Its all Psychology

August 2006, Auto Dealer Today - WebXclusive

by Darin B. George - Also by this author

How you talk, present, start and think about the negotiation will determine if the customer will purchase from you, your gross profit and CSI / SSI. The salesperson should always start the negotiation and if the customer has come to your dealership on an advertised special, this style of negotiation will not be used. In some situations, used cars for example, you can present the customer with no discount.

It’s All in how You Do It.

Example of a Price Negotiation

You can use this style for payments and trade-in negotiations

MSRP or Selling price $30,000

Sales Persons Customer Savings $ 300
Ask the customer:

“Ok! Mr. Customer all I have to do is get you to approve this!”

When you present this number (in the sales person’s office, with no management involvement) the customer will React. You want them to react. If the customer over reacts because you’re savings or discount is not enough. Remind them what your position at the dealership is;

Tell them:

“Mr. Customer like I’ve said before, my job at the dealership is assisting people in selecting vehicles, so please let’s see what I can do about the price.”

Ask the customer:

“What number were you thinking you could get this vehicle for?”

When the customer counter offers, the salesperson must React.

Example: Customer offers $27000, you must………… React.

Be creative with your reactions. Remember how they reacted when you gave them your savings. Never write down the first or second number the customer says because it will give them hope. They will think they are close to a deal or you would not have written it down.

Your response to the customer:

“Where did you come up with a number like that?”

You and your manager will need this information to know how to work the negotiation from this point. The customer’s response to this question will get them right to the point and they will tell you where.

You have to work from small increments of money, verbally go down on your number. Do not write your verbal numbers on your worksheet. The reason you are doing this is to get another number from the customer. You must get a third or fourth verbal offer from the customer.

Tell the customer:

“What if I could get you the vehicle for $29,600, (pause) What about $29,550, $29,500…”

When the customer has given you the third or forth verbal offer, write it down, get the customer to initial the number and then get some leverage, sincerity or something money (financial commitment). Never say financial commitment or partial payment to the customer.

The Following 3 examples are how to Ask for Money with out saying deposit, financial commitment, or partial payment.

Sincerity Money:

“Mr. Customer to show the dealership that you are Sincere about getting the vehicle I will need a VISA, MC, Debit card, AMEX or do you have any money with you?”

Leverage Money:

“Mr. Customer I will need some leverage to show the dealership that you are serious about getting this vehicle. I will need a VISA MC, Debit card, AMEX, or some money?”

Something Money:

“Mr. Customer I will need something to show the dealership that you want this vehicle. Do you have VISA, MC, Debit card, AMEX or do you have any money on you?”

Once the customer has given you some type of money (commitment).

Ask the customer:

“Mr. Customer, if we agree on a price / payment / difference. Can we can use your sincerity / leverage / something money towards your deposit?”

At this point in the negotiation you will take your worksheet, customer’s driver’s license, and money to your manager and explain what is happening with this customer. It is very important to get to the point with the manager so that they can assist you in closing the sales. The manager will give you a number that the dealership needs to make the deal. Take it to your customer and show them. They are probably going to react again but just repeat what you know from how you started the negotiation.

Dealership number is $29,147

To get the customer to move up from their number you will have to move down from your number, slowly. Do not go to the customer’s number. Keep focused on your number.

Ask the customer:

“What if I could take off $47 (pause)… how about $100 dollars…etc…?”

If you do not slowly go down on your number the customer will not move up on their price. Try to get the customer to move up twice on their number and when they have, write it down again, get it initialed and then take it to your manager.

At this point in the negotiation, you have to “keep negotiating” until you have agreed on a number. There are only two places you can go from here: We sell a car or we let the customer go home, no deal. This decision is all yours. Also remember that you have two jobs at the dealership: Helping people find a new vehicle and Professional Negotiator.

Payment Negotiating
Same technique as the price negotiation.
Trade Negotiating
Same technique as the price negotiation.

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