Negotiation Tactics When Buying a New Car

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To stay competitive local dealers are posting their inventory on the internet. With this new development it becomes easier to pit the dealers in your area against each other in a price war. The time of year, time of month, and type of car all play a role in how desperate a dealer will be to close a sale.

These negotiation tactics work best when buying a new car. New cars narrow the options and leave less ‘wiggle room’ in the negotiation. Used cars are so different in mileage, features, and age that it would be difficult to find an a group of cars that are exact matches. Additionally, used cars don’t have the sales incentives from the manufacturer like new cars have.

With that in mind, these are the tactics you’ll use to get a great deal.

1 – Define your car. Find the exact car with the exact features you want. Know the mileage you want the car to have. Know what the car’s dealer price is. If you go into the negotiation with a soft definition of what you want you will lose.

2 – Find the dealers in your area that have your exact car. Use a website like edmonds.com to locate your car. Make a list of the dealers and get ready to make a deal.

3 – Phone calls only. The only time you want to be on the showroom floor is when you are bringing in the cashier’s check to buy the car. Every dealer wants to negotiate on their terms and in their showroom. The salesman wants to play the game where they “talk to the boss” to see if they’ll accept the price you offered. This is a strategy widely used to create fear that you might not get the car. The whole time both the salesman and the manager are trying to keep the game going. Don’t play their games! They will pressure you into coming down to the dealership so you can talk about the details and “see what they can do”. Do not go to the dealership unless you’re going there to pick up your new car on a pre-agreed upon price.

4 – Don’t name your price. You’ll say “I’m looking for the best deal you can offer me on this car. What’s the very best price you can do?” Mention that you’ll be calling the ten other dealers on your list and asking the same question. Also inform them that you have the money ready and you’ll be able to buy it immediately. Let them squirm under the pressure. Remember, silence is your friend. If they are thinking and not talking let the silence work to your advantage.

5 – Don’t let the conditions of the deal change. One negotiation tactic is to shift the offering to change the balance of the deal. Make sure you stand firm on exactly what you want. It’s common for them to wiggle around and get more out of you and deliver less. If they are changing the deal too much simply call the next dealer on the list. Changing the deal can be things like substituting your car for a newer model, offering upgrades, or providing warranties. These are all intended to skew the real value of the car.

6—Stay firm. Be polite, be nice, and whatever you do don’t cave in. There are plenty of incentives for them to give you a great deal; even if they only break even on the sale. Try to remind them of this. You deserve to pay for a car under their list price.

7—Be patient. The time of year and the time of month can be the difference between a homerun and striking out in this game. As more pressure is added to the dealer to meet their sales quota the more appealing an offer like yours will sound. The idea that they could close a sale within an hour if they offer the lowest price is very enticing. If it doesn’t work the first time around try waiting a month and try again.

These are some basic techniques to find the best deal when buying from a dealer. Some of the tactics will work with used cars but with less effectiveness. Please leave a comment if you have any thoughts or success stories on buying a new car.

Update: PriceHub.com offers actual sale prices for used and new cars. Knowing the price could help you set a price point in the negotiations. Visit PriceHub.com.


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Bankruptcy Scam – Collecting Discharged Debt

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Bankruptcy is intended to provide a fresh start to individuals. When someone declares bankruptcy much of their debt is discharged through the bankruptcy courts. When a debt is discharged it has no legal obligation to be paid back. In other words, the bankruptcy process clears the person of the legal obligation to pay discharged debts. But credit card companies, banks, and debt collectors are illegally pressuring debtors into paying these debts.

One reason we know that this is happening is discharged debts are being bought and sold on the open market. If these debts have no legal obligation to be paid back why would they be bought and sold among banks? The simple answer: These debts are being illegally collected.

There are different tactics used to collect these debts. The most common tactic is when the bank fails to update your credit report. Instead of marking a debt discharged they simply leave it active. As time passes the unsuspecting victim is racking up late payments and ruining their credit score. By leaving a black mark on your credit report it leaves you powerless to get a mortgage, finance a car, or apply for credit cards. A flawed credit history can also affect your career because jobs and promotions are tied to your credit score. When a person discovers these problems they are desperate to have them fixed. When the person calls the credit card company the solution provided by the company involves paying off the discharged debt. The tactic is subtle but effective.

The second types of tactics are more explicit in nature. Collection agencies will call relentlessly to recover the discharged debt. There are claims that employers and family members have been contacted for added pressure. Threats of garnishing the persons wages are common. For someone coming out of bankruptcy these aggressive techniques are nothing new. The difference now is that the person is trying to start over. Paying the discharged debt is easy.

The third tactic involves renewing the obligation to pay the discharged debt by signing a new contract. The credit card company will “cut you a deal” if you sign a new agreement to pay off the discharged debt. In this way the debt has become more valuable to those who would buy it and pursue collection. The credit card companies know you are in between a rock and a hard place and know how venerable you are. They might offer a new credit card to start rebuilding your credit if you claim the past discharged debt.

Unfortunately most bankrupt people don’t have a lot of money (duh!) to hire lawyers and sue the large banks for harassment and extortion. But there are some simple things a recent bankrupt person can do if they find themselves under pressure.

1 – Know what debts have been discharged and keep track of them. Bankruptcy courts and judges will specify in writing what debts have been discharged. It might take some digging. The idea of plunging back into paper work will seem daunting. Get a credit report after the bankruptcy is final and make notes on each of the accounts you have listed in it. Use this as a guide so when the credit card company calls you have your counter attack ready. Keep all your bankruptcy papers in order. When a “mistake” occurs on your credit report having this information will be crucial.

2 – Get a free credit report regularly. Instead of being surprised when you apply for a mortgage keep on top of things by checking your report at least every three months.

3 – If talking to customer service and faxing your bankruptcy documentation doesn’t work try calling attention to the scam. Your local news station would love to dig up the facts on the scam.

4 – Know your rights and stand your ground. These collection agencies have a list of regulations they must abide by. The same applies for banks and credit card companies. Make sure they are playing by the rules.

I hope this helps anyone who has gone through a bankruptcy. Please leave any suggestions or personal experience with this in the comments.

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