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(This is an abridged version of an article that originally appeared at www.edmunds.com. It was written by Philip Reed, Senior Consumer Advice Editor.)
Many people feel uncomfortable challenging the authority of the numbers written on the window sticker of a new car. This is exactly what the dealer wants. The sticker is supposed to look official. People tend to believe things that are written down. Allen Funt, in the TV show Candid Camera, proved this by closing the state of Delaware. He put up a sign at the state line that read, "Delaware closed." Motorists stopped and angrily asked, "How can Delaware be closed?" Funt just said, "Read the sign."
So the sticker price is really a tactic to build profit into the deal. The dealership and car salespeople use many such tactics to increase the profit when you go to buy a car. But, as Herb Cohen points out in his book You Can Negotiate Anything, "a tactic perceived is no tactic." In other words, if you realize what they are doing to you with various sales ploys, these tactics will no longer work on you.
Why do many car buyers seem reluctant to make a low offer? I often hear people say they are afraid the salesperson will laugh at them. Or become angry or insulted. And yet, if you think about it, they do the same thing to you - but in reverse. Here's what I mean.
At Edmunds, we had a writer named Chandler Phillips go undercover as a car salesman. As part of the training process, he was repeatedly told to quote very high prices, then come down slowly. "Hit 'em high," he was told, "then scrape them off the ceiling and make a deal." In other words, if you start very high, there is a lot of room to drop the price and still make plenty of profit.
I recommend Cohen's book on negotiating, but to get a good deal on your next car, you don't have to be an ace negotiator. You just have to follow a few simple rules.
- Don't buy a car in a hurry.
- Eat before you go to the dealership. You might be there for four hours or more, and you want to be able to think clearly.
- Check all the numbers and get as much information as you can before you begin negotiating.
- Don't enter negotiations with someone who intimidates you. It should be a win-win proposition, not a matter of one person controlling another.
- Take risks. Treat negotiating as a game, and know that the car salespeople are doing the same.
- Always, always remember to walk out if you don't reach a deal you like.
And finally, know your style of negotiating and use your unique qualities to your advantage. After all, you won't get what you want unless you ask for it. Negotiating is just another way of asking for what you really want.
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