CHAPTER 15

You will SAVE BIG by buying used. You may even SAVE BIGGER by buying a dark horse car from an individual owner. But if you want to SAVE BIGGEST, know this: Skillful negotiators pay 10 to 15 percent less, on average, than those who just accept the seller’s price, according to Edmunds.com. The key is to research pricing carefully, down to the nickel for every option on the vehicle you want. Then it’s time to haggle.

In this chapter, I’m going to tell you, step -by-step, how to bargain for the best price. We’ll make it a game—a game where you save more than just Monopoly money! You SAVE BIG!

In this chapter, learn to SAVE BIG by:

• Researching pricing down to the last detail.

• Keeping your trade in vehicle a secret.

• Setting the opening offer just right.

• Haggling with daring and drama to win!

• Saying no to pricey add-ons you don’t need.

Research Pricing

Here’s how to proceed if you want to get an A for effort and SAVE BIG. When you researched the best and worst used vehicles through Consumer Reports and Edmunds.com, you also learned a lot about vehicle pricing. I like Edmunds’ True Market Value price quotes because they attempt to factor in what vehicles are actually selling for in the marketplace. I also like them because they’re usually lower!

It’s not enough to look up the base price. These websites will tell you how much to add for every last option—like the sunroof, the souped-up stereo, the fancy wheels, and so on. You will also see how much to add or subtract based on the vehicle’s mileage and condition.

I recommend that you research the pricing of more than one car. It’s a good idea to identify multiple cars at different locations that you’re interested in. That way, when it’s time to haggle, you won’t be in love with just one vehicle. You’ll be able to walk away if you don’t get the price you want.

That reminds me of what my friend Terri T. says about dating. Her philosophy is “Date a pair and keep a spare. ” In other words, have three options! For Terri, it works with men and she drives a hard bargain on vehicles, too!

Keep Your Trade-in a Secret

Do not tell dealers you have a vehicle to trade in until after you have negotiated a price for the car you’re buying. (Of course, you’ll want to consult some of the same car websites to determine the value of your old vehicle.) When the trade-in is part of the deal, the salesperson can use that as one more number to play around with. It’s a sliding scale. They give you an enticing low price on the vehicle you’re buying, but a corresponding low offer on your trade. Or they may offer big bucks for your trade, then charge you more for the car you’re buying. You want to conduct two separate transactions to avoid all this rhetoric.

How to Haggle

Once you’ve researched pricing, it’s time to talk price with the seller. Try to relax and enjoy haggling. It’s a game. After all, as I’ve said a zillion times, you are already SAVING BIG by buying used. That takes the pressure off. Remember, the person selling the vehicle needs you more than you need them. There are more cars than there are customers. This should give you confidence. Dealerships may be expert negotiators, but they are desperate to make their minimum sales quotas. And if you’re negotiating with private owners, they are probably desperate to get their weekends back.

The Opening Price

Your goal is to pay a price somewhere between the low trade-in (wholesale) value and the high retail value listed in the pricing information you have gathered. Set a firm number that you will not exceed. Obviously, the closer you get to the trade-in value, the more of a rock star you are and the more you SAVE BIG.

Some experts recommend making your first offer 15 percent less than what you are really willing to pay. Another technique is to take the seller’s price and knock it down based on all the repairs your mechanic has told you the vehicle needs. Whatever you do, keep in mind, the first number you throw out defines the negotiation. You can’t go any lower after that.

After you make your initial offer, bite your lip, dig your nails into your hands, or do whatever it takes to make yourself shut up while the seller ponders your offer. You want that pregnant pause, that uncomfortable quiet. Do not fill it. Your goal is for the seller to be the one to squirm and shatter the silence by accepting your offer.

Uncle Sam Will Pay Part of Your Parking

If the vehicle you’re bargaining so hard for is a commuter car, did you know that the federal government lets you use pretax dollars to pay for parking? It’s true. You’d think the feds would only subsidize commuters who use green options like mass transit. But no. The money is automatically deducted from your paycheck. Ask your employer and parking vendor to participate if they don’t already. One company that processes the paperwork required is Wage Works, www.WageWorks.com.

The Next Move

After you have stated your offer, the seller will either accept your offer, make a counteroffer, or reject your offer. If you get a flat-out rejection, then simply ask “Okay, so what’s your best price?” If the seller counters, make a show of flinching, of wincing, like the counteroffer is painfully unreasonable. (That’s right, folks, this is your big chance to make money as an actor!) Never accept the first counteroffer. Instead, name your next price, which you should raise by a smaller increment than they just lowered theirs. For example, if the seller just dropped his price by $500, you would raise yours by $400.

Feeling uncomfortable? Blame your hard-nosed negotiating on somebody else. As in, “I’m sorry, but my spouse will kill me if I pay more than X dollars.” This is the same good cop/bad cop technique many car salespeople will try to use on you, only they’ll say “My manager said no.” Sound familiar? Why not turn the tables? It works on private owners too.

If your negotiations stall, one fabulous theatrical tactic is to leave. You don’t have to turn on your heel and walk out in a huff. Simply tell the seller you were prepared to buy a car today but you just don’t feel the price is appropriate. Some experts recommend leaving three times during the process. That’s a lot of drama, but it’s quite possible, especially in the post -2008 economy, that you will receive a callback soon with an offer to drop the price some more.

Closing the Deal

If you are just over the maximum price you want to pay, but can’t quite get there, there’s one last option before you bail out. Instead of trying to get the car for less money, try to get the money to buy more car. In other words, ask for extras like new tires, a great stereo, replacement floor mats, or anything else you genuinely want.

If you’re buying at a dealership, be sure you and the dealer are clear on whether tax, title, and fees are included in the figures you are slinging back and forth. Years ago, when I was more tender and naive, I thought I had negotiated a great deal on a car, but I hadn’t specified that mine was an out-the-door offer, meaning I wanted it to include taxes and fees. The dealer added those in at the end and I was so exhausted from the whole skeevy process that I agreed. That cost me more than $1,000.

Once you make a deal, don’t sign anything until you’ve read it carefully. Ideally, take the paperwork out to your old car, to a coffee shop or some place where you have privacy and no pressure. Look for pricey add-ons like “paint protection,” “undercoating,” and credit life insurance. You don’t need or want these. Cross them off. If you want other things added to the deal, insist that they be put in the contract, in writing. Verbal guarantees are worthless.

Once everything is in order, take a deep breath and sign on the dotted line. And remember, YOU CANNOT RETURN A CAR!

Real Results

Since effective negotiators knock an average of 10 to 15 percent off the price of a used vehicle, let’s do some math to get an appreciation of how much some good haggling helps your bottom line. I’ll pick a percentage in the middle—12 percent. Let’s see the savings:

Benefits of Bargaining Hard

Original asking price	$ 15,000
Price after haggling	13,200
BIG SAVINGS =	$ 1,800

I’d say all the drama is worth it! A couple of hours outside your comfort zone can save you nearly two grand or 12 percent off the purchase price.

BIG TIPS

• Pursue more than one vehicle, so you have options.

• Negotiate the price of the vehicle you are purchasing before revealing you have a vehicle to trade in.

• Bite your tongue, shut up, and even walk out when you are negotiating.

• Study the contract for pricey extras before signing on the dotted line.