After buying five cars, and selling three of them, I know that the whole process of purchasing or selling a car can be a bit daunting; from greedy salesmen to lack of knowledge – there are a raft of reasons to feel overwhelmed and helpless. You see, it’s all down to negotiation, and there’s a golden rule that can help you.
Whenever I’ve sold my car, I always do my homework and check out the competition. I’ll get four or five different quotes, so that I can negotiate the price with the buyer. If I don’t achieve the price I want, I’ll be annoyed, however, I know that I won’t regret my decision to sell, based on a quick impulse, later. I believe it’s all about being happy with your decision.
With new car sales on the rise for the twelfth consecutive month, the UK is swerving the declining European market trend. New registrations have risen over the past month, gaining a 7.9% increase compared to February 2012 figures. It is then surprising to learn that the majority of car purchasers are private buyers – and I reckon this could all be down to the power of consumer negotiation.
So, that golden rule?
It’s called your BATNA: Best Alternative To Negotiated Agreement. This is your ‘insurance’ where you work out your other options if you don’t get the car for the right price (or sell it for the right price).
Picture the scenario. I’m selling my 2001 Ford Focus. I want around £1000 for the car – I’ve advertised it at £1200 – and a potential buyer ‘Dave’ is on his way over.
The stronger my BATNA, the more power I will have if an acceptable agreement is not made; The BATNA is my ‘ace card’ and to get the best out of the selling negotiation, I need to think of the alternative options that I have, should the negotiation not go in my favour. This could be a number of things. It could be the fact that I have already got an offer of £900 from a local dealer, or it could be that I have another potential buyer coming to view the car this evening.
Now, when ‘Dave’ arrives I have the leverage to negotiate the price having assessed my BATNA. If ‘Dave’ offers me £850 for the car, I know that I have two alternative options to consider and I won’t accept. ‘Dave’ offers me £950 – higher than my dealer offer, yet I still have that evening viewing. I now have to assess my BATNA again – I can either accept or tell him about the evening viewer.
Dave can either raise his price or stick to his £950 offer. Either way, I have to weigh up my alternative options. I decide to accept his bid as it is higher than the dealers’ amount, and there is always the risk of getting a lower price from the evening viewer.
Your BATNA will ensure that you leave a negotiation confident that you got the best out of the situation. If you have to walk away – walk away. Autotrader provides buying and selling advice on its website for those who want to know more. And once you have determined your BATNA, Used Car Expert has some great tips and advice on how to handle to overall selling experience
Can you think of how negotiation helps in a purchase agreement? Are there any downsides to assessing your BATNA?
I’d be interested to hear your thoughts
– JR –