Negotiation skills are important for various situations in life. Acquiring these skills early in life greatly reduces the chance that one will be taken advantage of by unscrupulous individuals. Negotiation skills can be used in the business environment as well as everyday life. For these reasons there is great value placed on having negotiations skills. The purpose of this discussion is to explain the use of negotiations in the context of a real-life scenario.
Description of the situation
Negotiation is always a tricky endeavor and the purchase of a new home or vehicle can be particularly problematic. This discussion will focus on the purchase of a new car. The vehicle is a 2011 Acura TL purchased at the Fountain Acura Dealership. I also have a vehicle that I hold the title to that I wanted to use as a trade-in so the cost of the vehicle could be offset.
Preparation for the Situation
The first step in my preparation process was to look at reputable reviews concerning that 2011 Acura TL. For such a review I headed to Edmunds online car reviews. I chose Edmunds because it has been established as a company that gives unbiased reviews of the latest cars. When I researched the car I found that "fault. It has compelling performance, perfect crash scores, a spacious interior, solid build quality and plenty of the latest technologies ("2011 Acura TL")." The aspect of the review that struck me was the perfect crash scores. Safety is of the utmost importance to me and knowing how well this car has done in crash tests made it extremely appealing. In addition the site reports "The base model 2011 Acura TL is front-wheel drive and is powered by a 3.5-liter V6 that produces 280 horsepower and 254 pound-feet of torque. A five-speed automatic is standard. In Edmunds performance testing, the base TL went from zero to 60 mph in 6.7 seconds -- on par with most base model luxury sedans. EPA-estimated fuel economy is 18 mpg city/26 mpg highway and 21 mpg combined ("2011 Acura TL")." These factors were also important in my quest to purchase a new car. I also compared the Acura to other cars in the same class. I discovered that as it relates to safety, reliability and the ability of the car to hold its value -- it is one of the best in its class. As such I made the decision to purchase the 2011 Acura TL.
In preparing for negotiations I took care of some practical and extremely important concerns. Namely, I sought to discover the value of my trade in and the value of the car that I wanted to purchase. A 2011 Acura TL is $35,305 for the base model and my trade in is worth $7,000 according to the Kelley Blue Book value. It was important to know these values so that I could negotiate a fair and accurate price for both vehicles. Understanding these numbers lessened the likelihood that I would be taken advantage of. I also wanted to know these numbers so that I would not allow my desire to have the new car overtake me and inadvertently pay too much for the vehicle or receive too little for the trade in of my old car.
I knew that I did not want the negotiations to fail so I was certain to set clear objectives. I did this by establishing how much I could afford to pay each month and in so doing establishing how much I needed to get for my trade in to offset the cost of the purchase of the new vehicle. I can only afford to pay $33, 000 for the vehicle before the additional $7,000 is subtracted from the trade in. The total cost would be $26,000 and this would be the amount financed. I also knew that I would still have some additional amount to pay related to taxes and tags.
I was also adamant about understanding the strengths and weaknesses of my position and the position that the salesperson might have. My strengths are that the market is still struggling to recover and as such car sales have decreased. The salesperson has likely struggled harder to make money from commissions. If I can be persuasive in my argument that the car should be sold below the retail price I am likely to have very little problem getting the car. I could also argue that the price I am asking for the car is not that far from the retail price.
Prior to entering the negotiations I wanted to make sure that all of my information was correct and I did not have to depend on being "quick and clever" during the actual negotiation. For this reason I imagined different hypothetical issues that could arise during the negotiation so that I would be ready and prepared to present my case. I also believed that the salesperson might be dissuaded from meeting my price because it would mean a lower commission. I reasoned that having a lower commission would be better than having no commission at all.
I also worked on what I wanted to communicate to the dealer. The first step in this communication was to identify the goal of the conversation or what I wanted to achieve through the negotiation. My goal was the purchase of a 2011 Acura TL at a fair and reasonable price. To achieve this goal I clarified my thoughts before speaking with the dealer. In this situation this meant knowing the price and the specs the car should have at the established price. I also had to keep in mind the price of the trade in and how much I wanted to spend per month on a car payment.
In preparing to communicate with the car dealer I also took into consideration where I would be buying the vehicle and the context of buying a new vehicle from a dealership as opposed to buying a vehicle from a private owner. With these things considered it was important for me to research and find out whether or not the dealer was offering any incentives such as cash back or 0% interest for a certain number of years when financing a vehicle. This particular dealer was in fact offering 0% financing for up to five years for qualified buyers. When negotiating I wanted to be sure that this incentive was offered to me.
Nonverbal communication was also an aspect of communication that I took into consideration when preparing to purchase this vehicle. Factors such as eye contact and a handshake were taken into consideration and I planned to have good eye contact with the salesperson and a firm handshake.
All of the information that I gathered from my research into how much the car should cost was what I planned to use when conveying something of value to the salesperson. I wanted the individual to know that I came prepared to make a deal and that I knew how much the deal should cost me. I also went back over the prices for the trade in and the new vehicle so that I was ensured that I had a firm understanding of the appropriate price points.
Lastly I wanted to ensure that all of my actions were reflective of wanting to negotiate with the salesperson. I was prepared to be dressed appropriately and to make a good first impression. I wanted the salesperson to know that I was not there to waste his or her time.
Summary of the Exchange
I entered the Fountain Acura Dealership lot on a Thursday afternoon and parked my car. I began to look around and I saw salesperson coming toward me. As he approached me he proceeded to extend his hand to greet me and he told me that his name was Tom. I made eye contact with him and gave him a firm handshake. He asked me what he could help me with and I told him the make and model of the car I was looking to purchase. One I told him what I was looking for, he proceeded to tell me why the car was a good buy and all the specs that the vehicle had to offer. He also let me know of the incentive of 0% interest being offered at the dealership on 2011 vehicles. During this entire exchange we were making our way to the specific vehicle that I wanted to purchase. I checked the specs and the price listed on the window. The price was $5,000 more than I was willing to pay. The salesperson asked me if I wanted to test drive the vehicle and I let him know that I would like to take in on a test drive. He went back insode the dealership to retrieve the keys so that the car could be test driven. We drove the vehicle for about 20 minutes. I enjoyed the way the vehicle rode and I was even…