As I grow wiser and older, I have learned a thing or two about big-ticket item negotiations along the way. As we prepare for some life-altering changes in our lives (more on that in the future), we had to make a decision now on a newer, bigger vehicle. After several weeks of searching, just this week we settled on purchasing a used 2010 Honda Odyssey van from a local dealer. (Go on, give me heat for dropping the sports car for a…mini-van! Where is my manliness going?)

Like anything associated with the InACents lifestyle (saving money, deal hunting, etc.), we recently came across an offer to test drive a Chevrolet vehicle and in return for our time, we would receive a $50 Macy’s gift card. For me, it was a no-brainer, because I could easily dash up to the dealership over lunch, search for vehicles that met our criteria, be in-and-out over a hour period, and get paid $50 to do so.

Sure enough, the process worked flawless, so much so that the dealer activated the offer for both my wife and I, scoring us $100 in free gift cards for less than a hour of my time. By using this quick-in and quick-out process, I was also able to vet which vehicles would work for our family and start the process of price research.

As you can tell at this point, we did not purchase a Chevy, but a Honda from the used car side of the lot.

The Negotiation Process

Fast forward to later that same evening as my test drive, and the power went out in our neighborhood, making home dinner preparation difficult (who wants pot stickers by candlelight?). So after heading out to grab a bite to eat, our trip home past the dealership was a good opportunity to stop in quick and show the Honda Odyssey to my wife, and test drive the vehicle. The only dilemma…those two theatrical geniuses in the back seat.

Any parent of young children knows of the struggle of strapping in car seats into a vehicle. Having to wrestle seat belts through tiny crevices of a car seat while avoiding scraps of soggy cookies (is that even what this is?) is a job left for professionals. Fortunately, I have become quite the master at having to finagle those safety apparatus to the roof I mean seats.

The test drive went great and we both loved the vehicle. The boys even felt comfortable enough to nakify themselves, quickly ditching their socks and shoes despite the freezing weather. After our return, it inevitably meant the dealer wanted to talk numbers. After a short couple of minutes inside, the sales rep quickly learned the dilemma of two young boys during the witching hour. Up on the chairs, off the chairs. Run around the car, chase around the car. Push, pull, yell. What about me dad, what about me? (Somehow my teachings of patience to build wealth has not been going as planned; where did I go awry?)

All these kids at the negotiation table meant typical multi-hour beatings from the car dealership over price was infeasible. Within a few short moments, we had agreed upon a trade-in price for our vehicle, and just had to negotiate the price of the van.

I do not want to interject a long discussion on the negotiation process in this part of the story, so please scroll to the end for discussion on the tips to save you money at the negotiation table.

To our rescue at this point of the early negotiations was bedtime. When presented with the reality of having our kids with us during the negotiation process, the sales rep realized our urgency to get home. There was no closing the deal now. Which left the bottom line in the hands of the dealership. It was now their responsibility to get us to agree upon a price and back into the dealer.

By researching things ahead of time online, I was able to know a good price not only on the van, but also on our trade. This really is key to the negotiation to avoid wasting anyone time. In our case, there was very minimal negotiations for the most part. It was all spelled out online on what the vehicles were valued at, and they could either make the deal work, with or without us, and here comes the beautiful part.

By having the kids with us during the crucial negotiation process, we were able to get out of their quickly. With us not sitting in the chair at the dealership, the negotiations were on our side. It was in the hands of the sales team to come up with their best offer to get us back in the dealership. Typically, the dealers can wear the customer down through long, drawn-out negotiations in the office. When they tire you enough, they have you at their mercy.

So by getting the negotiations to happen over the phone, it saved us a huge amount of hassle. After a couple quick calls back and forth, we had agreed upon a sale price, and the hard negotiation process was complete, all without us hardly being in the dealership.

Online Vehicle Price Comparison

I am the type of person who is never satisfied with a deal. If I score a major money saving price, I am sure to keep shopping it around just in case the price drops again. My system works perfectly with travel, where prices constantly fluctuate.

So after securing our price on the Honda Odyssey, but before we went in to sign all the paperwork, I decided to do some online comparison shopping. This is where the internet becomes such an invaluable tool.

The Edmunds website has a built in chat feature when searching the used car inventory. With a couple clicks of the button, I was able to chat with various dealers on similar vehicles, telling them the exact deal I was about to finalize and see if they could beat the offer. If they were $10 cheaper, I knew I had some wiggle room. In all cases, no other dealer could match our price, helping me feel satisfied that my existing deal was good.

Again, the key here is that I, the consumer have the power in the negotiations when I am sitting at the information highway. If someone else wants my business and is willing to undercut the other guy by $100, then it is in his best interest to do so because as soon as I close the chat session, I am a lost customer.

Could the man-to-man negotiations in person had better results at these varying dealers? Possibly, but not in reality since dealers are experts in their field at the game of negotiation and wearing the opponent down.

The Wrap-Up

So what are the lessons to be taken away from this car buying experience?

Here is where I want to point out one major feature of the car buying negotiation process that you need to avoid! It pains me when I hear people say they went into the dealership to negotiate their car payment. That is the first thing the sales rep always asks. Yes, ultimately, all you really care about is how much is coming out of your pocket on a monthly basis. In reality, car payments allow the dealer to play the profit game to their maximum potential.

The dealer wants to get you into the 4-square method, where you negotiate the price, trade, down payment, and interest all on one sheet. To familiarize yourself with the dealing of the four square method, jump down on this page on the Confessions of a Car Salesman page on Edmund’s (you can go back and read the entire article, but this link jumps right to the page discussing the 4-square process). Great article into how the car buying process works, and your tool to better negotiations.

The real key to the negotiation is never letting them get to the square paper. You want to negotiate each terms independently, not together. If you are buying the car, only negotiate that price, not the trade, down payment or APR. Discuss the trade after the agreed upon price of the new vehicle. Financing and down payments will come at the end when you are finalizing the paperwork. If they do not meet your desired payment, either come up with more down payment or walk away. You are not locked in yet.

In our case, we finalized the trade first, allowing us to then lay the groundwork for the new car. We laid out our bottom line on both the new vehicle and the trade right away in the essence of time, but never discussed payments. Your monthly installment is what it is after the hard costs are finalized.

Investing in kids at the negotiation table.

I say this loosely, but having kids with us at the negotiation table was a crucial factor in saving hours worth of negotiating. I am not saying grab your sister’s kids everytime you go to negotiate a big-ticket item, but the reality is every time I stepped foot into that dealership, I made it known that my time was limited. Kids are hungry, need a nap, or I am on my lunch break all shorten the dealers time frame to make a deal happen.

In today’s information age, your biggest time and stress reliever is not sitting in the dealer chair. Make them work for your business to when you feel comfortable coming in to sign the final paperwork.

This is the first car buying experience where I walked away WITHOUT buyer remorse because I felt confident in all of the pieces of the purchase.

– New vehicle purchase price (CHECK)
– Trade in price (CHECK)
– Down payment (in our instance it was the equity in the trade; CHECK)
– Loan terms (CHECK)

Make sure before heading into the final finance office that you are aware of your credit scores AND have an idea of what kind of rates you qualify for the purchase at hand. With a couple clicks of the mouse, I knew exactly where my wife and I stood on credit scores and what comparable interest rates were being offered. If the dealer did not land me a good loan, I could easily have my bank issue us the funds by my prearranged deal).

Sitting at the negotiating table is going to mean the dealer figures out a way to make you pay a little more. It is the sales representatives job to make the most money possible, padding commissions. Avoid the negotiation table, and you just achieved…

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