Negotiating price on a new or used car is something that some people seem to have a natural ability for, and yet others have a very difficult time with. However, the old adage that one should never just pay the ticket price on a car is still very true, and being willing to haggle can pay off very well.
For those who aren’t used to price negotiations or who have a difficult time figuring out where to start, here is a basic guide to getting a better price on the vehicle you may be contemplating the purchase of.
First off, ascertain what the ticket price of the vehicle is. This is the seller’s starting point, so it is very important to know when beginning your negotiations. Once you have established what that price is, figure out what you would prefer to pay for it.
Remember to be reasonable with your expectations. For example, bringing the price down 50% is not a realistic expectation. 10%, on the other hand, might actually happen. Keep in mind, the dealership or seller will still need to make their money off of this deal too.
After determining the price you are aiming to pay for the car, find a number to start your negotiations at. The seller has already done this by determining their ticket price, so now it is your turn. A good rule of thumb is to set your starting point a little bit further away from what you want to pay for it than your goal price is away from ticket price. For example, if a used car is $2,500 at ticket price, and you would like to get it for $2,200, start out asking for about $1,800. Yes, this falls into the category of an unreasonable request, but you’re leaving yourself plenty of room to go up before you hit the price you want to pay.
The next stage will be the actual haggling. You and the salesman will state your starting points, and go from there. The best bet is to move off of your starting price in very small increments, of say $50 or $100. Don’t yield ground too easily, because this will tip the other party off that you aren’t seriously trying to get it for the prices you’re asking for. This then becomes a disadvantage. Remember, if you can convince the salesman that you really do just drive one hard bargain, he or she may give in and close the deal with you before you even reach the price you aim to pay for the car. If you reach that point, and still have not secured a close on the sale, you will have one of two options. Either, you can state the price that you have planned to pay for it from the start, and mark it as your final offer, or you can go up one more price level. Ideally, in either event, you should mark the offer as your final one. Going further than one price increment above your planned price tells the seller that you can be guided to pay a price at or near the ticket price for the vehicle, and the game then starts to slip out of your control. If played correctly, these series of negotiations will result in a closing price considerably lower than what is being asked for the vehicle originally.
There are a few more factors to keep in mind before engaging in the price battle. Firstly, never give the appearance of liking the car too much. This will tell the person you will eventually have to bargain with that you can be made to pay a higher price for it. If the car is used, thoroughly inspect it with your salesman present, being sure to politely but precisely make a verbal note of every piece of damage, cosmetic or otherwise, that you encounter. This will make the other party aware that you have noticed flaws in the vehicle that they would prefer you to overlook. This will also give you a very slight psychological edge by convincing the salesman that you know the tricks and how the game is played. The reason that this strategy is so effective is because it is actually one of the techniques that car salesmen use in haggling for value on a trade in, their goal being of course to bring that value down in the mind of the seller. By doing this, you will stand a chance of convincing them that they are dealing with an equal match in the negotiating ring, even if, in fact, you have never haggled for anything in your life.
If you are considering purchasing a new or used car, try putting these strategies into play. Chances are, you will walk away with a much better deal because of it. Even if you are only slightly successful, the odds are that you will still save at least some money or your purchase. No matter what the outcome, remember, anything is still better than paying the ticket price on the car.