Pushing Your Advantage

The sales results from September are in, and in the words of one analyst, they are ghastly. Consumers are staying away from car dealerships in unprecedented droves. Maybe you feel you should join them, standing on the sidelines. If your finances and future prospects are cloudy, that is just where you should be. But if you feel relatively secure, there hasn’t been a better time in the last 20 years to buy a car and truck than right now. The incentives and offers from the auto manufacturers are gigantic. In some instances you can save as much as 40 percent off the manufacturer’s suggested retail price (MSRP) of a new vehicle. But if you’re going to get the best deal out there, you can’t just sit back and hope it happens. Instead, you have to negotiate, and negotiate hard. And that means haggling.

Though many consumers profess to hate haggling over the price of their vehicle, there are those who don’t feel they could get a good deal if they didn’t haggle. They feel they must engage the dealer in negotiation or they are leaving money on the table. And the fact is, if you don’t negotiate, you probably will not purchase the vehicle as cheaply as you otherwise might. 

How do you avoid transferring vast sums of your money into the dealer’s bank account while keeping your sanity and dignity largely intact? First, understand that the new-vehicle acquisition process involves several transactions. Try to treat them as discrete negotiations rather than lumping them together. This will allow you to examine each more clearly than trying to make sense out of a multiphase deal. Second, arm yourself with information. The Web has made it much simpler to get key pre-negotiation information like list prices, invoice prices, incentives and even “street prices.” Equipped with this knowledge, you can better assess each individual transaction and the acquisition as a whole before you shake hands on the deal. 

One potential tripping point is the trade-in. Anyone who trades in her or his vehicle as part of the purchase of another vehicle is really engaging in two transactions simultaneously. And since used-car values are hardly set in stone, the concept of the trade-in by necessity guarantees that some sort of negotiation will take place. One part of that negotiation is the trade-in value (i.e., purchase price) of the vehicle going to the dealer, and since that is already in play, it is not a stretch to throw the purchase price of the new vehicle up for negotiation as well. Add the bargain around possible dealer financing of the vehicle, and you have the basis for a complicated and often murky series of negotiations. Only by treating each as a separate entity can you look at them with any degree of rationality.  

One final bit of advice: Don’t try to wring every last dollar out of the deal. There are diminishing returns to prolonging a negotiation, especially in light of the fact that you could well spend hours to capture that last 50 bucks. Instead, aim for a mutually satisfying deal, a win-win, and you’ll be more satisfied in the long run.