I love the car buying process. It combines three of my favourite things- cars, debating, and acting indignant. Since Grade 3 I have been able to riddle off the MSRP and option packages for just about any vehicle on the road, and can prepare a fairly detailed treatise on the merits of any one particular vehicle over another. I also worked my way through part of law school at a Volkswagen dealership and got to see just how things work behind the scenes, and generally pride myself on being a calm and logical negotiator. When someone asks for help buying a new car I get just as excited as if Tiny Fey had asked me to rub sunscreen on her back. When my mother told me she wanted to buy a new Toyota Corolla, I had trouble wiping the big grin off my face.
As always, I did my research ahead of time, checking out the dealer invoice costs and researching the deals and incentives being offered by other dealers. I figured out my best price and the range of “acceptable” prices on the vehicle she wanted. Armed with a briefcase full of information and a bright yellow calculator, we sat down with the salesperson to try to close the deal. The initial offer from the dealer was fair, although a little higher than I would have liked. We went back and forth a bit and there was promising movement, but the salesperson soon insisted that there was no more room for negotiation, and that the price we had arrived at was firm. Now I don’t begrudge any salesperson or dealership from making a reasonable profit on a vehicle, and I can respect a dealer who takes the position that they’re not prepared to move any more. But at least be honest about it- man (or woman) up and tell it like it is.
What really bothered me was not that I thought that the price we were at was too high, but that I KNEW that the salesperson was being less than truthful in some of her statements. She didn’t try to tell me that the car was powered by unicorn blood or that it could morph into a boat and a minivan a la Inspector Gadget, but she was more than a little loose with some other facts. For example, she claimed that she “couldn’t keep these cars on the lot” when this particular model had been sitting on the lot since October 2008, but still denied this fact when I pointed to the date clearly printed on the key tag. Similarly, she tried to tell me that my invoice prices were inaccurate when I know from other experiences that they tend to be spot on, and then conveniently couldn’t find the invoice for the car in question when I asked her to substantiate her claim. Nothing huge, but a lot of little things that really grinded my gears. The air was filled with the distinct smell of seared polyester, as if someone’s pants were very much on fire. Bluffing and posturing is part of any negotiation, but there’s a fine line between strategic negotiating and being a wiener in a plaid-jacket.
Even so, things were looking good and we were at a price that was within the “acceptable” range. However, things fell apart when she told me that there is generally no room whatsoever for negotiation on Toyotas, that they have a “take it or leave it” pricing structure. When I pointed out that there was room on the last Corolla my mother had bought, and on the Matrix I had been looking at a year earlier, and on the Tacoma I had helped a friend purchase just a few months prior, she flatly stated “I don’t believe that.”
Uh, did she just call me a liar? Did the woman who just spent the past 20 minutes telling fairytales about the invoice pricing system, profit margins, holdbacks and the new and used car markets as a whole just call ME a liar? Sweet merciful lamb in the holy manger! I almost had a mini-stroke. This was now personal. My goal was no longer to get a good deal on a new car, it was to obliterate her and her lineage. Which, in retrospect, was not a good approach.
We went back and forth for a few more minutes, my mother kicking my leg as if to say “You got your price, now take it!”, and nudging my side to say “You’ve made your point!”. Yet I was relentless. When things didn’t move any more, I thanked Ms. PantsOnFire for her time and walked out, mumbling nasty, nasty things to myself, mostly quotes from Machiavelli and Sun Tzu. The whole drive home I replayed each scene in my head, thinking of things I should have said and formulating scathing comebacks to her sales babble. I got home, opened a beer and realized I had broken my first rule of successful negotiating- I had let my emotions get in the way of focused logic. As a result, my mother didn’t get to drive home in a shiny new Corolla, I spent the night brooding, and my wife (and, after her departure, my cats) had to put up with my endless refrains of “What I SHOULD have said was…”.
It’s easy to get caught up while negotiating and to lose sight of the original objective- in this case, a final price within a certain range. Instead, I allowed myself to get too invested and to take a flippant (albeit unprofessional) comment as a personal insult. Far too often other negotiations can take the same course, with personalities and egos taking more prominence than the real issues. Of course, emotion in negotiation can have the opposite effect as well, keeping people in talks when it no longer makes sense rather than driving them apart. Especially in consumer negotiations, many buyers will fall in love with a car and allow themselves to get fleeced because of an emotional attachment. In either case, the end result is a negotiation that goes off the rails.
In theory, lawyers should be skilled at setting aside emotion and focusing on facts, but my experience has shown quite the opposite. If anything, many lawyers seem much more susceptible to ego and pride. Sadly, it is ultimately their clients who pay the price and in many cases such shows of bravado are even encouraged as a hallmark of good lawyering, despite the fact that they rarely advance negotiations.
My advice? Approach any negotiation strategically and with Vulcan-like coldness and logic. You’ll get better results and not spend your nights lying awake trying to think of witty rejoinders you could have used. Live long and prosper, folks.
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A buddy of mine is a lawyer. He hates to negotiate even though he is extremely good at it. He maintains his focus on the other side, never giving anything up unless he’s sure that the other side wants it more than he does. He says that the other side usually really wants something that matters very little, and once he figures out what that is, he’ll be able to close the deal. He leaves his ego out of it and maintains his calm.
It’s apparent that you know a fair bit about the car dealership business. You said “I did my research ahead of time, checking out the dealer invoice costs and researching the deals and incentives being offered by other dealers.” I’d be interested in reading a post about the best way to get the information you described. In addition, you mentioned a “reasonable profit on a vehicle”. What amount seems reasonable to you?
The last time I bought a car, I used carcostcanada.com to negotiate for me, but they don’t seem to negotiate deals any more. So, the next time I buy a car I’ll need to know more.
Thank you for this post. You had me laughing and laughing in public, even. It’s also very timely because I’ll be buying a new car soon. As the above poster, I’d love to hear your tips.
What’s your opinion on Carolla vs Civic?
What an annoying salesperson!
I guess you just have to stand your ground and ignore the crap they try to feed you.
Great post- thanks for the laughs!
Still, I have to suspect that you’re playing a little “fast and loose” with the facts here. Come on- MORE exciting than Tina asking you to apply sunscreen? Really?
What happened with your mom? Did she get her car somewhere else? Did you help?
I’d also be interested in hearing where/how you do your research.
Michael - I agree that a post on the car buying process is a good idea. I’m working on it already! While carcostcanada.com doesn’t offer a negotiation service anymore, their Wholesale Price Reports are the best in the business. Anytime I’m shopping for a new car, I’ll make sure I get their report. It’s well worth the cost. In terms of a reasonable profit, it depends a fair bit on the vehicle and the make, but 3-4% is usually quite reasonable.
Melanie - Corolla versus Civic is a tough call and could be the subject of a pretty in-depth post! Both are solid vehicles with similar attributes. I like the driving feel of the Civic more, but find the Corolla to feel a little more sturdy, although these are pretty subjective factors. If I had to choose, I would probably pick the Corolla, but you won’t go wrong with either. While at the dealer, check out the Honda Fit as well- it’s less expensive and smaller than the Civic, but it’s a fantastic little car. It’s probably my favourite entry level car currently on the market.
Strump - Annoying is an understatement! I’ve got a pretty high tolerance for BS, but she pushed my limits.
Mrs. Embers - Mom is still car-less, and she reminds me of that fact several times a day. I suspect she’ll be getting a Corolla once I can swallow my pride and head back to the dealer.
I agree that prep is the most important thing in successful negotiation. 2d is emotional detachment, as MGL recognizes. But how? I think the practitioners of Zen have much to teach us (as would Spock and Data, if they were real). In fact I teach a seminar “Zen and the Art of Negotiation.” But one might start by just googling Zen and Mindfulness and beginning to read.
You know the funny thing is that in some negotiations, the “game” is to be emotional and yell and scream. Some people don’t think that it is a true negotiation unless you have walked away from the deal a few times- it doesn’t mean getting personal but it does mean showing emotion (and, really, how fun is it to starting quoting concepts out of Getting to Yes). This is not far off from Michael James comment- know the person sitting on the other side and adjust accordingly.
It is getting to month’s end. I am sure the salesperson will become a revisionist historian for her commission.
MGL, you just made my day.
P.S. What’s that I smell….could it be….pants on fire??
Thanks for the extra tips. I’ll be looking at carcostcanada.com for sure.