How to negotiate anything.

Well, almost anything!

Recently, if you follow the news at all, the “cash for clunkers” stories are pervasive and how this federal program is silver bullet that is going to save the economy. Well, it got me to thinking about the specifics of this program and whether it is a good deal or not. Taking it a little further, I started wondering about the art of the deal, and what prices were actually “negotiable” and what prices were “cut in stone”. I have always been a deal maven, looking for the best items at the best prices. Don’t get me wrong, I have always been a entrepreneur at heart (and for the last fifteen years, in practice) and do not begrudge a business person a fair profit but when I can, I like to know I am getting a fair price. So I thought I would put it down on paper, as I usually do to verify my suspicions.

Let’s look at the CFC program first. According to the government web site (cars.gov) there are some rules and regs you must play by. They are:

        Your vehicle must be less than 25 years old on the trade-in date

        Only purchase or lease of new vehicles qualify

        Generally, trade-in vehicles must get 18 or less MPG (some very large pick-up trucks and cargo vans have different requirements)

        Trade-in vehicles must be registered and insured continuously for the full year preceding the trade-in

        You don't need a voucher, dealers will apply a credit at purchase

        Program runs through Nov 1, 2009 or when the funds are exhausted, whichever comes first.

        The program requires the scrapping of your eligible trade-in vehicle, and that the dealer disclose to you an estimate of the scrap value of your trade-in. The scrap value, however minimal, will be in addition to the rebate, and not in place of the rebate.

And in addition to the promulgated rules from the Department of transportation, I also did a sample survey of some auto dealers participating in the program. I found that most are requiring that the sales price of the new vehicle would be sticker price less the applicable government rebate. Simple enough, right?  So basically, if you are entitled to maximum rebate of $4500.00 on your trade-in, and the sticker price of the new vehicle is 30,000.00 you will be getting a car for $26,500.00. Sounds like a good deal, right. Wrong. At least from my view point. I have purchased quite a few new vehicles and have never, repeat never, walked off a showroom floor with less than a 15% discount off of sticker price. And that is before I even consider asking for a trade in value on my old auto. So using the above example, I am getting the $4500 deal before I even factor in the trade in. Ah, the art of the deal. It excites me.

So I started to think about other areas where I executed negotiation tactics where one would not normally think one could get a discount. Check these out:

        Dentists and doctors. Whether you have insurance or not, sometimes it is in your best interest to discuss payment options with your doctor. They love cash. I once saved several thousand dollars negotiating my fees when I was without insurance and needed work (dental) done.

        Taxes. Everything from state and local, when being audited to property taxes are negotiable if you know the right way to approach it. It’s a little more complicated and you often need some professional help, but it’s easier than you think. It one of those areas where you would think that it is carved in stone but if you look into it, taxes can often be adjusted in your favor. Here is a tip from an old tax auditor. Most cases have to be closed within a certain hourly time limit by the auditor. Negotiating a settlement often can turn a difficult case into an easy case and makes the auditors paper work much simpler. And if there is anything a bureaucrat loves more than simple cases, I haven’t discovered it yet.

        Attorney and Accounting fees. These are easy ones but there are some catches. Lawyers like to bill you the full amount and discount it on the back end. I don’t know why, but as a general rule, they prefer to do their “write offs” at the back end. Accountants (and this is an area where I have a lot of personal experience), are open to negotiating their fees at the start of the engagement. I always had a problem with this when I was in accounting because the partners in the firms where I worked would discount the engagements up front then chastise us worker bees for going ever budget in time spent on an engagement.

        Sporting equipment and other miscellaneous items. I spend a considerable amount of money on hunting and fishing equipment. As a rule, I tend to patronize the smaller mom and pop vendors as opposed to the chain operations. That being said, the big, chain operations often can offer better pricing because they purchase in larger quantities. Often the smaller local shop will match the price if you simply ask for it. I have done this everywhere from the local hardware store to furniture purchases.

So as you can see, I am an extremely frugal fellow. At least that’s what I call it. My wife has more than a few other descriptive adjectives for my lifestyle. But at the end of the day, we are usually both better for more negotiating prowess. She has more to spend and I have a sense of self satisfaction. Remember, the worst that can happen is they will say no. It never hurts to ask.