When you're ready to make the all-important opening offer, give good reasons for the figure you are about to throw out.
For more information on how to choose your opening price, click here for our Web Extra.
Next give that figure, a firm number. And then shut up. You want that pregnant pause, that uncomfortable quiet. Do not fill it. Your goal is for the seller to be the one to squirm and shatter the silence by accepting your offer or making an attractive counter offer.
Too many customers make their offer and then -- worried they are being impolite -- sort of dribble on and weaken their own words.
Here's how Reed worded his offer at the second dealership: "Based on what we've seen on other car lots and our budget, and the fact that it's a little higher miles than we had hoped, we'd be prepared to offer you $20,500."
Thoughtful reasons for why the offer isn't higher, the offer itself and then silence.
"If you say it and then you're absolutely still after that, it really puts a certain amount of pressure on them to respond," Reed explained.
In our case, a manager came out a couple minutes later and made a counter offer of $22,865.
"Which is really close to wholesale book," he said. He, too, was giving reasons for the figure he named.
Never accept the dealership's first counter offer, much as you might like to end the negotiation because you are outside your comfort zone. Instead, show you're tough by making your counter offer a smaller increment than theirs.
The idea is to demonstrate that your resolve is firmer than theirs and you are sticking to your guns. In our case, the dealership came down more than a thousand dollars. So Reed went up by just $500, putting the price on the table at $21,000.
Once again, reasons -- and some encouragement: "We're just trying to work within a budget. So we'd be happy to come up to $21,000," Reed told the manager. "If you can do that, we can do it right away."
Very often dealerships claim that they will lose money on a vehicle at the price you are offering. Both dealerships we visited said things to this effect and sometimes it is true. Other times it's more of a negotiating line.
Keep in mind, when dealers talk about what they paid for a vehicle, they may be including other factors besides what they purchased the vehicle for.
For example, the van we were buying was used but certified. That means the dealership spent some money sprucing it up to meet Honda's certified vehicle requirements. Dealerships often assign a dollar value to those repairs, but they are performed by in-house mechanics who are on the clock anyway.
I'm not saying the repairs don't have value, just that there is probably some wiggle room in the accounting that you may be able to turn to your benefit.
That's why it's important for you to go into the dealership with a maximum price in mind that you can afford to pay for the vehicle in question. If the dealership says it is losing money at the price you have offered, but offering more would bust your own budget, then walk away.
Our undercover adventure took place on Sept. 28, just two days before the end of the month. Honestly, that is just when it worked out for us to go, but we were reminded that it can be a good strategy when the used car director at the second dealership said the following: "That's a unit for us right here at the end of the month."