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Negotiating The Selling Price

You take a seat in the car salesman's office. You settle back. And now the real games begin. He takes out a "customer proposal form," otherwise known as the "write-up" and asks you for some pertinent information: your name, address and so on.

Then he casually hits you with this: "So what have you budgeted for your monthly payments?"

You think for a moment. He waits for your answer. You swallow hard, then reply, "I suppose I would feel comfortable at $300 a month."

A look of concern appears on the salesman's face. "Hmm, that seems a bit low," he says. "You can stretch that monthly payment up to...?"

Then silence. You think about your budget. He waits patiently. Finally you reluctantly answer, "I guess I can squeeze out $325 a month."

BAM! You just bumped up your own bid by $25 per month. $25 times 60 months equals $1,500. In one smooth move, he got you to raise your opening bid by $1,500! And he's just getting started.

What's important to realize here is not only how slyly and easily he got you to raise your bid, but this:

No matter how much money you offer, the car salesman will probably say it's not enough.
Remember his goal: he wants to sell you a car at the highest possible price. The more you pay, the more he earns. So while he's acting like he's your best friend ("My job is to help you get what you want."), he's actually working hard to extract as much money as he can from you.

Now he shakes his head. "That still seems low," he says. "Is that the most you're willing to spend to own that beautiful car?" You reconsider for a moment, then shrug. "I really can't afford any more than that," you explain. "I'm stretching my budget as far as I can."

"OK, I'll see what I can do," he says as he stands. You hand him the keys to your trade-in so it can be appraised. He smiles. "Wish me luck." "Good luck," you offer hopefully.

He walks to the Sales Manager's office and disappears inside. And you sit and wait. And wait. Negotiating is a game of strategy and some dealerships' strategy is to wear you out. So they may keep you waiting simply to chip away at your stamina. Besides, you couldn't leave if you wanted to. They've got your car keys.

After awhile, the salesman returns. He smiles and tells you he's got a great deal for you: you can drive home in that car right now for only $412 per month and with a down payment of only $3,500. Then the salesman leans back and waits for your reply.

No matter what you say at this point, you're sunk. They've got you right where they want you. That's because this is a shell game. If you want more money for your trade-in, that's fine. But your monthly payments will go up. If you want lower monthly payments, that's fine too. But your down payment will go up. The salesman explains all this to you in a manner that actually makes this crazy game seem logical. He expertly explains away any and all of your objections with well-rehearsed lines and phrases, all the time insisting that this deal is too good to pass up.

Then, after all of his explanations, he asks you for your final approval. "All you have to do is say 'yes' and that car is yours," he says temptingly. "You can drive it home right now."

You think for a moment, then explain honestly, "I'm sorry but I can't afford $412 a month."

So the salesman replies: "We really want to earn your business. Just tell me what it will take."

You answer: "OK, I'll go $375 a month. That's my final offer."

The salesman replies: "I certainly can't promise you anything, but let me ask you this: if I can persuade my manager to get your payments down to $375 a month, will you drive that car home today?"

He's asking for a commitment. "Well, I've come this far," you think to yourself. "It would be a shame to walk way with nothing to show for it." So you manage a nod of approval. "Sure, I'll drive it home today."

The salesman smiles, stands and strolls back once again to the Sales Manager's office . . .

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