How My Friend Outsmarted a Car Salesman


photo credit: daveynin

My friend always gets great deals on cars. Like most of us, he shops around and collects price information. What sets him apart is his ability to close the deal.

He gets the best deal because he uses the three following techniques:

  • He avoids price traps (he thinks in dollars, not percentages)
  • He stays relaxed during negotiations (slow and steady wins the race)
  • He makes his threats credible (he sometimes walks away)

The genius is that he accomplishes these things so forcefully. I’ll use a recent story to illustrate.

Nearing the end of a negotiation, he and the car salesman were haggling over $50 on a $20,000 car. Neither was budging, and my friend threatened to walk.

The salesman responded, “Sir, are you really going to walk away from a good deal over just $50? That’s such a small amount of the deal.”

His reply: “Yes I will walk away. $50 is a lot of money. It’s the difference between staying at home and taking my wife out to a nice dinner.”

The salesman quickly lowered the price and my friend got his new car.

I can think about a thousand times salespeople have tried to get me on the percentage argument. Now I have a good answer.

This article is included in the twenty-fifth Carnival of Money Hacks

Related Reading on Negotiating

Want to Win? Try Relaxing

Be Reasonably Unreasonable

Why Patience Pays Off in Negotiations (a game theory perspective)

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  • Evan

    I sat with my dad as he did the same thing. The car salesman had previously agreed to the exact price of the car with my dad. When he tried to explain that there were some “finishing up costs” my dad said he wouldn’t budge and actually got up, walked out and the salesman followed, apologized and my dad didn’t pay a cent more.

  • http://www.ittybiz.com Jamie

    All it takes is to put it in perspective. A “small” amount of money to one person means something completely different to someone else.

    I remember getting into an an argument with my bank who had overcharged me $5. I was a student at the time and it was a big deal to me. The teller told me that they didn’t need to refund the money to me as it was such a small amount. I told him that if it was such a small amount, then the bank shouldn’t have any problem refunding it to me, which he then did.

    As with the car sale, it is not up to the business to decide if the amount of money in question is small or not. All you need to do is show them that it matters to you.

  • Huey

    I used the “fax attack” to by my car for several thousand under invoice.

  • http://www.mindyourdecisions.com/blog/ Presh Talwalkar

    Evan: I admire that your dad did the same thing. It’s not always easy to put your foot down!

    Jamie: I love your comment. This exactly matches my opinion–no one else should judge how you spend your hard-earned money (“mind your decisions”). I’m glad you out-talked the bank teller.

    Huey Kwik: Here’s a good explanation and story about the “fax attack”:

    http://www.autopia.org/forum/car-driver/74765-buying-new-car-read-here-first.html

    Glad to hear a personal story that it works.

  • Joe P

    Great article Presh!

  • http://www.strikingup.com/ Trevor – 14 Year Old Money Blogger

    Wow. Awesome awesome awesome article.

    Sure shares some tips to get cheaper car prices. Money is different for everyone. To a big corperation, $50 might be a tiny bit but for a normal person $50 can buy a MP3(not an Ipod though), a nice dinner for 2, a Wii video game. If you just explore the options, there’s a lot a tiny bit of money can do.

  • Car Salesman

    Your freind did not get a better deal. Actually he probably overpayed there are to many different ways we make money it literally is impossible to beat the car salesman or (car dealership). First off did he finance the vehicle through the dealership? because if he did he lost money.. Did he pay for any Tax Title and Fees if he did he lost money. Instead of taking special financing or 0% for 60 mnths and opted to take Dealer Rebates he lost money. And no matter what.. the dealerships makes holdback after selling a car which is usually around 500- 1000

    Just Understand people its a Business Just like going to the grocery store and buying milk or food you will overpay because of mark up..





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