Negotiating
Assuming you’ve got this far and the car has passed our inspection, it’s time to consider making an offer.
Ready steady, go….no, hang on a minute!
It may seem obvious, but an unwritten protocol when buying a car is: “Only make an offer if you can stand by it.”
If you are still unsure or need to ask advice or permission from your wife/husband/mom/dad/bank manager, do not begin negotiating. It will only inflame the seller if, after making an offer that was accepted, you then qualify your offer based on the response of someone else. Be clear from the start if you need to talk about it with someone else, and remember to do it before you make an offer.
Many people are uncomfortable negotiating and prefer to leave it to someone else. In reality though, negotiating is a simple and necessary skill that can be learned just like any other. The guiding principles below will help you negotiate correctly and ultimately reap the rewards. Follow these principles closely to ensure your smooth transaction.
If you are really happy with the car after viewing and test driving, make sure you keep this to yourself. Appearing happy & excited will only cost you money. The seller will see your excitement & stay rigid on the price. Being calm and relaxed will keep the seller guessing if you are interested in buying.
Be Friendly but Firm
Before we start to negotiate buying a car, we need to assess the landscape, so to speak:
Does the vendor look desperate to sell?
Is the car realistically priced?
Does it have obvious faults? (When I say “obvious,” I mean faults that both you and the seller agree are faults. One man’s scrape is another man’s wear and tear.)
Has the car been on the market for a while?
These are four questions you need to ask and answer yourself, before you make an offer and draw a line in the sand.
If the seller seems fairly eager to get the car sold quickly, you can immediately consider a low opening offer.
Let’s assume, for example, that you have checked over a car. It has a couple of scrapes, a scuff mark on the bumper, and two tires are fairly badly worn – all things which we know can be common faults in a used car.
I like to begin negotiating with an opener like these:
“Well, what’s the least you would accept for the car?” or
“Have you decided on a final price that you would take for it?”
All may not be as it seems….
After you have listened to the seller’s minimum price, it’s time to discover if it really is his minimum price! Often people will quote an initial figure which gives them some room for maneuvering. For example:
The seller has a car advertised at $6250 and when you ask him, he says he’ll accept $6000 for the car. He may well be thinking, “Well, if I ask for $6000 maybe I’ll get $5750 or $5500.”
It’s now up to you to figure out if his final price really is his final price. Begin by either mentioning the (agreed) faults or by simply walking up to the worn tires and looking them over – but don’t say anything. The seller knows the faults perfectly well and does not need reminding. Do the same for the scratches and remaining faults. Basically what you are doing here is reminding the seller that the car is not perfect and he would do well to consider reducing the price, given the flaws and your awareness of them.
If all is going well until now, stand back from the car and mention that it does have a few faults. If the seller’s real final price is lower than his stated price, his next sentence is generally something like the following:
“Well, what would you offer?”
“What do you think it’s worth?”
Now with the ball in your court, you have a few options:
You can offer him a few hundred less than he’s asking to take into account the faults.
You can offer him a lot less, $1000 or so, hoping he may be overestimating the faults.
You simply stay quiet, leaving the seller on edge thinking, “Is this person going to buy or not…”
Normally I like to employ the third option. This silence can bring the seller to their senses. He’s thinking, “Do I want to lose this sale? What if this person walks away?”
Take a Deep Breath
If you’ve reached this stage of the process with all going smoothly, it’s time to lay your cards on the table. I often like to cloak my offer in the following way:
“I like the car, but it is a little out of my budget. I was trying to stay around $5000.”
Framing the sentence like this has two advantages: firstly, you are not going to upset the seller if he really will only take $6000. After all, everyone has a budget to work within. Secondly, if the seller is really desperate to sell, your “offer” of $5000 may be a light at the end of a tunnel for him.
The reaction of the seller here will determine your next move. A reply of “I’m sorry but this is my final price” means you are not going to go far here. Maybe an offer of $5800 or $5900 will clinch it.
A reply of something like “Hmm, $5000 - it’s a lot less than I’d hoped for….” will give you some encouragement. My favorite reply is “Well I could maybe stretch it to $5100”, followed by another silence.
At this stage with the deal coming to stalemate, a common and effective technique is to “split the difference” or “meet in the middle.”
Let’s say you are offering $5100 and the seller will not budge from $5500. Make a suggestion that you both meet halfway. You offer him $5300, meaning you go up $200 and he drops $200. This has a good psychological effect, as you both feel that you have moved a similar amount. In my experience it closes the deal in a friendly manner, with both sides feeling that they have a fair deal – everyone leaves happy!
It’s important to note that this sequence will happen only if the atmosphere is right. I mentioned at the beginning of the blueprint that your attitude from the start is important. People like to help people they like – make sure you’re one of them!
