5 Negotiation Stages Everyone Should Know - Unhaggle

Posted by | February 20, 2015 | Shopping, Tips | No Comments

5 Negotiation Stages Everyone Should Know

One of the best ways to obtain anything is by negotiating for it. Unfortunately, many people just don’t know how to do it. Yet we all have to rely on the process every now and again – either when negotiating a lower price on a car, asking for a higher salary or trying to low our rent. Knowing how to do it is crucial, if success is one of your goals.

According to Frank L. Acuff, in the book titled How to Negotiate Anything with Anyone Anywhere Around, negotiations exist in multiple stages, and we wholeheartedly agree. For instance, you can’t just walk into a dealership and ask for a lower price on your new car – you have to work up to it. Here are the stages that will get you there:

Stage #1: Fact-Finding

As the old saying goes – “Information is power.” This is especially true in the early stages of the negotiation process. In other words, the more information you can obtain on the subject that your are negotiating and the person you are negotiating with, the more successful you will be.

The first thing you need to do is research your opponent. This may mean learning about their organization, the history of similar negotiations with them and so on. Try to answer as many relevant questions as you can possibly think of. Do they have a solid reputation? Were there any recent management alterations? Is it easy to do business with them? Do you know anyone who has dealt with them in the past? In the case of car dealerships, this research is not as crucial, but it can yield tremendous results. You can find out more about dealer research here.

The next step is to learn everything you can about the subject of your negotiations. If your goal is to lower the price of your car, then you better have a complete understanding of car pricing, because otherwise you are bound to fail. This means taking into account the dealer cost, MSRP, dealer add-ons, incentives and everything else that may play a role in the negotiation process. You can get a complete breakdown of car prices in our free dealer cost report. However, the general rule of thumb when it comes to any form of research is use Google and work your way from there. Overall, the more details you can get, the more reasons you will have to justify your requests.

Stage #2: Development of Negotiation Strategies

Before negotiating anything, you need a strategy. To develop a strategy, you should have a realistic goal and lots of data. In the case of car sales, your goal should be a price that’s three to seven per cent above the dealer cost. You want to make sure that your amount isn’t too unreasonable.

Once you have a clear goal, the next phase is to use your data to come up with logical steps to get to it. For instance, if you want to pay $15,000 for a new car instead of $16,000, then you should come up with good reasons why your proposed amount is more reasonable. One of such reasons could be the fact that, on average, $15,000 is what people pay for the car in question, which is why you should too.

Make sure you understand what motivates the people you are planning to deal with and how you can keep them satisfied. For instance, if it’s a car dealer, then you should know the minimum amount they want to make from this sale and how much they would be willing to budge.

Stage #3: Facing Resistance

Once your negotiation kicks off, get ready be met with resistance – because it’s absolutely inevitable and natural. As such, our main advice is here – don’t get upset by it. People tend to have good reasons to resist various proposals, and it is your task to learn and assuage them. The best way to overcome resistance is by showing your opponent how your proposal can benefit them – what’s in it for them. You can do so by preparing for potential rejections in advance.

Here are some of the most common reasons why resistance may occur, according to Acuff:

  • Logic: Your proposal may seem unprofitable to them.
  • Emotion: They may not like you on a personal level or what you represent.
  • Change: They may feel too comfortable with familiar, predictable situations than the changes you want them to accept, such as a new price.
  • Administrative Constraint: Sometimes the person you are negotiating with is overruled by a budget, policy or boss.

Stage #4: Making Sure Your Strategies Succeed

Next, you need to nail down the real objectives on both sides and come up with mutual benefits. This happens during the actual negotiation process. Don’t just ask what your opponent’s objective is, because what they would say may not be what’s on their mind. You need to figure it out by talking to them. For instance, a salesperson may tell you that a certain feature is useful, but in truth, they may be offering it to you because it would make them more money. You should also have a few alternative proposals in case there is no way that any of your initial offers would work out. Doing so would create additional options for both sides and close the deal sooner.

Stage #5: Agreement

In the final stage, you get to find areas of agreement and ensure understanding. Once that’s done, one of the parties needs to draft the agreement and each side should review it. Before approving it, however, be sure to check with everyone on your side that it’s good to go. In your case, it may be your boss, attorney or spouse. If you are buying a car, then you may want to consult with your family – they may provide you with some feedback!

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About Unhaggle

Unhaggle is Canada's leading automotive pricing resource that helps thousands of consumers find great new car deals. Access a FREE invoice cost report to see all the latest car prices, incentives and rebates and join more than 300,000 happy customers who saved over $100,000,000 and 3,000,000 hours of free time when buying their new cars with Unhaggle!


About Taras Trofimov

Taras is the content lead here at Unhaggle, which means that he spends most of his time either editing someone’s articles or writing his own. So, whether it’s a news piece, feature article or car review – Taras probably had something to do with it. He also runs a personal website, which can be found right here. He would like to one day drive his own Lexus IS, but his all-time favourite is the 1999 Dodge Viper. Don’t ask him why, because he doesn’t know either.

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