Valuable Lessons Learned – Negotiating with a Car Salesman
People often tell me that I’m a hard core negotiator…I often get sought out to give advice on apartment rentals, house buying, or salary negotiations. One of my buddies recently took me to negotiate a deal for a car purchase. I learned something this weekend – How to be prepared to negotiate with a car salesmen. Here are some valuable lessons learned from this weekend –
o It was very important to listen to the salesman. As he talked, I knew that a sale for him was crucial as he needed to make his numbers and it was the end of the month.
o He also mentioned that they sell on average 10 cars a month. Since the next business day was the last day of the month, their chance of selling a new car was 33% - very low if you need to make your targets.
o My car salesman, while talking to his manager, repeatedly mentioned that this sale would go towards end of month numbers. He really had a sense of urgency to make the deal.
o My negotiating class taught me the importance of BATNA – Best alternative to a negotiated agreement. Thank You Bill Davis and Wake Forest!!!!
o I had a strong BATNA vs. the car salesman – I was in no rush of purchasing a car and I was interested in other brands. My best alternative would have been either to wait or go to another dealership. On the other hand, my car salesman, he was 1 car away from making the numbers.
o I’m not really a car person – I’m pretty shallow when it comes to cars…do they look pretty; is it easy to maintain; can I show it off to my friends. When I walked into the dealership, I didn’t know what car or model I wanted to purchase but I knew my walk-away point.
Don’t Finish Negotiation on the Same Day
o At the end of the negotiation, I took the offer and went home to sleep on it. I also felt it makes the other party nervous – will she take the car or not.
o I also knew I may have a little more wiggle room to negotiate when I got an email after 10 minutes from the dealership opening time.
o In India, there is a saying that good deals are often when both parties feel happy. If one side feels slighted, in the long term, the deal will somehow get sour. I did enough research to know what was fair for both me and the salesman. I made sure my end amount was good to make both parties happy.