You Work Hard for Your Money: Start Buying Stuff Right!

You Work Hard for your Money – Start Buying Stuff Right!

Stuff-itis is an American disease – basically it results from the wrong prioritization of stuff. My wife and I have come to that point in our lives where we “need” much less stuff. It’s a simpler life and we enjoy it more.

Still, there are times when stuff must be purchased. About 18 months ago, we decided to purchase a car to replace my 4-Runner.  I had experienced some back problems and getting in and out of the SUV aggravated it.  Of course, when I must buy stuff, I’m committed to buying it right which always means at the best price. Here are some steps I recommend to be sure you buy stuff at a bargain:

• Always do your homework. I needed a car that was easy to get in and out of and that rode well on long trips – that moved us up to a larger car class. I researched most cars in that class via Consumer Reports, AAA and on-line sources. Next, I rented the car I thought best met my needs for an entire week and took an extended trip in it. The car was great.

• Outline the deal you want. After deciding on the make and model, I completely researched the price. Of course, I decided to purchase a one to two year old car since cars depreciate 60% – 70% in the first four years.  In addition, we were committed to paying cash which is important to getting the best deal.

• Target the best source. After researching the market, it became apparent that purchasing from an individual would yield the best price.  Dealers, used car lots, etc. all had mark-ups I did not want to pay. In addition, paying cash would have great appeal to an individual – show up with cash and you will almost always leave with a deal! This is especially true when other potential buyers must find financing before they can close the deal.

• Negotiate. Everything is negotiable! If you want to succeed in negotiations, find a way for you and the other party to win. I found just the car I wanted and checked it out. It was 12 months old, all the maintenance records in tact and I pulled a vehicle history report from Carfax. If you are shopping for a used car, it’s a good idea to purchase a package from Carfax.com which will allow you to pull reports on multiple cars you might look at over a 30 day period. The car I wanted was not in my immediate market, but I was willing to travel to get the best deal. Here are some key negotiating basics:

-         Find out how this can be a win for both of you. In this case, the other fellow had just opened a new business and he needed cash.

-         Bring cash! Cash has emotional power. In addition, having cash means that the deal can close quickly – that’s usually important to the seller. In fact, most sellers are willing to take less for a quick and certain sell.

-         Be absolutely certain that you are willing to walk away from the deal. When you are willing to walk, you have the power. Once you emotionally decide you cannot walk away, the negotiations are over and most sellers know it.

-         Once you are at a very good price, simply say, “That’s not good enough, I need a lower price to close this deal today.”  And then it is time to take a very important step – shut up! In almost every case, I find the seller will talk themselves into a lower price.

In my case, the seller owed much more on his car then I was willing to pay. Once he gave me his lowest price, I said I could only pay this amount for it – I told him that was all the cash I had for the purchase price, taxes, tags, etc. After a lengthy discussion with his wife, he accepted my offer. When we settled up, he paid the difference on his note.

When you negotiate stay calm, be nice, use a respectful tone of voice and always tell the truth. You win – they win.

Bill Anderson

www.AndersonFinancialCoaching.com