The Art of Bargaining

You see an item in a department store. The price tag says $100. That's what you'll have to pay. Right?

Not necessarily. What if it has a scratch on it or is shop-worn, or last-year's model? "Speak with the manager, and pointing to the defect say, "I'd be willing to take this if I could get 15% off. Is that fair?"

But what if the product is the current model and is in perfect shape. Are you stuck with having to pay the $100? Ask the cashier, "Is a coupon being offered that could be applied to this purchase?" Often there is. Even if you don't have it, she may have some of those coupons available.

No product defect? No coupon? I might ask, "Do you know if this just came off sale or is going on sale?' Often, they'll give you the sale price now. Or worst case, you can have them hold it for you until it goes on sale whereupon they'll ship it to you.

All those bargaining possibilities are at a supposedly fixed-price department store. Your bargaining opportunities multiply elsewhere.

For example, let's say want to buy something from an independently owned store. If you don't like its price, ask to speak with the manager and say something like, "I really like this but I can only pay (offer 50 to 75% of the sticker price). Can you do that?" If no, say thank you and start to walk out. The manager may call you back and say yes or counteroffer. If you've made it back out onto the street without being called back, you can come back in and say, "Well I suppose I could pay (insert 85% or 90% of the sticker price.)" Of course, this strategy won't always work but it often will. And you have nothing to lose by trying. At minimum, you'll know that if you ended up paying full price, you could not have gotten that store to sell it to you for less. Of course, so many products are available less expensively if bought on the Internet, both because it's easy to price shop and because there's often no sales tax.

How about a really big purchase like a car? Get the TRUE current dealer cost (NOT the widely available invoice price) from Consumer Reports. The term for the true dealer cost is "dead cost." Call five dealerships (especially those in low-rent districts) and ask to speak with the new car sales manager. Do not agree to speak with anyone else. Tell that manager the precise car including color and options you want and ask if they have it in stock or are willing to get it for 3% over dead cost. If one dealer says no, politely thank them and call the next dealer. If all five say no, call them again offering 5% over dead cost. If they all say no, offer 8%. You'll end up buying your car for less money than do 99% of customers. Once you and the manager agree on how much you'll pay for the car, don't get hit up for other costs. You should pay only the agreed-on price plus tax and license; that's it. (No dealer prep, advertising, no nothing.) Also, say no to the dealer getting you the financing or insurance--that's a huge profit center for dealers. Get your financing from the best-rate lender you can find on bankrate.com. Better yet, don't buy more car than you can afford to pay for in cash. That's key to keeping your costs down without significantly degrading your lifestyle. Comparison-shop for car insurance on esurance.com.

Of course, in all bargaining, you shouldn't be a pig. Remember that the seller is entitled to make a reasonable profit--sellers have to live too. But there's no reason you shouldn't try to get a good deal. That's standard practice in business and there's no reason it shouldn't be for you.