While I must bow to my wife as the true queen of frugality, I’ve learned quite a bit along the way about how to bargain to get the best prices out there on several things. I’ve bargained on medical bills, cars, appliances, furniture, electronics, advertising, job offers, and a ton of other things too. While bargaining doesn’t always equal saving money, it should most of the time. Similarly, if you are bargaining with someone who will have an ongoing relationship with you, it will set a precedent that you expect the best price and save you headache going forward. So what are some of the best ways to get a bargain? Here are a few tried-and-true methods:
- Remember that the first number loses – If you are interesting in buying something, make the person selling give you the price instead of providing them an offer. If you start with a number, they’re of course going to go higher. If you let them offer a number, you can either take it or offer lower. If you give the number first, you lose. Let me explain. When I was getting ready to purchase a car several years ago, I had cash in hand, but my budget was VERY limited. The asking price for the little car I liked was $5,995. They offered it to me at $5,000. I countered with $3,400 and ultimately got it for $3,800. I would have never dreamed I would have gotten the car (worth about $5,000) for that little and so if I’d made a reasonable offer, I would have offered $4,500 and probably paid $4,800. My guess is that forcing them to make me the offer saved me $1,000 or so.
- Be honest – Based on my current job responsibilities, I’m regularly shopping for some pretty expensive items. As such, when I receive a quote that is out of my budget, I’m up-front and honest in telling a vendor that their pricing tells me I can’t use them. I’m also going to tell them up-front that I expect an honest experience because I have no loyalty with a vendor until that vendor proves its worth for my repeat business. Likewise, if I’m expecting the seller of an item to be honest with me about what I’m buying, they better expect me to be equally as honest with them about our dealings.
- Dents = $ Signs – Why is it that people are so hung up on buying something that is perfect? I can’t tell you how much money I’ve saved by limiting my shopping to “scratch and dent” items. Usually the scratch/dent is so obscure you can’t see it or would create one to match it if you were to buy the item and then whack it on a door frame as you moved it in your house. I’m not sure if you know this or not, but a fridge that has a slight scratch means one of two things: 1)you saved money when you bought it or 2) you have owned it more than 2.3 nanoseconds with a toddler in your home.
- Maintain Walkaway Power – There are times when the deal just won’t work. You have a number in mind and so does the other guy. But you’re sticking to your guns (and your budget) and it just doesn’t work. Be willing to walk away. Maybe you miss out on the deal, but maybe the guy calls an hour later and says he’ll come down some more to meet your budget. Happens all the time.
- Use Common Sense Rules – Last year’s model will almost always be cheaper than this year’s. With most things, slightly used is just as good as new but with half the price. Using a coupon on something you were planning to buy anyway is like having extra cash in hand. Avoiding the emotional “hype” of buying something will always help you make a better decision (and pay less money). Be patient with your decision to buy or not to buy. Waiting makes the other guy nervous!
People pay thousands to learn how to negotiate, but I find the rules are pretty much the same wherever you go. When you do this right, you save yourself lots of money and build a reputation as someone who is good to have in your corner. If you do this at work, the finance department may send you cookies. Your boss may promote you, and your co-workers will come to you when they can’t make their budget work. It is a beautiful thing (for a nerd like me). Negotiating is standard fare in many cultures but many of us have somehow missed out on this as a way to save money. While it may be a little strange at first, it will save you money. I don’t know about you, but I can be a little uncomfortable temporarily if I know it will save me some money.
So how about you? How do you negotiate? What works/doesn’t work for you?
When my husband ended up in the hospital overnight last year we ended up with medical expenses (ha-medical insurance-bah-they find a way to bill you!).
I called the health care providers and asked them for their cash rate – negotiated a full payment that day.
Saved a BUNCH of money!
When I told friends or family what I did – they were SHOCKED I ‘negotiated’ health payments!
My point to them was ‘why should I over pay? It’s not like they can take back the care they gave – and I am offering to pay a fair un-inflated amount – in cash! They won’t have to hunt me down to make payments, send out bills or log some account’. I was offering cash.in.full. What was the worse case scenario – maybe they would say no? It isn’t like they could charge more =). Doesn’t hurt to ask!
Now if friends and family find themselves in this position, they want me to call their healthcare provider to negotiate – lol… Some people’s children…
Nice article Barry! People need to not only SAVE wisely but SPEND wisely!
🙂 Both of our children were born with a discount because we paid cash. HA!!
When we had our second son in January we were in the market for a new to us van (that we had been saving for for about 5 years). We had looked at a lot & none were right or the right price. Finally when our little one was about a week old, we found one an hour away. My husband drove up there & test drove it, negotiated and came home without it on a Friday night. On Monday THEY called US and wanted to negotiate some more. I told my husband why I was willing to write a check for & he went back. They were ready to sell it, but for just a bit to much, they finally came down to what we wanted, then while doing the paperwork said there’s this $400 fee (for who knows what) and he said then he had to go without it. They asked him if he was really willing to leave over that much and he said yes. So in the end he wrote out that check for the number we wanted! Sometimes you just have to be willing to walk away! I’m so proud of my hubby for doing that because it’s really out of his element.
🙂 Walking away gives you more power. NEVER act desperate. Great story and thank you so much for sharing!!
This is very informative. Im trying to purchase a house that has multiple bids in on it and Im a terrible negotiator so, this is great to know.
Thanks!
I hope you get the house! 🙂
Although it wasn’t a lot, I was able to save some money on our last fridge that we bought in January. I saw the exact one online that we were looking at in the store for the same price. However, if I bought it online through one of those rewards sites, I would get about 3% back.
I went to the store and asked the salesman if I could have the rebate applied as a discount to my in-store purchase. Since an online purchase wouldn’t add to his sales quota, he did what he could to get us that discount. It worked!
The next time I have to buy something large like that, I’ll try the same tactic if there are no scratch-and-dent ones available.
We are big fans of scratch and dent. 🙂
LOVE this post! Such awesome tips! Thanks so much!
🙂 Barry is a genius.
Awesome tips!
He’s an awesome sort of guy! 🙂