Negotiating for a Used Car

Negotiating for a Used Car in the Real World

Buying a used car can be a daunting experience because it demands effective negotiating skills that many people may not believe they possess. Used car salespeople can be highly intimidating and persuasive, after all, and many employ time-tested sales techniques that can place some people at a disadvantage. Instead of blindly accepting the offer of the used car dealers, though, consumers can avoid paying too much for a used car by applying some effective negotiating skills that will help ensure that they receive the best possible price. This paper describes one such real-world encounter with a used car salesman in an effort to purchase one of my first cars, a 1996 Chevrolet Cavalier from a local, reputable used car and truck dealer, including a statement of the goal of the negotiations, the steps that were taken preparatory to the negotiations, an outline of the strategic approach used, and an analysis of the events that transpired during the negotiations. An assessment of the effectiveness of this strategy vs. The strategy employed by the used car dealer is followed by a description of how power was used by the parties to the negotiations. A discussion concerning the final outcome of the negotiations is followed by an evaluation of the outcome from the respective viewpoints of both parties in the conclusion and a reflective analysis describes the lessons learned from this experience as they apply to future negotiations. Finally, a summary self-evaluation of my personal negotiation style, including its strengths and weaknesses and how the concepts learned how enriched my personal understanding of the process of this negotiation and its outcome is presented in a reflective analysis.

Process Analysis

Statement of the Goal

The overarching goal of the negotiations for the 1996 Chevrolet Cavalier was to purchase the vehicle for less than the sticker price of $3,000; secondary goals were to receive as many perquisites from the dealer in the process and conclude the negotiations in an efficient fashion. To help achieve these goals, a series of preparatory steps were taken as described below.

Preparatory Steps

The target car was first noticed while driving by the car and truck dealership. It was prominently parked near the street and had a sign that said, "One Owner -- Low Miles: $3,000" on the windshield. Since I was in the market for a car, this information was mentally filed away until the next Sunday when I visited the dealership when it was closed. This allowed me to take my time in looking the car over without the presence of a potentially high-pressure salesperson and confirmed that the vehicle was in good shape, at least from what could be seen from the outside, except for a minor dent in the body over the left rear tire and a scratched windshield; however, the mileage could not be read from the outside. The next preparatory step was to research this vehicle model using Consumer Reports and online resources such as Car.com to determine what consumers were actually paying for comparable vehicles at present. Although I was initially alarmed to find several consumer reports that blasted the Chevrolet Cavalier, the vast majority of owners described their experiences with the Chevrolet Cavalier in a highly positive fashion. The $3,000 asking price for the Chevrolet Cavalier was determined to be slightly below what was being paid in my region of the country, and these findings convinced me that this was the right car. Although I did not actually sit down and formulate a strategy for the negotiations, the approach used can be generally described as follows.

Strategy Outline

Since the model involved was being sold elsewhere in the country for more than the asking price, an opening offer of $2,500 was considered appropriate as this would allow for some "wiggle room" on both sides with a target offer of $2,750 together with as many accommodations from the dealer as possible being the objective of the best alternative to this negotiated agreement. Armed with the information gained during the preparatory steps and this objective in mind, I contacted the dealer telephonically and discussed the car and its history. Based on his assurances that the car had less than 100,000 miles on it and that it only had one previous owner, I told the dealer I was on my way and proceeded to the dealership. What transpired thereafter is described further below.

Analysis of Negotiation Tactics

After arriving at the dealership, I parked near the Chevrolet Cavalier and took the opportunity to look inside since the car was unlocked and there was no one around. The closer inspection confirmed my previous assessment of the vehicle and I proceeded into the dealership proper where I was greeted by the owner, "Archie," who shook my hand briskly and introduced me to his father who was sitting nearby. The office was profusely decorated with football memorabilia and when asked, Archie confirmed that he was the quarterback in the framed pictures and newspaper articles on the wall and that the trophies were from his glory days in high school.

Although I am not particularly interested in football, I used this chance to "schmooze" a bit about the awards to help break the ice. When the conversation turned to the car in question, Archie became more businesslike and assured me that he had driven the car home himself and as far as he could tell, the vehicle was in top-notch condition and offered me a test drive. The car started right up and the engine sounded okay as far as I could tell. Following a test drive, it was determined that the horn did not work and that the scratched windshield was not only unattractive, it adversely affected driver visibility as well. I returned to the dealership and reentered Archie's office and sat down, thinking my initial offer of $2,500 might be viable under the circumstances. I mentioned the windshield and horn issues to Archie who assured me these could be easily fixed as part of the deal.

Recognizing that Archie had far more experience in these types of negotiations and that he would be expecting a lower opening offer, I simply asked him if the $3,000 was his best price, thinking that he would offer a slightly lower price that would provide the basis for further negotiations. Archie responded, though, by saying $3,000 was his best price if he fixed the windshield and horn. This took me a little off-guard since I had not considered this alternative, but having paid for a replacement windshield in the past, I realized this was a legitimate offer. In a final effort to receive as much value for my money as possible, I conceded the price was far but that the car might experience more problems than I could afford and asked Archie about a maintenance agreement, citing the various consumer reports that I had read as my source. After rummaging around in a desk drawer for a couple of minutes, Archie found what he was looking for and, to my surprise, agreed to provide a 6-month maintenance contract that would cover just about anything that went wrong with the car and told me he ordinarily charged $300 for this, but I would have to pay a $100 deductible for repairs.

After the papers were signed and the money changed hands, Archie provided all of the paperwork in an envelope for me and told me he could have the car fixed in a couple of days but that I should call first to make sure it was ready before I came back. Two days later, as promised, Archie confirmed that the car was ready for delivery and could be picked up at the mechanic shop next to his car and truck lot. The keys were in the vehicle and the mechanics assured me that the windshield and horn had been fixed. I drove my newly acquired Chevrolet Cavalier with just 92,855 miles on it, as well as a new windshield and horn.

All in all, I came away from these negotiations feeling that my main goal of purchasing the vehicle for less than $3,000 had been achieved because of the repairs that were made and the free maintenance agreement that was provided which was worth $300 and the experience was more positive than I had expected. The respective uses of power are clearer in hindsight, of course, but the fact remained that at the time, I had $3,000 in cash and Archie had the car I wanted which formed the basis for the negotiations that ensued.

Conclusion

The final outcome that resulted from the above-described negotiations was the purchase of a 1996 Chevrolet Cavalier with a repaired horn and brand-new windshield from Archie's Used Cars and Trucks for $3,000 cash, a price that also included a 6-month maintenance warranty and, as it turned out, a new set of jumper cables the dealer threw in for free (the schmoozing about Archie's football days paid off it seems). In retrospect, the argument could have been made that the Chevrolet Cavalier was very old and was not worth $3,000, even with a brand-new windshield, horn and the maintenance agreement worth $300. A counter-offer a $2,500 could have been proposed and negotiations could have continued until Archie conceded a few more dollars or the deal broke down. As noted above, though, a secondary objective was to successfully complete the negotiations in an efficient fashion, and this knock-down, dragged-out approach was not deemed appropriate or even potentially effective since Archie had made some valid points concerning the expenses involved in repairing the vehicle to my satisfaction. In sum, both parties to this negotiation received most of what they wanted and the car has performed admirably to this day.