Purchasing a used car, like any negotiation, is a “process and not an event” and at the Shapiro Negotiations Institute, our process is based around the Three Ps: Prepare, Probe, and Propose. In a three part series we are going to walk you through how to effectively negotiate the purchase of a used car.

The first step in this process is to prepare. The best source of information in your preparation to purchase is used car is Kelly Blue Book or Edmunds, both of which are available on the internet. These services will tell you the “standard” value for the make and model of car you are purchasing. The key item to remember, however, is that these services will provide you only with the “standard” value. Depending on the condition of the particular used car you are purchasing, it could be worth substantially more, or substantially less, than the value stated by these services. Regardless, in preparing for negotiating the purchase of a used car, Kelly Blue Book or Edmunds is the first place to turn.

Attached is a copy of our Preparation Planner, a tool that you can use to get in a systematic preparation habit to make sure you’re ready when you sit down to negotiate. Click here for a copy of the Master Preperation Planner.

Trust but verify, it sounds good in theory, but how can it really be implemented? At SNI, we typically advise our clients not to make adjustments to their prices when a potential buyer claims that one of their competitors is cheaper until they see hard evidence.

I asked my colleague, Jeff Cochran, for his thoughts, and with a chuckle he said he could tell me a story about how he recently implemented it.

I had a project; I needed to get my driveway paved. Being a negotiator, I knew that I needed to do good preparation. The first step in preparing was to collect estimates so that I would have alternatives. Therefore, I contacted three contractors, provided them with the details of the project, and collected estimates. Of course, all three estimates were different. The most and least expensive estimates were significantly different. The first contractor I called was an acquaintance. He gave me an estimate of $8,500 to do the job. The second estimate came from a contractor who I found from an ad in my local paper. His estimate for the project was $7,500. Lastly, there was a sign on the driveway up the road. When I called the number on the sign to inquire about the cost of my project, I got an estimate of only $6,000. 

Naturally, I was inclined to choose the least expensive contractor. However, his offer seemed too good to be true. I did some research, and sure enough, I found out that cheaper offers like the one I received for $6,000 raise a major concern that the contractor would skimp on materials. Not using the correct amount of asphalt on the driveway could lead to major problems.

I went back to all three contractors and asked for the specifications on the work they would be doing. All three indicated that they would use four and a half inches of blacktop. Since the first contractor at $8,500 was an acquaintance, I went to him to give him right of last refusal. I informed him that one of his competitors was willing to do the job for $6,000, $2,500 least than his estimate.  I was very surprised with his response because he told me that there was no way for him to drop his price without losing money on the job. In turn, I asked him how come his competitor could do the job for $6,000? His response was that the competitor would most likely skimp on materials and do a bad job.

It was the end of the summer and I wanted to get this project done while the weather was still nice. How could I choose the least expensive contractor but know for certain that he was going to do quality work? I had him put in writing a detailed description of the work he was going to be doing and the specs that needed to be met. I then confirmed with him that what he had written is what he planned to deliver. Still, I remained a bit skeptical. Just his word alone didn’t seem like enough. Thinking back on my negotiations skills, I thought trust but verify. I went back to the contractor who would have cost me $8,500 and asked him if for $200 he could have one of his guys supervise the work of the least expensive contractor, guaranteeing that he delivered what he said he was going to deliver.

It was a good thing I did! In the end, the contractor I opted to go with for $6,000 did not have enough asphalt to finish the job, so he suggested that he use three and a half inches of asphalt instead of the correct amount, four and a half inches, to save time and money. It was one of the hottest days of the summer. He told the inspector that he knew that they were both exhausted from a long day’s work and ready to go home. He even added that I probably would never notice the difference of an inch. He was right. How would I have ever found out until I started seeing cracks and needed to dish out an additional $2,000-3,000, if not more, to pay to repair his shortcomings?

Luckily, the inspector who I hired insisted that he do the job correctly, go back to the asphalt plant, and get another load. The $200 I paid for the inspector to be present was well worth it and it potentially saved me thousands. When I first thought about it, I wondered why he cared enough to prolong the project and make the least expensive contractor use the correct amount of asphalt. In the final analysis, it made perfect sense why the inspector would be adamant that the job gets done correctly. He was not going to let a competitor steal potential business by offering to do the “same job” for cheaper when in reality he was shorting clients.

Sometimes you may find yourself in a situation with two or more participants on one team, you’ll notice one partner acting very cordial and empathetic, where the other partner is extremely temperamental and demeaning. The “bad cop” threatens you and probably declares that there is “no reason to continue conversations.” Once you begin to fear that you might lose the deal, the “good cop” swoops in to assure you that all is not lost and if you can just be reasonable, perhaps you can both find a resolution. The object is to coerce you into believing that the “good cop” is on your team, and thereby get you to provide additional information or even make concessions that you would not have otherwise made.

This is yet another tactic to manipulate you. Watch out for the good cop/bad cop scenario as it can lead you down a dangerous path in poor negotiation skills.

• Call their Game – Smile convincingly and say, “This feels a lot like good cop/bad cop.  I do not want to get caught up in games like this.  We have serious issues facing us, and if both of you are needed to make a decision, I suggest you get him back in the room.”

• Ignore the Bad Cop - The Good Cop/Bad Cop tactic only works if you allow the bad cop to get you to lose your focus.  Let the bad cop expel his energy so you can move forward and focus on the business at hand.

• Terminate the Session – Turn to the good cop and tell him that it is obvious that the other person is too upset to carry forward. This should get the good cop to attempt to convince you to stay and you should thereby be able to regain control.

While it may be tempting, going “toe-to-toe” with the bad cop is usually not an effective way to manage this technique.  Even if you are able to quiet down the bad cop, going into attack mode will likely cause you to lose your focus.  The other side will use this loss of focus to get you to reveal information or make concessions that you may not have done if you had been able to maintain a more focused approach.

Create a team on your side. It may consist of co-negotiators, experts in various aspects or good cop-bad cop, information sources, and devil’s advocates with whom you can role-play. Practice before you go to the table.

Assess the other side and the members of their team. Who are their decision makers? Don’t get caught by a higher authority. Strategize. Do you want to control the negotiation or let the other side control the flow? Do you want to lead from strength or react to a lead from the other side? How many face-to-face meetings do you want to have? No answer is right or wrong. That depends on your needs, your goals, the tone and style of the other side, timing, and egos.

Plan you concessions. Where will you give in? Where will you stand firm? How will you make a move so that it gives the least and gains the most? Write out/set forth you proposals in advance – test them, state them, and restate them until you are comfortable.

Don’t stop practicing until you are comfortable. Don’t stop practicing until you are comfortable that your strategy works and flexes when faced with a variety of opposing strategies.

You will never achieve a lofty goal unless you aim for it. Where would you like to come out? What would be ideal/ if you don’t reach it, you will surely never get it. At the very same time, know where your bottom line is. How much will you give up to make the deal? If you don’t face this hard question in advance, you may find yourself repeatedly lowering your expectations as the deal progresses. Be willing to walk at a certain point but decide where that point is before you start negotiating and write it down on the Planner.

Case and point: Jerry McGuire.  If you’ve ever seen the movie, you know that the character of Jerry McGuire sets very high goals in the opening scene. Watch it Here to see what we mean.