Negotiating for a Used Car: A Real-World Case Study

Introduction: Buying a Used Car

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, and many employ time-tested sales techniques that can place buyers at a disadvantage. Instead of blindly accepting a dealer's offer, however, consumers can avoid overpaying by applying effective negotiating skills that help ensure they receive the best possible price.

This paper describes one real-world encounter with a used car salesman in an effort to purchase a 1996 Chevrolet Cavalier from a local, reputable used car and truck dealer. It includes a statement of the goal of the negotiations, the steps taken in preparation, 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 versus the strategy employed by the used car dealer is followed by a description of how power was exercised by both parties. A discussion of the final outcome leads into an evaluation from both parties' perspectives, and a reflective analysis describes the lessons learned as they apply to future negotiations. Finally, a self-evaluation of personal negotiation style — including its strengths and weaknesses and how the concepts learned enriched my understanding of the negotiation process — is presented.

Statement of the Goal and Preparatory Steps

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 as possible and to conclude the negotiations efficiently. To help achieve these goals, a series of preparatory steps were taken.

The target car was first noticed while driving past the dealership. It was prominently parked near the street with a sign on the windshield reading, "One Owner — Low Miles: $3,000." Since I was in the market for a car, this information was mentally filed away until the following Sunday, when I visited the dealership while it was closed. This allowed me to examine the car at my own pace, without the presence of a potentially high-pressure salesperson. The inspection confirmed that the vehicle was in good shape — at least from what could be seen from the outside — except for a minor dent over the left rear tire and a scratched windshield. The mileage could not be read from the outside.

The next preparatory step was to research the vehicle using Consumer Reports and online resources to determine what consumers were actually paying for comparable vehicles. Although a few consumer reports criticized the Chevrolet Cavalier, the vast majority of owners described their experiences in highly positive terms. The $3,000 asking price was found to be slightly below what similar vehicles were selling for in the region, and these findings confirmed that this was the right car to pursue.

Strategy Outline

Since the model was selling elsewhere in the country for more than the asking price, an opening offer of $2,500 was considered appropriate, as it would allow for some wiggle room on both sides. The target outcome — the best alternative to a negotiated agreement — was a final price of $2,750, together with as many accommodations from the dealer as possible.

Armed with the information gathered during preparation, I contacted the dealer by phone and discussed the car and its history. Based on his assurances that the car had fewer than 100,000 miles on it and had only one previous owner, I told the dealer I was on my way and proceeded to the dealership.