Tips for negotiating prices

By M.Farouk Radwan, MSc.

Tips for negotiating prices

If you are buying a car, a house or anything that is a bit expensive then it makes a lot of sense to learn how to negotiate the price the right way so that you save some of your money.

With proper negotiation skills you might be able to save yourself a large some of money that you would have paid otherwise if you didn't have good negotiation skills.

Few days ago i went to buy a Audi TT roadster. Because the customs here in Egypt, where i live, are sometimes as high as 270% for such cars the price of the car is almost tipple its original price everywhere else. That's why i had to go through long negotiations to save some of my money.

In this article i will tell you how to negotiate prices the right way.

How to negotiate prices the right way

  • 1) Show that you are in need and you are done for: One of the worst mistakes you can do in negotiations is to show that you are really in need of something. Once the dealer or the person you are negotiating with finds out that you are in need he will raise the price or at least hold on to the price he initially gave you. It works the same way in relationships, show someone that you are needy and you will turn him off (see The secret to attracting love). One of the best ways to hide this need is to ask about different products and then to offer to buy only one (as if you didn't want that one badly from the beginning).
  • 2) Reverse the role: Go to a dealer and tell him how much would you pay me if i brought you a car with the following specifications : bla bla bla. Make sure you give specifications that are a bit close to the car you want to buy but not identical. Usually the dealer will reply back with the car's true value or even a cheaper one. At this point surprise him by telling him that you are here to buy that similar car he owns and not to sell a one that you have (see also Effective negotiation skills)
  • 3) Don't use all of your cards at once: Lets suppose you knew that the property you are going to buy had some issues that will require spending some money on it after you buy it. In such a case telling the dealer about your discovery in the beginning will let you run out of cards. Instead you should wait until you reach the lowest price you can get then use such cards to get an even lower price
  • 4) Collect information from similar dealers One of the best ways to negotiate prices is to go to dealers who are similar to the one you are going to buy from then collect information from them about similar properties without showing that you want to buy them. For example, yesterday we went to dealer who sells the Audi TT and we asked him about other cars then during the conversation we mentioned the Audi TT. The man gave us more info than we need and we didn't even reveal that we wanted to buy such a car. During the negotiation with the dealer we intended to buy from we used the information we collected from the other dealer to pressure him (see also Body language in sales)
  • 5) Break up!: This negotiation tool can be a double edged sword but in many cases it will help you win the negotiation. Tell the dealer that you are not going to buy except for a specific price and if he disagreed then tell him that you are no longer interested and that he should call you if he changed his mind. Under that kind of pressure many dealers will call you back to offer you a lower price. Notice that in such a case the person who calls first is the one who will lose the negotiation because this call will reflect the real need of the caller
  • 6) Don't be emotional: don't appear excited, sad, happy or reveal any other emotion that could let a dealer know how much you care about buying the car or the house. Be unpredictable and boring. This will force the dealer to reveal his own emotions and at this point you will know exactly about his needs (see How to be in control of your emotions)

Patience and price negotiations

The more patient a person is the more likely he is to win a negotiation. Its very common that you find yourself forced not to talk to the dealer for few days because you didn't agree on a price. The one who will lose patience first and call the other one is the one who will be in the weak position.

If i were to summarize all of the previous points in few lines i would say that the more patient a person is and the less needy he appears to be the more likely he is going to win the price negotiation.

In 2008 i became a dot com millionaire because of that site and that's why i am buying an expensive convertible car at my twenties. For more information on how to make real money check out the Ultimate guide to becoming rich.

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