Buying a car is an expensive necessity for most people and is very much an area where negotiation skills can help to lower the price. Car salespeople are highly skilled at their job and know more tricks within selling than a lot of other business people. Whether you are buying a new or used vehicle, being able to negotiate can save you thousands of pounds.

My own experience tells me this, having seen another customer pay the full asking price (£15,100) for the same model for which I paid £12,600. He did get some mats thrown in for the price. Mind you, they proved to be very expensive car mats at £2,500 for a set!

SETTING THE SCENE

One chilly Saturday in January, you park your old banger in a car park and stride across to the local showroom, where a salesperson catches your eye and welcomes you to the start of your car purchasing journey.

‘Has sir got a model in mind?’

‘Yes, I love the new sporty Santina . Wow, what a model! Fell in love with it straight away.’

‘It is rather nice, isn’t it, sir? Did you notice the builtin GPS system?’

‘Notice it? It practically leapt out at me and said I know where you want to go, you just sit back and I’ll do the rest! I also liked the idea of the CD player, but does it hold more than 6 CDs at a time?’

‘Alas no sir, however the upgraded XTX model handles 12 CDs and uses the latest sub-woofer speakers as well – definitely a must for the successful executive. Along with the metallic blue finish, you will be the envy of the street and the boardroom.’

‘Can we go for a test-drive?’

‘Of course we can, sir.’

The salesman grabs the keys and off you go, with you in the driver’s seat.

‘How’s it handling?’

‘Like a dream, I am practically floating. The temperature is really cool as well.’

‘That’s the beauty of air conditioning. However, climate control is the way forward for the man who wants the ultimate in car comfort. If you’re doing a lot of driving, you need to feel comfortable. Do you like the idea of your perfect climate at the touch of a button?’

‘Oh yes!’

‘Not a problem, sir. For just an additional £275, you can feel the heat of Hawaii in the winter, or the freshness of Finland in the summer.’

‘I want it, but it seems expensive.’

‘Well, John, may I call you John?[a nod from you] . If you buy the car today, and today only, you can take advantage of our fantastic low interest loan. That way I can lose the £275, and the car will be totally yours in three years’ time.’

‘Really, so I’ll get it for free. Fantastic, let’s go do the paperwork!’

ASSESSING THE ABOVE

• 1.Don’t get too excited. For some people, it’s hard not to when purchasing a new car. Advertising is designed to arouse people’s emotions about a vehicle and its extras, and the industry spends millions of pounds on it each year. They do this because the market is very competitive, and they want to get you into their showroom focused on their brand and a particular model.
  They know their target audience (the people who normally buy their cars) including typical age-group, and have a reasonable idea what your lifestyle is like as they have done research on this.
  Too much excitability can give the salesman vital clues about your intention to buy. However, if you go to the other extreme (i.e. suggest that you couldn’t care less) then this will also arouse suspicion as it’s rare to spend anything upwards of £7,000 without some sort of emotion.
• 2.Be aware of ego-boosting comments. A good salesperson wants to gain rapport with his or her customer (see Chapter 3). A compliment or a sense of understanding your needs is a great technique used to get you relaxed and in buying mode. This, however, can also be used to your advantage, as we will see later on in the chapter.
• 3.Don’t list all your wants straight away. If you tell a salesperson about all the bells and whistles that you want included, they will naturally add them on at full price. Leaving this element until later in the deal will give you much more bargaining power.
• 4.Define low-interest! If you are offered special interest deals, go through them in fine detail to make sure you are better off and not paying more than you need to. Many car companies offer 0% interest deals at various points during the year.

THE BENEFITS OF NEGOTIATING

• 1.Gaining a better price for your car and possibly saving yourself thousands of pounds.
• 2.An upgraded model for the price of the basic one.
• 3.Added extras either included in the price or heavily discounted.
• 4.A free tank of fuel.
• 5.Potentially better trade-in rates for your old car.

WHAT TO PREPARE BEFORE YOU NEGOTIATE

• 1.Prioritise what’s important to you and write down what are ‘must-haves’ in your chosen car, compared with ‘nice-to-haves’. Must-haves could be a 2-litre engine or above, diesel and power steering, whereas nice-to-have could be a GPS system, heated seats and climate control.

An example of a must-have and like-to-have list.

• 2.Get the brochures for the various models you are interested in. List the ones that are your top two or three choices and look at the benefits each has. Benefits are personal to the individual. Some people value things like side air-bags and a more powerful engine, whereas others prefer a GPS system and individual DVD players for the children in the back of the car.
  Even if you are solely set on one particular model, it may be worth having a brief look at the competition as it will help you when you negotiate. Sellers who know you have your heart set on their model have only their other own brand showrooms to compete against, and whilst this will still be an incentive, it is certainly narrowing down your options.
• 3.Do your research. Offers and ‘special seasonal deals’ are found in local and national newspapers, and range from special prices to 0% finance. You will see deals advertised across the year, but more emphasis in the UK will be around the new registration months of March and September. The adverts often appear in the months runningup to these dates, as competition for your business hots up.
  Scour the internet for your dealers. Sometimes they will offer additional deals over and above the generally advertised ones. Make sure that when you compare prices, it is for a ‘like-for-like’ car. If they have not got a website, either call them up or visit the showroom to see if they have any special offers on at the moment.
• 4.Make a list of all offers and prices, and keep it with you as a reminder. By now it’s likely you have already saved a fair bit of money from the original price quoted, and you haven’t even negotiated yet.
• 5.Have in mind two prices on each car you have short-listed: the highest you are willing to pay and also your ideal price. The highest rate should really be no higher than the lowest ‘like-for-like’ price you have found for the model. You should consider which is more important to you: lowering the price, or getting additional extras for no more cost.

Whenever you negotiate, it is important to know your ideal outcome and your walk-away rate (see Glossary).

APPROACHING THE SHOWROOMS

Now that you have all the information to hand, you are ready to approach the showrooms. You are aware of what is key to you and the prices available, and you have an idea of what you are happy to pay.

As you enter, a good car salesman will quickly try and gain rapport with you. This is designed to make you feel welcome, comfortable and at ease.

But being relaxed in a salesperson’s company can lead to you giving more away than you think, and falling into ‘buying mode’. The trick is to appear off-guard and at ease even though you are actually alert and prepared!

• 1.Begin with the end in mind. You want to pay a good price that you are happy with. In order to do this you need to show interest but not uncontrollable excitement. You also need to make sure that the seller feels you have not made up your mind as yet and are considering a few models including ... This is where your knowledge of other possible deals from your preparation is important.
• 2.Prepare your opening statement with the above in mind. This can be thought of before you leave the house that day. Think about what will give them the indication that you are a genuine buyer and your custom is potentially theirs if they treat you well. An example would be:
  ‘Hi, I’ve taken today off work to find out more about my top three choices of new cars, and the Santina is one of them. I intend to buy in the next week or so and would like to ask you a few questions if I may.

The above indicates an intention to buy and buy soon, ‘your car is up there in my list, but I’m not setting my heart on it’. A good salesman will naturally want to help.

Or, you can approach things in a different way by offering a ‘delaying signal’. This could also gain you a better deal.

For example, after stating your intention to buy a new car either now or in the future, say:

‘I’m wondering whether to wait until October, as I feel the prices will be better once the ‘excitement’ of a new car registration is over, and people will be saving up for Christmas instead.’

Although they know buying a car is a ‘considered purchase’, salespeople generally want to close the deal with you as soon as possible, since as days, weeks or months go by, you – the consumer – have more choices available, more glamorous advertising thrust upon you and potentially more important ways to use upwards of £7,000 (e.g. Christmas presents and a new kitchen). So they may offer you incentives to persuade you to buy now.

• 3.Prepare yourself for questions.

Such questions come in numerous shapes or sizes. Examples are:

‘Can I ask you where we rank in that top three?’– If you say number one, they know that you have more emotional attachment.

‘What made you choose the Santina , out of interest?’ – If you list emotional reasons, they could attempt to estimate the risk factor of you going elsewhere, which will allow them to calculate whether they have to negotiate off the full-rate in order to get your business. Equally, it could be to use their expertise to help you make an informed decision on the model compared with other offerings they may have.

Whenever you are asked a question, ask yourself this:

‘What is their motivation for asking this?’

This will help you decide how to answer the question. If you feel it’s to help you in your decision, then fine; if however, it’s to help them to gain information about your keenness, then you may prefer not to answer, or you could try to be clever with your reply.

As an example:

‘Can I ask where we rank in that top three?’

You could say:

‘Currently third, but I’m prepared to be swayed!’

Another example:

‘Do you want climate control?’

‘Doesn’t it come as standard?’

• 4.Listen out for the proposal. When the salesperson has got all the information they need, and you have finished asking any questions you may have, they will then quote you a rate or ask you if you want a quote. You will have a good idea of this anyway, as you will already have done your research. Make sure you go through exactly what the price includes, and that it covers all your ‘must-haves’. Hopefully, some or all of your ‘like-to-haves’ are there, too. If not, then now is your chance to add them in.
• 5.Raise an objection. If not, you might as well not have bought this book! Earlier on, you would have decided what you would like to achieve from the deal. It could be a certain price, additional extras or both. If it’s price, use your research effectively. For example you could say: ‘£13,000, that’s a little too high, I was expecting nearer £11,500, as I have seen offers closer to that in other showrooms.’
  Or, if you would rather be less specific:
  ‘£13,000 – that seems high, I need to have a deal that’s better than that. My alternatives are cheaper. In order to get my order, are you willing to offer me a discount?’
  If it’s additional extras, you could say:
  ‘£13,000, that’s quite high. But if it included all the extras that I am considering, then I might be able to consider that price.’
  Here you are showing interest and saying that, if your conditions are met, the price that they are offering could be possible.
  This is where you can use your ‘like-to-have’ list, and see what you can add in. Try for as many as possible at first, as you can always come down.
• 6.Take time to consider the deal on offer. Thank the dealer for their assistance and ask them to print a quote out for you, with all the added extras. Having an offer in writing saves confusion later on, as when you come back, the salesperson may be on a day off and there will be no confirmation of the offer given. Let them know you are going to consider their proposal, and also use the rest of the day to see your other car options. It may be worth saying:
  ‘If there are just a few hundred pounds in it, would you be willing to look again at your offer?’
  A straight ‘no’ is the only likely answer that suggests not. If it’s ‘come back to me’ or similar, then there is definitely a chance.
• 7.See your other car showrooms and apply a similar approach. Though this time you will have a concrete offer in your hands that can be used to help in your negotiation. When the price comes up, you can use this quote in your justifications to them to better their offer. For example:
  ‘I appreciate your offer; however, I can buy a similar model at £12,200, and it has all the extras included already. Your car is one I would like to consider, but I would need it to at least ............ that price.’[Add in ‘match, beat or come closer to,’ where applicable!]
• 8.Look at your options and then decide. You can of course try this a couple of times with each showroom, but judge whether you feel it necessary or indeed fruitful. You are likely to be at the final stages of a negotiation, and this is where a conditional offer (see Glossary) is really helpful to see if you can squeeze a little bit more from the deal. Here is where you use the ‘if and then’ approach. You could say:
  ‘If you agree to adding in a free full tank of fuel [and/or GPS, car mats, etc.] ,then I will buy the car off you today.’

‘If and then’ is an approach that is often used in business negotiation which only commits you to a deal if they agree with the condition you have imposed upon it. In this example, the condition is fuel. They can of course say no; however, it doesn’t stop you from agreeing the deal without it.

CONFIRMING YOUR DEAL

Now you have verbally confirmed the deal, it is then important to read all the paperwork to ensure price, delivery and added extras are all written down and confirmed in your contract. Verbal deals are not worth the paper they are not written on!

When buying a new car, it is likely you will wait several weeks for delivery, and a lot can change in that time, including your salesman, who may be working elsewhere. So contracts detailing everything that is not sold as ‘standard’ are vital.

NEGOTIATING PART EXCHANGE

Deals can also be negotiated on part exchange for your old car. The price offered can vary, so it’s important you get the best deal you can.

As in all negotiations, preparation is key, so find out your vehicle’s true worth before you part exchange it. Companies offering this service can be found on the web, and indications are often given within car magazines. List your three outcomes: firstly, the price you would be very happy to achieve (jot down some justifications for your proposal – see below), then a good outcome for you, and finally your bottom-line.

Again, it is important that you don’t limit your options, as if you are not happy with the part-exchange price you have been offered, you can always sell it privately. If the salesman is aware of this, it also makes them realise that you are not necessarily committed to buying a car from them.

Use the ‘if and then’ approach mentioned earlier in this chapter to help you get the best deal you can. For example:

This will not commit you to the deal unless they agree with your terms. If they offer an alternative deal, it is then up to you whether you accept it or continue to bargain until you are happy.

WHAT’S IN IT FOR THEM?

Car salespeople are invariably on a bonus or commission, and it forms a significant part of their salary. Often these are monthly targets, and therefore establishing as much information as you can about how close they are to reaching their next level will help you understand their keenness to do a deal.

You may want to show an interest in their targets and casually ask how the month has been for the showroom and them in particular. Perhaps ask them whether they are targeted monthly or weekly. This may or may not give you the information you want, but it’s worth a try if you feel brave!