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Negotiating with a Car Salesman

Sandy Sbarra
© Scotwork NA

Some people love not only the sensation of owning a new car, but also the process of buying that new car. By that, I mean stepping into the ring with a worthy car salesman and grinding them down through an elegant, well-planned negotiation strategy. Then there are others, who get heartburn at the very thought of it. I find myself in the former camp — I actually think it’s fun.

Last week, my daughter and son-in-law moved back home from Colorado. Her car died on the way back, so we had to get her transportation. Based on their financial situation and my desire to get her into something fairly new, we decided that leasing was her best option. Her job was to tell me what she liked and carry the monthly payment. I agreed to provide the down payment and costs/fees for taxes, registration, etc.

We struck out at the first two dealerships, because I told them what type of payment she could carry and that we were interested in the SUV they had advertised at those rates. Unfortunately, the SUV turned out to be a “loss leader” designed to do nothing more than get customers into the dealership, and the dealers kept ignoring the type of payment that I told them was possible.

We then ended up at a third dealership. My daughter really liked their SUV. Before she drove it, I told the dealer that I wanted to confirm that the lease payment was affordable for her. He asked what she could pay, and I responded with a figure that was reasonable ($225 a month) but not too close to her limit, because if you start with your limit, they will always go past it.

After taking two test drives, my daughter decided that she liked the model one step up from entry level, since it came with some nice additional options. The salesman told us that, with the amount down that we offered, the payment would be $298 a month. Too high! I asked what the payment would be if we offered a little more down, and his response was $269 a month. 

Having enough information by this point, I began the negotiation in earnest by saying, “If you drop the payment to $250 a month [still not my daughter’s limit], we will provide $5,000 for taxes, registration, prep, and a down payment.” His response was classic “haggle.” He said, “Could we meet in the middle?” The way I see it, haggling is poor form and it weakens your position, especially if the other party responds with a proposal, which I did. A true haggle would have made the payment $259.50. Instead, I countered by saying, “OK, $255 a month!” — still not my daughter’s limit. He laughed at my response, which signaled to me that the answer was not “no.” 

Having already gotten the go-ahead from my daughter, I said, “If you accept $255 a month with $5,000 down, we will buy the car.” He wrote all of that down and he asked, “Would you put your name to that offer?” By this point, the signal (well, kind of a stunt, actually) was that the offer would be approved. I saw this as a closing opportunity, so I told him, “If I sign that, I expect the manager to approve the deal with no further changes.” He came back and shook our hands.

Ultimately, if you want to get more out of these types of negotiations, here are a few things to remember . . .

  • When you start to negotiate, never go near your limit, especially when asked, “What's a comfortable payment?” They will always present a deal or car that surpasses the number.
  • “Haggle” is a weak way to close a deal, yet it’s common in negotiations, and never more so than when purchasing a car. The half of what you get may not be worth having. Instead, think of something else you want to trade for to close a gap — or, as I did, if the dealer proposes the haggle, respond with a counterproposal that’s more favorable to you.
  • When you do hit your limit, don’t be afraid to walk out. They’re the ones who want to sell a car, and there are so many dealers to choose from.

If you’re like me and love negotiating, you’re now prepared to enter the ring and come out a winner. And if the very thought of this process gives you heartburn, you might be surprised by just how good a well-planned negotiation strategy will make you feel as you’re driving away.

Let Us Help You Drive Your Next Deal.

In the showroom or in the conference room, every negotiation requires a unique combination of tactics, tools, and good old-fashioned know-how. Uncertain about how to best prepare for your next negotiation? We can help! Drawing on 45 years of real-world negotiating experience, we’ll assist you with getting better deals, saving time, and creating value for all involved — not to mention preserving and even strengthening relationships. Let us partner you with one of our advisers, ensuring that you’ve got the broadest view of your deal.


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