw once a deal has been struck? Or will they even accept a check/money order and you go with them to cash it at their bank? Up to $3k, I'm fine with bringing ca$h, but anything over that I prefer one of the two methods. I've never bought a car from a private seller where I had to bring loads of cash.

[aklim]

Originally Posted by frosty

Great advice! Thanks! This is good encouragement and confidence builder.

I was wondering about the money part. How does one go about carrying thousands of dollar and not feel paranoid? Do sellers mind if you go to your bank with them to withdraw once a deal has been struck? Or will they even accept a check/money order and you go with them to cash it at their bank? Up to $3k, I'm fine with bringing ca$h, but anything over that I prefer one of the two methods. I've never bought a car from a private seller where I had to bring loads of cash.

First of all, test it and get it tested by someone who is a professional. Harder to argue. When I go buy a car, I use my scanner to check for any history codes that aren't coming up as a CEL. Check the compression of the engine. Also, check the fluids. If the trans is too clean, walk. He probably changed it as a "hail mary" fix. These checks can help you decide how much to offer.

As to the money part, no way I would take a personal check from you. Obviously, the best thing is to take the person to the bank and give him the cash from the bank. If you peel off $10K, I would be suspicious about whether the money is real or not. maybe you put a bunch of real bills on top and bottom of the stack.

[PaulC]

Originally Posted by WVOtoGO

Yep -
Most automobiles that I’ve purchased over the years have gone pretty much the same way.
I walk in and tell them what I’ll pay, cash. They say they can’t do it. I hand them my card and tell them to give me a call if anything changes. I walk out. Sure enough, a day or two later, they call back with some line about how things have changed and they think they can pull the deal off “without getting into too much trouble from the boss.”

- Shelby

BTW, the "trouble from the boss" stems from allowing a cash buyer to leave the lot without a car the first time.

Here's my favorite experience with car price negotiation - all true.

Around 1990, a friend of mine was just starting a family and wanted a big, old-school American family sedan. He liked the 1990 Mercury Grand Marquis and I accompanied him to the closest Mercury dealer. This was going to be a cash deal - no trade. "Ralph", the salesman who approached us, was old-school as well, right down to the razor-cut hair and gold pinky ring. He laid on the high pressure, and while my friend liked the car, we weren't too fond of the progress of the price negotiation. We had enough, and told the salesman that we were going to lunch and would "think about it". Thinking quickly, the salesman tells us to take the Grand Marquis to lunch with us, no doubt to ensure that he would have another crack at my friend once we returned.

Okay - so the dealer plate is slapped on the back of this light blue metallic G.M., and my friend motions to me to get behind the wheel. We pull out of the car lot and I inform him that lunch will be delayed as we're going on a little road trip - to the next Mercury dealer, about 15 miles away. My buddy, although no stranger to the word "chutzpah" kept saying "I can't believe it." as we drove down the highway.

We arrive at the lot. I motion the nearest salesman over to the GM and while he's staring somewhat quizzically at the dealer plate and window sticker on our ride, I inform him that we're test-driving this car from the other dealer, but we're not happy with the price. What can he do? He huddles with my buddy, and in about 10 minutes, the sales paperwork begins to be executed, and a silver G.M. is whisked into the prep area.

Now - someone has to return to the first Mercury dealer, drop off their car and pick up the car we arrived in. Me. I drive the car back to the dealer, catching the salesman on the phone, tell him that my friend decided against the car, and leave before Ralph can react. I speed back to the other dealer, and the silver G.M. is plated and ready to go. I follow my friend on the ride back to his house, which will take us past the original Mercury dealer. We pass the dealer and stop at the next traffic light. Sitting in the next lane is a new Lincoln Town Car with a dealer plate, piloted by...Ralph. From my vantage point behind him I chuckle as he stares at my friend, who was oblivious to his presence.

[LUVMBDiesels]

^^^ Great story!

I did a similar thing - without taking the actual car to the other dealer back in 1992 when I bought my Subaru - I ended up working two dealers into a frenzy by going back and forth between them for a week. Got a car that stickered for $23k for 12.5!

I was never so lucky again...

For private sales I usually bring the asking price in cash, but in two pockets. I lead with what I want to pay saying that this is all I have. If the seller balks, I walk away, then come back in a few minutes with a bit more. Got the Volvo recently for about a 30% discount that way...
The trick is to show him the $$ the old saying is right
MONEY TALKS BS WALKS

[TylerH860]

An old thread but a goodie about dumb things car salesman have said...

http://www.peachparts.com/shopforum/showthread.php?t=232965&highlight=Jeep+Rubicon