Your Money_ The Missing Manual - J. D. Roth [87]
Don't start negotiations from the sticker price. Because you've done your research, you know roughly what the dealer paid for the car, so use that as your starting point.
Be sure you're talking about the drive-it-off-the-lot price. The salespeople will try hard to negotiate around a monthly payment amount; ignore that. Because you took care of the money beforehand (Money matters), you don't care about the monthly payment. All that matters is the price you're going to pay to drive the car home. (Seriously, this is a huge trap to avoid: Whatever you do, don't get caught up in discussing monthly payments.)
Don't negotiate more than one thing at once. Dealers love to negotiate lots of things at the same time—purchase price, monthly payments, trade-in value, and so on—because that gives them a chance to give a little in one area while making a killing in another. Insist on taking care of one thing at a time.
Stay in control. Remember that you're in charge. You're the one buying the car—don't let somebody sell one to you. The salesman will do everything he can to get you to buy this car today. He wants you to feel pressured. But because you're not emotionally attached to this car and because you've given yourself plenty of time, you don't have to buy today. Don't let the dealer make you feel like a jerk for taking time to think things over.
Tip
It can help to go car shopping with a partner so that, if you get too wrapped up in the situation, the other person can play the "bad cop" and pull you away.
Be willing to walk away. Salespeople can be sneaky snakes, and are apt to introduce new fees or terms into the deal anytime. The most powerful weapon you have in your car-buying arsenal is your legs; don't be afraid to use them to head for the door.
On The Money: Negotiate Everything
Americans generally don't like to haggle, but negotiating is an important skill—that can have a huge impact on your financial life.
In Chapter 6, you learned how negotiating your salary could have a lasting effect on your income. In You Can Negotiate Anything, Herb Cohen argues that, to negotiate effectively, you need to control three crucial variables:
Power is the ability to get things done. You can gain power in a negotiation by generating competition (having three contractors bid to re-roof your house, for example). Other tactics are to use persistence, precedence ("This is how I've always done it"), empathy (understanding the other side), perceived legitimacy ("Consumer Reports says this model isn't as good as others"), and silence (not saying anything at all will often cause the other side to continue negotiating, as if you'd made a counter-offer).
Time also plays a role—the side with the most time has the advantage. No matter how rushed you are, keep your cool. Don't ignore deadlines, but don't follow them blindly either.
Information is the final variable: The more you know, the better off you are, so do your research before you start haggling. And during negotiations, act on whatever new info comes to light: Has this model been discontinued? Does it have a scratch? Did the store order too many? Use this knowledge to adjust your offer.
For more about how everyday people use negotiation skills in real life, check out this article from the Washington Post: http://tinyurl.com/wp-haggle.
Close the deal
Now that you've agreed on a sales price, the final step is to sign the paperwork. But before you do, the dealer will try to sell you a few more things. Ignore anything they offer after you agree on the sales price. Sure, you could buy a service contract or floor mats or underbody coating or an extended warranty from the dealer. But these are almost always a bad deal.
If you really want underbody coating, buy it somewhere else for less. If