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Subject: I bought a new car... rss

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Chad Ellis
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...so naturally I blogged about it.
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True Blue Jon
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Chad_Ellis wrote:
...so naturally I blogged about it.


And gave us the wrong link.

Here's the right one.
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Dave G
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quozl wrote:
Chad_Ellis wrote:
...so naturally I blogged about it.


And gave us the wrong link.


You and I approach this very differently, although some of that may owe to the fact that the negotiating I do in my job is essentially haggling whereas you are a professional negotiator with a much more sophisticated outlook on these things. I'd say the key differences to my approach are this:

1I've got no problem lying to a car dealer. I'm happy to. I am a natural cynic, but I've dealt with enough car salesmen to know that there is a culture of dishonesty and deceit underlying the whole process and I have no problem "sinking to their level."

2I don't care if they have a BATNA. At all. I'm going to buy a car, but it doesn't have to be this car.

3I am aware there is such a thing as a cooperative negotiation, but I don't think those are any fun. Buying a car is absolutely a competitive negotiation, and I enjoy trying to "win."

So based on those things, I go in guns blazing. Lie about what another dealer offered on my trade-in. Lie about how much I have left to pay it off--when it's close to the actual value they'll be very hesitant to offer you less than what they believe to be your pay-off amount. Lie about whether I intend to use their financing. Throw out a ludicrous first offer, just to get in the guy's head. Like I used to tell the guys working for me in negotiation training, one of your best weapons in a cold negotiation is surprise. Even though the opponent knows that first offer is ridiculous, if they're not a good negotiator there will be a nagging voice in the back of their mind going "man, someone will do this deal at that price?"

I may be just a haggler, but I'm a really good haggler, and most car salespeople are really not very good at all. They have all the same tricks (that horribly dishonest "four-square" technique, the "invoice" they'll show you, the agreed upon "monthly payment" that goes up a few percentage points when they actually write up the deal hoping that the sheer momentum of the sale will make you ignore the extra $20 per month) and the look of defeat when you really work someone over is as good as winning a game of Through the Ages for about the same time investment.
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Chad Ellis
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quozl wrote:
Chad_Ellis wrote:
...so naturally I blogged about it.


And gave us the wrong link.

Here's the right one.


No idea what you're talking about.

Now the post has authentic DW Tripp commentary!
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Mac Mcleod
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Grats on new car!DD


I use internet bidding. I just asked by email "what your total walk out price for this car with these options".

1st dealer was lying so I left them.
2nd dealer started haggling and adding fees so I left them.
3rd dealer I was in and out in under 3 hours. Same bid as 2nd dealer but did not add any fees or haggle.

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Chad Ellis
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djgutierrez77 wrote:
1I've got no problem lying to a car dealer. I'm happy to. I am a natural cynic, but I've dealt with enough car salesmen to know that there is a culture of dishonesty and deceit underlying the whole process and I have no problem "sinking to their level."


Absolutely. One of the points I try to make in the blog is that there is no one right way to negotiate. You have to decide what works for you and what you'll be happy looking back on.

Quote:
2I don't care if they have a BATNA. At all. I'm going to buy a car, but it doesn't have to be this car.


Sure, but you still care about his BATNA because that's the only reliable way to figure out how low he's willing to go. I don't care about his BATNA because I'm a nice guy but because it's equivalent to his indifference point. If I don't know where that indifference point is, I won't know what to aim for.

Quote:
3I am aware there is such a thing as a cooperative negotiation, but I don't think those are any fun. Buying a car is absolutely a competitive negotiation, and I enjoy trying to "win."


I think the most fun negotiations are a mix of value creation and value capture, where you have to balance growing the pie with getting as big a piece of it as you can. And, again, a key part of preparation is knowing what you want to get out of it. I'm pretty competitive but at the end of the day I don't care if I "won" against a car salesman or not. I care about leaving money on the table, but I also care about not investing too much time chasing a few hundred dollars. Other people will have other goals.
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Mark Hamzy
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When I bought my previous car (a Lightning), one dealer gave me a $4,000 price higher than another. Needless to say I never went back to that one.

When I bought my current car (a 335i), the dealer gave me $5,000 option for free. I immediately thought about what else he would have thrown in. But I didn't want to continue haggling.
 
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J
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I'm kind of with Dave on this.

Chad wrote in his blog:
Quote:
I didn't get the lowest possible price but I got one I'm very comfortable with and didn't sink too many hours into either the research or haggling.


This way of thinking is different from mine. I go into the negotiation for a new car absolutely seeking the best possible price.

First of all, there is no future relationship to consider. I buy the car from a dealer, refuse all after-market add-ons and warranties, and never talk to them again. I have little to nothing to gain from establishing a relationship with them. Everything the finance guy tries to sell you is a rip-off anyway.

Secondly, the product is going to be the same no matter where I go. It's not like a service contract in which I might get more from the contractor by paying a little bit more. This Honda Accord is the same car I'm going to get from another dealer.

The last vehicle I bought took about four hours to negotiate the price after which the sales manager was visibly upset and refused to shake my hand. I feel like I got the lowest possible price and that I was “paid” quite well in savings for my time. The hostility doesn’t bother me at all and I often find it fun.
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Dave G
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jarredscott78 wrote:
I'm kind of with Dave on this.

Chad wrote in his blog:
Quote:
I didn't get the lowest possible price but I got one I'm very comfortable with and didn't sink too many hours into either the research or haggling.


This way of thinking is different from mine. I go into the negotiation for a new car absolutely seeking the best possible price.

First of all, there is no future relationship to consider. I buy the car from a dealer, refuse all after-market add-ons and warranties, and never talk to them again. I have little to nothing to gain from establishing a relationship with them. Everything the finance guy tries to sell you is a rip-off anyway.

Secondly, the product is going to be the same no matter where I go. It's not like a service contract in which I might get more from the contractor by paying a little bit more. This Honda Accord is the same car I'm going to get from another dealer.

The last vehicle I bought took about four hours to negotiate the price after which the sales manager was visibly upset and refused to shake my hand. I feel like I got the lowest possible price and that I was “paid” quite well in savings for my time. The hostility doesn’t bother me at all and I often find it fun.


Amen, brother. And not just because you said you agreed with me. I see no reason to make the dealership like me. My absolute favorite has been negotiating for my wife's last used car without telling them I had my own financing--I think they lowered the on-paper price quite a bit while anticipating making money on the dealer financing (they always take a spiff from the bank when they lock up a loan) and then watching their faces fall when I tell them I changed my mind and I've actually got a letter from the bank. They know they can't back out without me raising hell, so they're dead stuck. It's great, especially because the salespeople I've met have all swaggered in like their balls barely fit in their pants, and every car I've purchased they've tried to pull a fast one at some point in the process.
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djgutierrez77 wrote:
My absolute favorite has been negotiating for my wife's last used car without telling them I had my own financing--I think they lowered the on-paper price quite a bit while anticipating making money on the dealer financing (they always take a spiff from the bank when they lock up a loan) and then watching their faces fall when I tell them I changed my mind and I've actually got a letter from the bank. They know they can't back out without me raising hell, so they're dead stuck. It's great, especially because the salespeople I've met have all swaggered in like their balls barely fit in their pants, and every car I've purchased they've tried to pull a fast one at some point in the process.

This works a lot of the time.

I actually teach a car buying class for military folks. I tell them to conceal this bit of information and to refuse to commit to whether they want to trade in a vehicle. It's better to negotiate the price on the new car separate from the trade-in price.
 
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djgutierrez77 wrote:
jarredscott78 wrote:
I'm kind of with Dave on this.

Chad wrote in his blog:
Quote:
I didn't get the lowest possible price but I got one I'm very comfortable with and didn't sink too many hours into either the research or haggling.


This way of thinking is different from mine. I go into the negotiation for a new car absolutely seeking the best possible price.

First of all, there is no future relationship to consider. I buy the car from a dealer, refuse all after-market add-ons and warranties, and never talk to them again. I have little to nothing to gain from establishing a relationship with them. Everything the finance guy tries to sell you is a rip-off anyway.

Secondly, the product is going to be the same no matter where I go. It's not like a service contract in which I might get more from the contractor by paying a little bit more. This Honda Accord is the same car I'm going to get from another dealer.

The last vehicle I bought took about four hours to negotiate the price after which the sales manager was visibly upset and refused to shake my hand. I feel like I got the lowest possible price and that I was “paid” quite well in savings for my time. The hostility doesn’t bother me at all and I often find it fun.


Amen, brother. And not just because you said you agreed with me. I see no reason to make the dealership like me. My absolute favorite has been negotiating for my wife's last used car without telling them I had my own financing--I think they lowered the on-paper price quite a bit while anticipating making money on the dealer financing (they always take a spiff from the bank when they lock up a loan) and then watching their faces fall when I tell them I changed my mind and I've actually got a letter from the bank. They know they can't back out without me raising hell, so they're dead stuck. It's great, especially because the salespeople I've met have all swaggered in like their balls barely fit in their pants, and every car I've purchased they've tried to pull a fast one at some point in the process.


By the way, the next time I'm buying a car, I'm sending Dave in to negotiate for me. (It's going to be a while until that happens, though.)
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Chad Ellis
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jarredscott78 wrote:
I'm kind of with Dave on this.

Chad wrote in his blog:
Quote:
I didn't get the lowest possible price but I got one I'm very comfortable with and didn't sink too many hours into either the research or haggling.


This way of thinking is different from mine. I go into the negotiation for a new car absolutely seeking the best possible price.


That totally makes sense. The point I was hoping to bring out is that not everyone values the same things and so there's no one right approach. Dave is happy lying to a salesman; I'm not. I'm also much more interested in saving the first $1-2,000 than I am in saving the last $200.

More later, dinner's on the table.
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Chad_Ellis wrote:
I'm also much more interested in saving the first $1-2,000 than I am in saving the last $200.

Definitely. Time is money and I hope I'm earning a decent "wage" for my extra time spent negotiating.
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Golux13 wrote:

By the way, the next time I'm buying a car, I'm sending Dave in to negotiate for me. (It's going to be a while until that happens, though.)


I would happily pay someone to negotiate for me. I hate negotiating. I did that once with someone at work. They loved to haggle and get a good deal, and I got a good cell phone deal out of it.
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Chad Ellis
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Two other things I'd add:

Dave's point about starting off with a crazy low offer is very sound. The risk to that sort of approach is that it can sour the relationship and/or cause a breakdown in the deal but those risks don't really apply to buying a car. First off, there is no important relationship (with rare exceptions) and while car salesmen aren't all good hagglers they're not the sort of negotiators to let a deal go away because someone tried to pull one over on them.

Second, I strongly suspect that Dave (and Jarred) are better than I am at this sort of negotiation. In addition to knowing what you want from the deal and what your values are it's very useful to know what your strengths are as well. Ironically, I'm actually a very good haggler when I'm acting on behalf of a client or as part of a job for a company. In that context I enjoy it and squeezing out the last dollar (without damaging important relationships) is more important.

Plus, if you're negotiating 7+ figure contracts you're less likely to reach a point where the return on your time is too low.
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The last salesman I dealt with said, "The guy who came in before you was a fucking liar: Do that to me, and I'll cut you!" Thanks, Dave!

But seriously...

The places I buy my cars also service them. Cultivating a good relationship makes sense.

Also, I'm not very good at being an asshole. When I get agitated, I look and sound like Grover having a seizure.
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MisterMarino wrote:
Also, I'm not very good at being an asshole. When I get agitated, I look and sound like Grover having a seizure.


Trust me, its not pretty.

Darilian
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I was very disappointed last time I haggled on a car - I couldn't get a deal at all...

First I got a series of internet quotes. Then I took them to my local dealers as a starting point. None of them would match the internet price, even when I walked out the door.

So I got the really good internet deal. Oh well.
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The issues with squeezing depend on your other options. Imagine a market where there are just 4 dealers for the brand you want. One starts at very low prices. One is crazy and actually expects to use MSRP as an anchor. the other two are in between.

There's a limit to how much I want to sour my relationship with the guy that gives me a realistic first bid, because I know that the effort I will have to spend to even get to the same place with someone else is going to be quite expensive. In that situation, one can be aggressive, but only to a point.

Hiding your economic status and your need for financing sure helps. It's especially entertaining when you represent that you are very interested in their financing, and then refuse a 3% loan, instead handing them a check.
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Chad Ellis
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A funny thing about this purchase. We were originally told that we could get 1.5% financing and were OK with that. Then at the last minute (after agreeing on price) he says, "Oh, actually it's zero percent." Usually they try to switch you to a higher rate...
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