It’s Time For A Deal…
Everybody that buys a new or used vehicle from a car dealer is always looking for a good deal. But what is a “Good deal” anyway? From the car dealers perspective, a good deal is a state of mind to the customer. In other words just about 
every customer will have what they think is a “Good deal,” but the reality is, what one person thinks is a good deal another person would say “No way” that deal sucks. Car dealers have several secrets that most people aren’t aware of, but they way they work their deals is one secret that most people aren’t aware of. But it’s not rocket science when you think about their psychology when working a deal; start high and work your way down. Or when it comes to the trade, start low and work your way up.
Customers all have their “hot buttons” when it comes to what a deal really is for them. For some it’s a monthly payment. For others it’s how much they get for their trade. For others it might be the overall price of the vehicle. It could be a combination of all the above or any combination in between. Ultimately a deal comes down to either a reduction in the price, payment and down payment. It could also be tied into the trade. Here are a few examples:
Let’s talk about the trade first. Let say that a customer was looking to trade their vehicle into their friendly neighborhood dealer. The dealer said they would give them $7,800 for the trade. The customer is thinking, “That ain’t a deal! Kelly Blue Book said my car is worth $12,800. This is where the negotiations start right? That’s a $5,000 difference from what the customer thinks their car is worth versus the dealers price.
Let’s say that real money (real trade in value on the vehicle) on car is $9,500. That means that the dealer “low balled” the customer on the trade by $1,700. Now the dealers take will be that this is wholesale value which is all they can pay. They have to recondition the car which is going to cost several hundred dollars to get it ready to resell. Then there is no guarantee that it will sell.
Time To Negotiate A Little More
From the customers point of view, they know their car is worth way more than $7,800. So if the dealer was to give them $8,000, is that a deal. Another $200 more? Nope, I don’t think so. What if the dealer was to give them $8,500 for the car? That’s another $500 or $700 more that they originally were offered. That’s probably still not a deal in the customer’s eye. So what if the dealer gave them $9,000? That’s a whopping $1,200 more than they originally offered.
Now in the customers mind, the customer is starting to think this is looking more like a deal. The customer will take less than the $12,800 figure they came up with as they know that number was more like a retail figure. They also probably know that the dealer will come up more. Let’s say the customer say’s the least they will take is $11,300 for the car meaning that now the two are $2,200 apart.
Assuming this trade is a retail piece of merchandise, the dealer has more to give. Let’s say the dealer is scratching to put deals together (like most are in this day and age). That being the case the dealer say’s the best they can do is $10,000. That’s $2,200 more than they originally offered which is how the dealer is going to try and close this deal. And quite frankly, the customer is thinking the same thing right about now, but the two are $1,300 apart.
At this point the manager will come out and try and close the deal. Any idea what the manager will say? Well, he’ll do his best to try and rationalize how good a deal the customer is getting. After all, the dealer has come up $2,200 on the trade. Assuming that they are still at a standstill the dealer will say, “Let’s do this…let’s split the difference. I’ll go up $650, and you come down $650. I’ll do $10,650. That’s almost $3,000 more than where I wanted to be on your trade. Can we go ahead and wrap it up?”
It’s Deal Time…
The customer is now thinking that they got a “Deal.” $2,800 more on the trade is a deal. But that’s what it took. It took the dealer coming a long way from where they originally wanted to be to put this deal together. In the customers mind, they got a deal, and more than likely in this scenario they did.
This probably isn’t the biggest car dealer secret, but take note to the art of negotiating. The deal is a state of mind, but it ultimately boils down to how much off or how much more you can get.
