Category Archives: Negotiating

How We Bought (and Negotiated for) Our Car

Written by in Money Stories, Negotiating
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The following is a post by staff writer Crystal at Budgeting in the Fun Stuff. Her blog covers living expenses, saving for your future, and the fun stuff along the way.

When I asked my husband what personal finance experience sticks out in his mind, he immediately said “buying my car.” That was indeed a memorable deal. I’m also happy to talk about it since I was amazing, lol.

The Beginning

It all started when my husband decided that he needed a new car. Specifically, he wanted a small SUV that could easily handle all of his school supplies as a science teacher and sports officiating equipment at the same time. I physically cringed at the idea of owning an SUV since gas 2 1/2 years ago was reaching $4 a gallon around here!

Thankfully, he saw a Prius in our Kroger’s parking lot and was able to get a great look at its storage room in the back. He was hooked. That’s when I started looking into cost.

The Toyota Prius did not cost as much as I first guessed, but it was only a few thousand cheaper than the small SUV’s that were on our list. I never thought that I would ever need or want to buy any vehicle that cost more than $25,000, but he did need room and we do use his car for the majority of our driving. So I said nothing and continued looking up prices online.

The Purchase

By the time he had a free evening to test drive a Prius for the first time ever, I knew exactly what they were selling for ($26,000-$28,000), the Kelley Blue Book values of the 2008 models (about $26,000), what price I would be shooting for when he decided to buy ($26,500), and the APR we could get from my old credit union (4.5%). I thought I was fully armed.

I was not prepared for the fact that the 2008 Prius had a 200 person waiting list at that point. We were just lucky that a local dealer even had one to test drive. Sadly, it was a fully loaded model that they wanted $32,000 for after all the fees. It was also the ugliest reddish brown color that I had ever seen. It was supremely icky.

Once I figured out that they wouldn’t even negotiate due to high demand, I was ready to go. The salesmen scrambled to come up with something we might be willing to buy. They lucked out and found a 2007 silver Prius in the used car lot next door.

It was awesome. It had the same design, a few extras (like a back-up camera), and was still sparkly and clean despite it’s 30,000 miles. That was the rub. I had not researched used cars. I had no idea what it was really worth and Mr. BFS did not want to leave without that car. Of course, we should have left at that point and come back after doing a little research, but that wouldn’t have made such a good story, would it? :-)

The Negotiation

Yes, we stayed. I offered something laughably low in that high demand environment – $16,000. They countered with $26,000. I rolled my eyes and suggested they actually work with me and offered $18,000. They came down to $24,500. I said I could absolutely go no higher than $21,000 (honestly, I would have gone for $23,000). They made their “final” offer of $21,500. All of that took about 2 hours and we finally were sent to the Finance and Insurance department.

That guy was awful. He tried to sell us on a 7% interest rate and a $2400 extended warranty. The Certified Pre-Owned beauty was already well-warrantied for another 70,000 miles, but I wanted to see if the interest rate had any wiggle room. I asked how low he could go on the APR if we bought the warranty. He knocked it down to 4.1%. I then asked for him to remove the warranty from the works. When he went back to adjust the APR, I explained that I knew that the APR wasn’t actually effected by warranties and that I’d like it to stay at 4.1%.

Needless to say, we didn’t make friends with that guy, but we did leave with a great rate at the time for a used car. :-)

Results

When we finally were able to drive our “new” car home, I was dying to see how good of a deal I really made. When I frantically typed in all the relevant data into Kelley Blue Book, I was happily surprised to see that I paid $500 less than its “going rate” and a quick look at our credit report and a check-in with our credit union showed that our APR was pretty awesome too. I felt like I won the lottery until I realized we just signed away at least $23,000 in car costs and interest rate charges. Yuck.

In the end, we paid off the Prius by mid-2010 and ended up spending $23,400 total. It is still driving just like new and makes 50-52 miles per gallon, so I’m more than satisfied overall. My husband loves it and even said, “Cars are more fun to drive when they are affordable.” He has no idea how many hours I put into that, lol.

Tips for the Future

Here’s what I would keep in mind for my next car purchase:

  • Research the price, options, and APR for new AND used just to keep your options open.
  • Everything is negotiable, even APR and warranty costs. Keep that in mind.
  • Financing options have broadened dramatically. Seek a payday loan instead of other alternatives with their ridiculous interest rates.
  • Don’t let your spouse ever say the words “Oh, I really like that one”. :-)
  • Sometimes luck is better than skill, hahaha.

Have you ever gotten lucky on a big deal? Do you have any car buying experiences to share?

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The Ups and Downs of Selling an iPhone on Craigslist

Written by in Negotiating
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This year for my birthday, I was given my brother’s AT&T upgrade to get an iPhone 4. That excited me for a lot of reasons. I got something new and shiny, the ability to video chat, and a far superior camera. It wasn’t something I would pay for myself, but with the upgrade, it was guilt-free.

Actually, it was also dollar free too.

Actually, I made money on the exchange.

What happened?

Well the iPhone itself was $200 with a $36 upgrade fee. I knew I could sell my current iPhone 3G S for around that much, and a quick search on craigslist showed that the lower limit I would get for it was around $250.

Already, it was a great deal and I was ready to pull the trigger.

I ordered my phone, picked it up, called AT&T to activate it…and the service was down. I spent an hour talking to a customer service representative trying to fix the issue, and when he couldn’t, I asked if he could compensate me for the time and stress, so he offered $25. (had I not asked, I wouldn’t have gotten a penny!) Good but not great. I asked for the $36 upgrade fee reversed and he agreed quickly. For an extra day of waiting, I was rewarded with the equivalent of a free month of service. I wonder what would have happened had I asked for $50..

The Lows

Great, so all I had to do was sell my phone on craiglist. People pay a premium for a jailbroken iPhone, and I agreed to sell it for $300, so I jailbroke it for someone who ended up not being interested (was a weirdo who said that since he already came to me, I should accept $20 less than we agreed on. That bothered me, so I said see you later and went back inside. It wasted 15 seconds of my time and he was left iPhone-less, so who had the bargaining power??). I called one of the other buyers. He came to pick it up, and when I asked if he wanted it jailbroken he said no, so I tried to reverse the change quickly and clear all data.

Unfortunately, it didn’t work the way I expected and instead of clearing the data, it did a hard reset on the phone, meaning I had to do a full install of the latest software, which can’t be jailbroken. Of course, he was no longer interested, and I was sorely disappointed.

I was devastated. I upgraded the phone to the newest version of the software, prayed a little, bargained with the G-man a little, and checked to see how much I could get on craigslist. In my mind, I would take anything over $200.

The Highs

It turns out that I got several offers when I set the price at $250, and in the end, someone came and bought it for $270.

All was better. I only lost $10 from what I wanted to sell it for originally (plus a $20 donation to charity that I promised in my bargaining phase).

My eagerness to get that last $20 cost me about 2 hours of time and a ton of stress. Of course, it all turned out well in the end, as it usually does.

My lesson? Stop trying to squeeze every last penny! Take what you can get, be happy with what you have, and don’t worry about getting the very best price. Just get a really good one.

Readers, have you ever made a stupid mistake you thought ruined everything because you wanted to do too much?

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Silence Can Be A Great Negotiating Tactic

Written by in Negotiating
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As you may have guessed, I am crazy about negotiation stories. I like hearing people who helped themselves, I like knowing that people can get a better price without sacrificing anything and in the end of the day, it comes down to one thing:

I like helping people save money.

So, today I have a perfect example of how to negotiate.

I’m a regular person. I don’t have any secrets, I don’t think I’m naturally charming, and I’m not the kind of person who just runs into luck at every corner. I’m normal, just like you.

On Thursday, I went to sign a lease on a new apartment. Everything was pretty straightforward: $1,500 monthly rent (combined with my roommate), with all utilities included. I would move in August 1st, and I expected it to be a quick process of signing some papers.

We checked out the apartment to make sure there weren’t any surprises. Everything looked the way I wanted. THere were a few minor issues that needed to be taken care of, but there was a week left before the move in date, so I wasn’t worried.

The leasing agent wanted to go through the paperwork with me, which I thought was a waste of time, and for the most part, I just listened as he told me that we shouldn’t break down any walls, leave the place trashed, or start a retail business out of our apartment. Pretty basic.

Then he got to the utilities portion, which showed that all utilities were included – except for electricity. I told him that when I spoke to Stephanie, who showed us the apartment, she said that all utilities were included. Marc, the leasing agent, said that they don’t do that for any of their properties.

Then we had an awkward silence. I sat there, contemplating my next move. I was stuck in a corner. Paying for electricity wouldn’t be the best thing because I thought I knew what I was getting myself into, but I didn’t really have many options.

I stared at the piece of paper a bit longer. It had maybe been 15-20 seconds since either of us had said anything. And apparently that was enough for Marc to break the silence.

“I can’t pay that for you because the bill goes straight to you, but I can give you half off the 2nd month’s rent.”

Um, hell yah! Are you kidding me? $750 back? We know some other people who live in that building and their electricity bills average around $30 per month.

So $750 comes out to $62.50 a month, meaning we’ll actually be saving money on this miscommunication.

I didn’t even ask. I just sat there. And I saved nearly $400. That is pretty damn awesome.

So the next time you’re in a tight spot and aren’t sure where to take the negotiations, try waiting for the other person to make the first move. Just because I was in a tight spot doesn’t mean the other party wanted to sit in awkward silence any more.

Happy bargaining!

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Looking Good While Saving Money

Written by in Negotiating, Saving
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In an earlier post, I talked about always bargaining and that you can always haggle with people who are taking your money. This happens most often for my phone bill, but also happened before renting our apartment as we were able to convince the landlord to reduce the rent. When we moved in, we were able to get very cheap Internet and cable, loaded with extra features that they agreed to add on after we had them drop the price significantly.

Now, I’m starting to put that into practice, and I built up the courage to negotiate with my barber. I just moved into the area and had no loyalty to any barber, but the first one I went to did a great job. Corfu Barber Shop is a tiny little place hidden underground. It’s a real experience: there are sports magazines and some other dirty magazines sitting on the shelf, but it seems like nobody reads them because there’s never a line. John doesn’t speak much English but is a real perfectionist. He does a great job on my neck and I got one of my best haircuts there, so of course, I was going to go back.

Like many barbers in the area, he charges $18, and with tip, it comes out to $20. Usually, I get my hair cut shorter than necessary, and it takes a week to look good. Then 4 weeks later, it’s time to get it cut again.

I’ve been considering negotiating with my barber for a few weeks now, and when it was time to go in, I had a plan. I did some calculations and decided on a course of action. For awhile, I’ve wanted to get my hair cut every month so that it never gets too long and I can avoid that awkward week when people can see my scalp because my hair is too short.

I proposed paying $15, including tip, for each haircut, and in return, offering him two things: First, I agreed to come only to him, which guarantees him my business, something I assumed was very valuable to him, and second, to come in every four weeks instead of every six weeks, giving him consistent business.

Here is the difference in cost:

As you can see, the cost difference comes out to about $13, which over the course of the year is nothing to brag about. However, the real value comes from the fact that I can always look sharp and have a shaved neck. I no longer have to worry about being made fun of when I get a haircut and I also don’t have to put up with long hair and the hassle of “doing” it every morning. Plus, I probably save a few pennies by using less shampoo.

Most importantly, this experience gave me the confidence to haggle the next time, too.

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