The salesperson may be nice or not nice, solicitous or not, but the bottom line is that he/she will take the buyers for as much as he/she is able to.
The salesperson is an effective cooperative negotiator and appears to be an "extrovert" personality.
+===+Background to negotiation
Factors that enter into the deal:
1. whether I need financing (and know the score)
2. whether I am trading in a car (and have shopped it around and know its value)
3. whether I am aware of the mark-up on the car and its options
4. whether I am willing to do my homework and to hold my ground and if necessary to walk away (at least temporarily) to get hundreds of dollars off of the price.
5. what is general economy, consumer interest rates, demand for that particular model, time of year.
+===+Briefing book research
1. true invoice cost for car
2. true wholesale value of my used car
3. costs for each additional options
4. costs for financing
5. option costs for the particular car
6. my personal opinion having driven the car
7. my consumer reports review and other reviews
8. my trusted mechanic's opinion
+===+Other research materials
1. contact Consumer Reports for costs of car/options (313-347-5810)
They have computer printouts, extremely current, on actual dealer costs, by car/model, and all options. At present, the cost is $11/ first car, $9/second car, $5/each additional car.
2. read The Insider's Guide to Buying Your Next Car, Don't Get Taken Every Time, by Remar Sutton, Penquin Handbook, 1982. (in libray or used book store)
3. my Negotiator Pro input which is in my computer (I have the printout in my $4.00 plastic covered notebook or if I get that inheritance, it will be in my $4000 6lb 386 20mhz notebook computer).
+===+Needed research materials
1. need Edmunds used car price list
2. need to get maintenance records for my used car
+===+Involved parties' interests and proposals
My Interests
--------------------
Interests:
a. dependable car
b. least mark up
c. affordable financing
Proposals:
a. buy today here or at the dealer down the road
b. get car at best possible price
Terms:
a.?
BATNA:
1. go elsewhere
2. continue driving existing car
___________________
Salesperson's Interests
---------------------------------------
Interests:
a. most mark up
b. most bonuses
c. quickest sales
Proposals:
a. buy today
b. buy here
c.
Terms:
a. highest possible
BATNA: sell to someone else
____________________
Used Car Dept Manager
---------------------------------------
Interests:
a. allot as little as possible
b. be sure of value of used car
c. negotiate effectively with salespeople,
wholesale car buyers, keep dealership owner
happy
Proposals:
a. this car is worth X amount
Terms:
a.
b.
BATNA: wait for another car
__________________
Finance Dept manager
------------------------------------
Interests:
a. finance lots of deals and sell maintenance plans, undercoating, security devices, and life insurance plans
b. at highest possible rates
c. to credit worthy customers
Proposals:
Terms:
a.highest possible
BATNA: wait for next possible customer
__________
+===+Terms and Standards
ME
----
$ Terms:
Ideal: depends
Good: depends
Acceptable: depends
Standards:
a. Consumer Reports
b. Remar Sutton
c. comparison to other dealers, comparable cars
Accreditation:
a. Guide X
b. Guide Y
__________
Salesperson
--------------------
$ Terms:
Ideal: depends
Good: depends
Acceptable: depends
Standards:
a. current value
b.
c.
Accreditation:
a. guide x
b.
c.
_______________
Used Car Manager
------------------------------
$ Terms:
Ideal: depends
Good: depends
Acceptable: depends
Standards:
a. what wholesalers will pay or used car lot will get
b.
c.
Accreditation:
a. recent sales
b. see X classifieds
c. see Y guide
______________
Finance Manager
----------------------------
$ Terms:
Ideal: ?
Good: ?
Acceptable: ?
Standards:
a. what fiance co. will want
b. what local banks and credit unions get
c.
Accreditation:
a. other prices
b. recent trends
c. guide books
+===+Acceptable Outcomes
Potential outcomes may be affected by areas of overlap in interests:
1. buyer wants to buy and seller wants to sell a car
2. buyer wants to deal with a good ealership and seller wants to be known as a good dealership
3. buyer wants to learn about cars and seller can educate buyer
4. seller wants to service the car and buyer wants a dependable service facility that knows the car
5. buyer would want to go back to a reputable dealer and the wants repeat customers
+===+Select strategies
Principled negotiation.
(This is defined in Help, and is found in greater detail in "Getting to Yes," by Fisher, Ury, and Patton.)
+===+Tone of negotiation
1. come in prepared
2. don't get rushed
3. set my own agenda
4. be willing to walk away
5. be upbeat and respectfully friendly
6. be firm but fair
+===+What might modify the intended tone
1. how busy the dealer/salesperson is
2. how economy is
3. mood of salesperson
4. my mood
6. mood of used car manager, finance manager, general manager, owner
7. interest rate trends
8. dealer incentives from manufacturer
9. market perceptions of value
10. attention to detail...condition of trade-in car, knowing other prices
+===+Establishing a relationship
1. establish a firm, fair attitude towards the car selling professional
2. they have their job to do and I have mine
3. be humorous, don't personalize the deal, avoid giving concessions for friendship
+===+Who is on your team
1. me
2. spouse (we have talked over and practiced our approach)
+===+Who is on other team
1. Sam Seller
2. Uri Used Car Manager
3. Frank Finance Manager
4. Gerry General Manager
+===+Proposed groundrules
1. The dealer needs to know right up front that I am very serious about getting the information you need to make a smart choice; and then I become a serious buyer; ready to buy the right car, now.
2. I will take down information in my notes, especially what is and is not included in their price.
3. I will have my briefing book with me with my notes, copies of relevant market guides for this model and make.
4. I have copies of Consumers Union printout on the cost to the dealer of all options.
5. I will call to arrange a demonstration ride if I haven't driven the car before
5. I will clarify to the dealer that I know that the sticker price is a fiction and all that I need to have a tight budget and I am concerned about getting the best possible car for that budget.
+===+Will you open the negotiation
1. I am interested in buying x or y models and I have driven them and I believe I have a rough idea of their value.
2. Be honest, open, clear about expectations.
3. Be friendly, in control, capable, not hardnosed, but not arrogant.
+===+How make first offer
1. review other similar sales
2. analyze sticker for prices, values
3. offer 20% below fair price
+===+How and when to communicate your interests
1. early on, but not until the salesperson is convinced I am serious buyer
2. explain I want a car that is:
dependable
good price
fair financing
+===+How and when to communicate your BATNA
Early on indicate I:
1. am serious buyer wanting to buy today or this week if possible
2. I have been to the competing car dealerships and I know exactly what they are charging for this and comparable cars with same options
(Note: I won't tell all my facts immediately, but parcel them out to get them to come down, bit by bit, until they are at fair price)
3. I have explored putting the new money into the old car, e.g., having engine and brakes rebuilt, new sound system, new paint job
+===+Willingness to make new proposals
I guess I:
1. am willing to move a little (just for psyche of sales person)
2. am willing to talk at all times
3. will have reasons for any new proposal
+===+How will you accredit your proposal
Use competition's prices
use guides
use newspaper ads
+===+Select tactics
Role Play:
practice with spouse before I go to the dealership with so we are in synch with each other, expecially when it comes to critical
details of what we want to spend and how desirable we find their car. If we cannot keep a straight face when you explain that you are leaning toward the other dealer's best offer, I'll ask my spouse to take a short walk, or ask spouse to not comment on certain
matters...
Timing:
clarify I am ready to buy today if the right deal comes my way! Be ready to buy at all times, but don't be in a hurry. I will use persistence - parceling out my information about better deals offered elsewhere for comparable cars with comparable options.
Other Tactics:
use judo, silence, linkage, sequencing and packaging during the negotiation.
Don't be friendly or difficult. Above all, don't
try to give in to get their friendship. Don't be swayed by emotional appeals by the salesperson. Don't be rushed by high pressure sales techniques. Show the salesperson and his or her manager that I am
perfectly willing to walk away from the deal - once I have convinced them that I am ready, able and willing to do the deal.
+===+Possible disagreement with client over tactics
This question is addressed to the situation where the buyer is not getting the car for themselves, but instead for a client or principal.
In some situations this may apply to a family situation in which the negotiating buyer has a different approach that might conflict with the
messages coming from the principal buyer.
I might want to role-play to identify any possible disagreements. After coordinating our approach; we might want to try one of the following tactics:
*Hard buyer - soft buyer
*Buyer focussed on certain features - other buyer wanting other features not available
*Both buyers united but need a special price
after getting the salesperson committed to selling to us
*Consider waiting out the salesperson or even going in during the slow periods such as January
*If I have a salesperson that cares about the relationship, build one, and look for ways to trade favors, e.g., I can refer the other people at my workplace
+===+Tactics for impasse
If I reach an impasse with the salesperson, I'll use the following tactics:
1. spend some more time building our relationship, talking up the clearly positive aspects of the car,
2. use humor or summarize our points of agreement to date,
3. ask to speak with the sales manager to explain why I really want to do the deal, but that I can't because at the other dealership there is a similar model which is hundreds of dollars less (separately negotiated),
4. take a break by saying I would love to buy but I have to think it over and you will be back in 2-3 days,
5. use Consumer Reports information on actual dealer cost for the car and each of the options,
6. distract the salesperson by suddenly considering a completely different model of car, e.g., suddenly start considering a station wagon when I have been looking at 4-door models,
7. use any objective statistics I have to justify our position,
8. be ready to walk away from the deal and make that threat credible
(note: I won't try this prematurely as the salesperson won't care if I threaten to walk since he/she hasn't spent much time on the sale), this might prompt a better offer on the spot or a call a few hours or days later, once they see we haven't returned and still are ready, able and willing to buy.
+===+Other side's possible proposals
1. know in advance the salesperson will try to work me over (see car buying terminology in Glossary)
2. they might offer a trade-off involving:
a. price (research using Consumer Reports service)
b. options (research using Consumer Reports service)
c. cost of financing (be aware of what your bank or credit union will charge us for financing)
d. time for financing (two vs. three vs. four years vs. leasing)
e. cash vs. credit
f. trading our current vehicle
+===+Other side's concerns
The salesperson and dealer want to:
1. maximize profits
2. keep ok relations for future sales
3. minimize time spent on the sale
4. never sell below their margin
5. avoid having their macho/ace/negotiator status overtly threatened
6. control the information flow
7. sometimes imply a better deal going to the buyer than they intend to actually deliver on
+===+Your concerns
Our concerns in buying a new car are:
1. research which car satisfies our most important concerns (handling, price, resale value, looks, color, features, milage, dependability, size, handing on ice and snow, cold or warm starting, etc.),
2. look at costs of similar cars from other dealerships of same and similar manufacturers so we are clear about our alternatives and objective standards for what is a reasonable to good price,
3. get a dependable car at a good price in a timely manner.
+===+Tie-down tactics
1. get a written offer that is approved by the manager/supervisor
2. sign the offer
+===+Insuring compliance
1. be sure to get all of the features listed on the car invoice (if the features aren't listed and aren't standard we can't count on them being delivered by the dealer at the time we pick up the car.
2. if there is a bait and switch or other scam, we can utilize the complaint procedures of the Attorney General or Better Business Bureau.
+===+Utility of the deal
Everyone (just about) gets a reduction from the quoted price. Our concern is how good a deal is it? For this we really only have a
comparison to the prices the same vehicle is being sold at other dealerships. Other factors come into play, such as special features,
color, delivery time, quality of dealer preparation (does everything work as it should), milage, etc.
