Negotiate Anything with These Four Tips
I am one of the few people I know who likes the car buying process. I enjoy marching into a dealership armed with information and prepared to strike a bargain. How do I do it with such confidence? Follow these tips and you’ll be able to negotiate anything from a salary increase to the purchase price of your next home.
•1. Know your desired outcome
This is the same thing as Steven Covey’s “Begin with the end in mind.” I let money leak out of my life in lots of little ways (my weekend coffee habit, sushi lunches, and my love of books are some big weaknesses), but when it comes to major purchases or negotiating my income - I do my homework and prepare.
For example, when I bought my last car, I looked into resale values, safety ratings, and reliability before choosing a make and model. I didn’t step foot on a car lot until I knew exactly what I wanted to purchase.
•2. Do your research
You don’t want to offend the party you’re going to be negotiating with. You should to appear to know at least as much as your “opponent” when entering a bargaining situation. In the example of my auto purchase, once I settled on a specific car, I researched the heck out of it. I hopped online and learned its average sales price, the differences between trim options, and which dealerships had the model I wanted with the features I had chosen.
•3. Know what you’re willing to compromise on before you start
Successful negotiation is about compromise. Before going into any negation situation, take a minute and make a list of things that you’re willing to bend on and identify your deal breakers. When I was buying my last car, I didn’t care so much about the color, but I knew that I wanted a sun/moon roof, luggage rack, and fog lights - and I knew that I wouldn’t pay more than $24,000 for the whole package.
•4. Be willing to walk away
This can be the most challenging part, especially if you’ve completed the three previous steps and you have a lot invested in the outcome. When the stakes are high (buying a new home and negotiating a dream job come to mind), it can be tempting to cave in and accept an offer that’s less than optimal. Good negotiators will check emotion at the door and leave if they don’t like the counter-party’s “best offer.”
That’s what I did when the car dealership tried to guilt me into paying too much for a car - I got up and left. Two days later, the “manager” called with an offer that fit my requirements.
I used the same technique when I landed my last job. The key is to do your research and be confident in your knowledge and abilities - then anything is possible.
Stumble it!
January 29th, 2008 at 9:30 am
Nice Post!
When I bought my truck I had to do the same thing. Walk Away. One day later I got a phone call with an offer. Put $500 down, they made the vehicle a ‘certified used car’ - a better deal for me, and a MUCH lower interest rate.
You touched on this, but it’s also important to focus on the pice first. Then worry about your monthly cost. That was one place I was unprepared, but lucked out.
January 29th, 2008 at 11:25 am
#4 is the one thing people miss. They come in and fight and then figure that they don’t want to waste the time…
This is especially true when you only have 1 or 2 choices in a town….Don’t settle be prepared to travel.
The last thing about the car piece is…NEver talk about the payment. That is how they will get you. They will say fine, I’ll get your payment down to $200, and stick you in a 80-month loan! Only talk about the purchase price and have financing in place when you walk in!
January 29th, 2008 at 11:52 am
#4 is pretty much the hardest part, I think. If I’m negotiating for something, I want it. And if I want it, I don’t want to walk away. But you’re right, of course, without #4 they’ve got you.
January 29th, 2008 at 4:16 pm
I am always boggled by two things when it comes to cars:
1) Buying New - depreciation kills…especially on a shiny new car. Buying used is the only way to go.
2) Paying more than $18K or so (preferably less). What a colossal waste of valuable funds…unless you’ve got money to burn (betting most who read this do not).
January 30th, 2008 at 4:14 am
A good list.
I wuld suggest to include Dr. Covey’s “seek first to understand then to be understood’.
I have seen many cases where one person keeps on talking and ends up with no idea of the other person’s standpoint.
February 1st, 2008 at 11:00 am
[…] Negotiate Anything With These 4 Tips - The art of negotiation is not used as much as it should be. Virtually everything can be negotiated, and for large purchases, doing it properly can save you a lot of money. […]
February 1st, 2008 at 2:59 pm
I negotiated a 33% discount on my luxury watch by doing my research, setting my bottom line, offering cash, and walking away.
good post.
February 4th, 2008 at 8:14 pm
I have no problem just walking away if the deal doesn’t work for me. It’s also a great way to gain the upper hand.