Monday, April 11, 2005

On buying a vehicle

I just spent the morning negotiating with a car dealer on a new, gas guzzling, SUV for my lovely wife Jamie. This should be a happy occasion. One that is not unlike the birth of a child or your favorite team in the playoffs. But thanks to sales people being "sales people" and car dealers stuck in the negotiation stage, it is more exhausting than it should be.

Jamie and I began our new car search about a month ago. We had previously had a Chevy Tahoe which was nice, but lacked some of the more modern features such as a brain sucking dvd player and the all important heated seats. (I have a cold butt!)

We looked at the Consumer Reports info. We tested a few vehicles. We don't call a Tahoe a car, it is a vehicle, just like in the Marines where a gun is called a weapon. After reading and test driving, we ended up with the Toyota Sequoia which is ironic since the Sequoia is a tree and this "vehicle" does have a single piece of wood in it, not even the wood-grain interior is wood. So in this case, Sequoia which is probably a native word for "Big Tree" is changed to "Big Metal and Plastic SUV".

So we showed up with all of our data taken from the net. We had options, MSRP, dealer invoice, blue book trade in, black book, interest rates and brochures. We knew exactly what our price was, what the trade in was, and what we wanted to buy.

When we arrive, our salesperson: Mary Margaret (this turned out to be her first sale and she had only started last week) took our trade-in keys and got to work making us wait. When it was said and done, we spent 2.5 hours to buy a "vehicle". We argued, discussed, ran number, countered, discussed some more, threatened to leave, and finally talked with the new car sales manager (which I thought meant he too was new to the job, but as it turns out, he was in charge of selling new cars).

In the end, we got what we wanted at our target price. Here are a few lessons learned:

  1. Always know your numbers before you enter the store. Know the dealer invoice, the trade in value, any and all specials and what interest rate you will pay.
  2. In knowing your numbers, it is assumed you know the vehicle and package you want to buy. Don't settle for what is on the lot. These guys can get a vehicle from another dealer easily.
  3. Double and triple check their numbers. On today's adventure, the dealer kept changing their numbers and I would have paid $3,000 more if I had not checked.
  4. Before you sign anything, check the numbers again. The final sales agreement supersedes everything else.
  5. Negotiate the new car price before they see your trade-in. Lock down the best you can on the new car, then talk the trade.
  6. Finally, be willing to walk away from a bad deal.

I like to think of buying a new car as training for all the other negotiations I must do in my business. If you can't negotiate with a car dealer, then you shouldn't be in high-stakes business. You will lose your shirt.

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