January 17, 2009
Here is a technique for negotiating the price of any big ticket item, especially a used one.
Go through the basics. Make sure you really want it.
After you have done your homework and know when you see a good deal, don't get greedy. But hold out for less than the asking price. This is especially true of a used car.
If it's a commercial seller, sit down with the salesman. You can now play the haggling game. You may win. Probably not. But get another 7% knocked off: sales tax. (This won't work in Oregon, Montana, Nevada, and New Hampshire: no sales tax.)
Have him get out the purchase papers. Start reading them. He thinks he's almost there. This is crucial. Ask a couple of obvious yes-answer questions. He will tell you what you want to hear. You nod. Keep reading.
He is now even more hot to trot. He has answered your objections. The commission is his!
Get out your checkbook. (Never borrow to buy.) He is now a bit amazed. People usually borrow. Write the sticker price on the check and hand it to him.
Now he will tell you all about the sales tax. Ignore him. Tell him, "That's the price I will pay."
He has a check in his hand. He doesn't want to lose the sale.
He may go to "talk to his manager." If he comes back and says no, here is step two. Tear the check in half, top to bottom. Your signature is there. The price is there. Write VOID on this half. Turn it over. On the back, write your last name and your cell phone number. Write CELL PHONE.
Tell him that you are going to the next dealer. Tell him you will come back and write a replacement check if he calls you before you get to that dealer. Beyond that, no guarantee. You reserve the right to re-negotiate. Say, "I want to be reasonable, but there are some other deals I saw on-line, and I am planning to buy from someone in the next six hours."
Then walk out.
He will see your back. He is holding "almost the deal" in his hand. That half a check will remind him: he had the deal. He wants the deal. He can get the deal for the loss of sales tax.
See what happens.
Drive to the next dealer. Repeat the negotiation.
If he lets you get through the day and calls the next day, tell him: "I'll buy it for $250 less, and no sales tax." He is calling you on your terms: a day late and $250 short.
This report went out early in the morning. At 1 p.m., I was sitting in a used car office buying a 2005 Toyota Sienna minivan. My wife, still in Mississippi, had spotted the car on Craigslist.
I liked the car. I was ready to buy. The man filled out all the paperwork. Then he got to the price. I had not negotiated. He probably could not believe it.
He wrote down the price . . . plus sales tax. I said, "I have budgeted $10,000, total." This was true. "Will you take $10,000?" He said no. I got out my checkbook and wrote a check. He probably thought I had buckled. It was for $10,000. I tore it in half, put my name on the back (he had my cell phone already), and told him, "If you change your mind, give me a call." I left.
My son-in-law had driven me there. My car was in the shop. He went back in to ask for directions home. When he came out, the salesman was with him. I knew I had the deal.
He came over and said, "I'll take your $10,000."
I had just saved $760 in sales tax.
As it turned out, he asked my son-in-law, "Is he really ready to buy?" My son-in-law said yes.
I bought.
A torn check is a powerful emblem of the sale that got away. The phrase, "It was right in my hands," comes to mind. Half a check was in his hands.
I was not bluffing. I had two cars to look at next week, both under $10,000. He would not have got the sale. But now I did not have to drive back to pick up the car. I drove home in it.
If you have more time -- mine is extremely limited -- you can get even better deals.
For more techniques on buying used cars, click here:
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