Knowing how to negotiate with a dealer when purchasing a truck, car or equipment can be the difference between you getting what you want at a good price or not.
Given the current situation with COVID-19, the odds of being able to negotiate a good price leading into the end of this financial year are very good, so you certainly want to make sure you take advantage of this.
In my experience, these are 7 things you must do to ensure you secure the best price for the truck, car or equipment you are purchasing:
If you are lucky enough to be in a position to upgrade or buy this financial year, make sure you are informed about the Increased Asset Write-off Scheme or Accelerated Depreciation Scheme; a purchase this Financial Year could mean saving money on your tax bill and therefore allow you to preserve working capital. You can read more about both these schemes via our post titled Increased Instant Asset Write-off.
1/ Visit at least two – three dealerships online or in person
Often one of the best ways to be informed and secure the best price for the truck, car or equipment you wish to purchase is do your research prior to starting any negotiations.
In my experience the best way to do this is to pop into at least two or three dealerships to get a feel for how the goods perform, learn any finer details and to determine the price the dealer may be willing to sell the goods to you for.
While for a small business owner (myself included) juggling several tasks, this can often seem like an arduous process, shopping around before starting negotiations can sometimes mean the difference between you getting a good deal or not on the goods you wish to purchase.
Tip – If you are really stretched for time or would feel more comfortable given the situation with COVID-19, make sure you at least do some research online so when you start the negotiations you are more informed.
2/ Decide on the figure you are prepared to go to before you start negotiations
Easier to do once you have done your research like I have suggested above (even if just online), deciding on the ideal price you would like to pay for the goods ensures you don’t get caught up in the art of the negotiation and end of up regretting the amount you agreed to after the negotiation has ended.
I often do this by trying to have in mind the ideal price I am willing to pay and the highest price I am willing to pay and regardless of what happens during the negotiation I don’t go above this.
3/ Time your negotiation right
Getting the timing right is a crucial step and can mean saving more or less on the truck, car or equipment you wish to purchase. In my experience, as a rule of thumb generally 10 – 14 days before the end of the month is the best time for the reason being that as the end of a month or the end of financial year approaches sales people start to feel the rising pressure to meet their targets (if they have not met them already) and so therefore may be more willing to negotiate on the price of the goods as securing your sale could mean the difference between them making their target for the month or not. And let’s face it, given the current situation with COVID-19, most businesses are eager to make any sale that they can.
Make sure though, if you do choose to take this tact and are paying with finance, that you are definetly pre-approved for finance before hand and that you still allow enough time for the goods to settle prior to the end of the month. Given the current situation with COVID-19 and the longer lender response times on most occasions , this may be longer than you think. If you are working with a good broker they should be able to help guide you on these lead times to ensure the goods settle prior to a looming deadline such as June 30.
4/ Don’t let them up-sell you on the extras (unless you need them)
Have you ever been to McDonald’s, ordered a burger and then been asked if you would like fries or coke with that? As you may be aware, as you may also do this within your business, the reason they do this is because they are attempting to increase their revenue by increasing the amount you spend with them; also commonly referred to as the order value.
Well the truth is dealerships are no different to this and also want to maximise the dollars that you spend with them so when you have negotiated a good price on the car or machine will look to increase the value of your order by enticing you with extras. In the case of a new car, this could be things like after market parts and/or accessories such as tinted windows, bluetooth (if not factory fitted), etc and while some of these extras can be nice to have make sure you actually want them before signing the purchase order.
A good trick that I use when faced with a decision like this, is to walk away and sleep on it as it ensures you are making the decision for the right reasons and not because you are being pressured or enticed by the dealership in the ‘heat-of-the-moment’.
5/ Be prepared to walk away
While this can be annoying, especially if you really want the goods. The reality is if the salesman doesn’t want to negotiate, you need to prepared to walk away (at least on that day) so that you are in control of the relationship and therefore the negotiation.
6/ Get your finance ready before you go
In my experience, being prepared and organising the finance for the goods you wish to purchase prior to entering the dealership can make life easier for you as it means there is one less thing you need to worry about during the negotiation.
Given the situation with COVID-19, the lead times from an application being submitted to being approved and then ultimately settled have increased as lenders deal with the increased volume of enquiries they have received so having your finance ready (or at least in progress) before you go will also ensure you are ready to take ownership of the goods as quickly as possible.
7/ Always be polite
While for many of us the art of negotiation may not be our strongest trait. Learning to remain calm under pressure and friendly when you are faced with this task can be really important. According to some dealers, this can be the difference between them wanting to do business with you or not. So when ringing or approaching a dealer despite the pressure you may be feeling leading up to the negotiation, remember to take a deep breathe, relax, and address them politely as it may mean the difference between them choosing to enter into a negotiation with you or not.
COVID-19 has had a major impact on our economy with some businesses struggling to cope. If you are concerned about the impacts of the current situation on your business and/or its impacts to your businesses current/future lending I’d be happy to have a phone chat with you to help you get your head around things – no cost, no obligation.
Simply follow this link to my calendar to find a time that works for you. We’re all in this together and I’d be happy to help.
Alternatively you can also contact me by texting or calling 0431 177 605 or via our Contact Us page.