What Is Involved in Negotiating the Purchase of a Vehicle?

Negotiation involves the process of discussing an asset$$s terms of sale between a buyer and a seller. It is usually associated with higher$-$priced items, such as a vehicle, home, appliance, or other major $($long$-$lived and expensive$)$ asset.

The process of negotiating involves:

making demands and then dictating the terms of the transaction.

making offers and counteroffers for the terms of the transaction.

A variety of different elements associated with a vehicle$$s purchase are negotiable. Which of the following aspects of a car purchase transaction can you negotiate? Check all that apply.

The loan$$s interest rate and term $($length$)$

The inclusion of a free satellite radio or another option in the vehicle

The vehicle$$s safety features, such as the presence of safety belts and air bags

The old vehicle$$s trade$-$in value

What tactic do car salespeople and their managers do to minimize buyer negotiations?

They push for the buyer to buy it now.

They say to the buyer, $$Take all the time you need, visit other dealers, and call me when you$$re ready$.$

Amy is completely intimidated about the thought of negotiating the price of a new car. She$$s called you and asked for a quick lesson in price negotiations. You$$ve offered to help her understand several basic rules that should make her negotiations more successful.

Which of the following statements will increase the effectiveness of her price negotiations? Check all that apply.

Stop negotiating after one cycle of offer$-$counteroffer.

Start by offering a price lower than the sticker price.

Tell the salesperson that you have obtained offers from at least three other dealers and he or she has the opportunity to meet or exceed their best offers.

Be knowledgeable about the cost of the vehicle before negotiating, and be prepared to walk away from a transaction that involves terms that are not in your best interest.

After listening to your advice, Amy is now considering using a buying service or a professional shopper, but she$$s not clear on how either type of service works. According to your research, you$$ve determined that:

$$ A new$-$vehicle buying service requires the buyer to pay a discounted price from a dealer that has agreed to participate in the service.

$$ Amy will pay a price that is often within of the dealer$$s invoice price. In turn, the buying service receives its income from the in the form of a finder$$s fee.

$$ A professional shopper, on the other hand, charges a fee that is based on the vehicle$$s invoice price and is paid by the $.$ As opposed to actually purchasing the vehicle on the buyer$$s behalf, the buyer can also ask the professional shopper to simply collect price quotes from several dealers. This service costs but requires that the buyer finalize the deal.

If Amy wants the challenge of negotiating her best deal and completing the deal herself, then she should:

Use a new$-$vehicle buying service

Use a professional shopper

Buy the car herself