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    why is it important to “haggle” when negotiating to buy a car?

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    Why Do We Haggle For Cars?

    Few customers enjoy negotiating over the price of a car. Why won't this hated practice go away?

    Why Do We Haggle For Cars?

    Ben Christopher

    Even if you’ve never purchased a car, you know the script. You stroll onto the car lot feigning indifference. The salesman sizes you up and asks what you’re looking for. You point to a red sedan. And then the dance begins.

    While most of our day-to-day transactions revolve around fixed, unambiguous prices, purchasing a car remains a glaring (and for some of us, excruciating) exception. Low-balling and brinkmanship are not skills that the typical American cultivates for daily use, and yet we are all expected to employ them when we make one of our largest lifetime purchases. Haggling over the price of a car is as American as apple pie—except most people actually like apple pie.

    Irritating though it may be, the process of buying a car is also a genuine economic curiosity. Hard bargaining has gone the way of the abacus in most economic spheres. To the extent that we find ourselves bargaining in other settings—after calling to cancel our cable subscription, when requesting add-ons at a hotel, or when purchasing a house—the back-and-forth is usually indirect, either passed through an intermediary or expressed under the guise of “special rates” and discounts.

    But the process of haggling for a car sticks around like a vestigial tail. What makes the car sale unique? And why, in the age of consumer protection regulations and online retail, won’t this economic anachronism go away?

    The answer begins with the predecessor to the car — the horse.

    From Horses to Horsepower

    There is an undeniable cultural component to the way that we transact with one another. Anyone who has spent much time outside North America or Western Europe is likely familiar with the process of shopping untethered from the world of posted prices. For those who are unaccustomed to hard bargaining, haggling can not only feel foreign, but like a violation of well established social norms.

    As the anthropologist Gretchen Herrmann wrote of American consumer culture in 2003, “there is a circumscribed range of culturally tolerated bargaining behavior and those who transgress these boundaries may be viewed as aggressive, self-serving, and even greedy.” We do not like to think of ourselves in a zero-sum contest with our friendly neighborhood grocer.

    Clearly, car culture is unique. The auto retail industry is largely isolated from other commercial enterprises and so its strange folkways are shaped by its own peculiar history. In other words, the horse-trading mentality defines that car market because the horse-trading mentality has always defined it. In fact, according to historian Steven M. Gelber, horse-trading (that is, the literal trading of horses) may be a direct antecedent to auto dealing.

    It all starts with the concept of the “trade-in,” he explains in his book, Horse Trading in the Age of Cars: Men in the Marketplace. “The process of swapping an old ride for a new one and making up the difference in their values with a cash payment was an established practice in horse trading,” he writes. “Car buyers demanded that car sellers continue that tradition by accepting their old vehicles as partial payment for new ones.”

    Even if those new cars came affixed with price tags, the trade-in introduced unavoidable uncertainty into the transaction. As the adage suggests, the horse-traders of old would inspect the teeth of prospect horses in order to estimate its value. Likewise, the 20th century’s car dealer kicks the proverbial tires. Absent real certainty over the value of the total transaction, the price was suddenly up for debate.

    The explosion of the international automobile market in the second half of the 20th century saw the practice exported to countries across the globe. Nowadays, customers the world over get to experience the distinct joys of haggling for a good deal on a car.

    No Time to Haggle

    Economists have a term for the “it is because it was” argument advanced by Gelber: path dependence. A century ago, a horse-dealer made the transition into the burgeoning car industry and brought with him the art of the haggle. The industry has been in that economic and cultural groove ever since.

    Even car customers’ expectations play a role in maintaining this status quo, says Preyas Desai, a professor of business administration at the Fuqua School of Business at Duke University. “This institution has existed for such a long time that customers expect to haggle when they go to a car dealership, even though they might hate it,” he says. “If I go to a dealership and I don’t haggle, then I feel like I’m not doing my job.” Even worse, you might feel like you’re getting screwed.

    Still, though cultural practices often outlast their practical usefulness, it’s hard to imagine such a time-consuming and unpopular practice surviving in the dog-eat-dog car retail industry without any apparent economic justification.

    It certainly hasn’t survived in most other spheres.

    Fixed prices may seem like a permanent fixture of commercial life, but, as a 2015 episode of NPR’s Planet Money explained, the price tag is a relatively new phenomenon. As the consumer economy began to expand at the turn of the 20th century, the costs of bargaining started to add up for businesses. Tracking inventory, paying sales taxes, and ensuring that each of your clerks is a skilled negotiator are significant burdens in a price-negotiable world.

    Source : priceonomics.com

    Should I haggle when buying a new car?

    Answer (1 of 29): Not always. Look for early saturday morning “loss leaders”. Dealerships will often put a few examples of a desirable car on sale for the weekend at a very low price - but it’s first come first serve. The idea is that they get enough foot traffic in AFTER those cars are sold tha...

    Should I haggle when buying a new car?

    29 Answers Harry Roberts

    Answered 1 year ago · Author has 12.5K answers and 8.3M answer views

    Originally Answered: Do you always have to negotiate to get a good deal when buying a car?

    Not always.

    Look for early saturday morning “loss leaders”. Dealerships will often put a few examples of a desirable car on sale for the weekend at a very low price - but it’s first come first serve. The idea is that they get enough foot traffic in AFTER those cars are sold that they still sell other cars.

    My last “new” car - a 2006 Toyota Tundra - was such a car. Every weekened I woke up early, grabbed a newspaper and scanned the ads. I finally saw on for three three such tundras. I called the dealer when they opened at 7 and they said that one of the three was already sold but folks were looki

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    Christopher Morrison

    , works at Retired

    Answered 1 year ago · Author has 273 answers and 37.5K answer views

    Originally Answered: Do you always have to negotiate to get a good deal when buying a car?

    you have to negotiate everything to get a good deal

    39 viewsView upvotes

    Steve Frankel

    , Long term history buff who has read extensively on WW-II

    Answered 1 year ago · Author has 390 answers and 1.5M answer views

    Originally Answered: Do you always have to negotiate to get a good deal when buying a car?

    Sort of, yes. I make sure I have done my research on line as to what the car I want should cost and decide how much I am willing to spend. When I get to the dealer I just say that I have a good idea what the vehicle should cost and just ask that they save us both time by giving me their best deal. Usually, they are perfectly happy to do so if they are comfortable that you aren't going to start chiseling. I find that depending on the model, I can usually buy a car for $500 to $1500 over the dealer cost listed on KBB or equivalent site. $500 is for a common car that isn't hard to find. That “Hot

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    Tony Saberwal

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    Answered 1 year ago · Author has 1.6K answers and 326.8K answer views

    Originally Answered: Do you always have to negotiate to get a good deal when buying a car?

    Absolutely YES.

    Very hard negotiations required indeed.

    23 viewsView upvotes

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    How do you haggle for a new car?

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    How do I haggle in car buying?

    Hamilton Lindley

    , Energetic & Empathetic Leader | Entrepreneur | Baylor BBA JD

    Answered 1 year ago · Author has 395 answers and 158.6K answer views

    When shopping for a new car, I emailed every new car dealer in the state to get them to tell me in writing what the lowest out the door price was for a specific vehicle, make, model, and trim. I received a wide array of price quotes in return.

    I got a $10k discount on a Honda Pilot just an hour and a half away. My local dealer couldn’t come close. If I was in the market for a new car again, that’s what I would do.

    231 viewsView upvotes

    David Borrelli

    , A1-A9, T1-T8, H1-H8, and L1 and L2 Certifications

    Answered 1 year ago · Author has 519 answers and 365.7K answer views

    No. What you should do is prepare yourself by looking into dealer inventory online and decide what you want. Research what a fair price for the car is. Research what taxes and registration fees (and state inspection fees, if applicable) are in your state, and if you are financing, contact your local bank/credit union and/or financial institution which you have other loans with (E.G. mortgage, small business, etc) and get pre-approved for the amount that you want to borrow (or a range if there are a few models you are considering) and go to the dealership with your price in mind. When you speak

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    Gabor Vajay

    , Enjoyed Career in Computer Industry since 1980's

    Answered 11 months ago · Author has 2.6K answers and 1.1M answer views

    Originally Answered: Why is it important to “haggle” when negotiating to buy a car?

    It isn’t.

    What IS important is to have a clear idea what that car is worth to you, and then you can either tell them it is worth (whatever the amount is), or you can tell them some lower amount than that which would kick off all the haggling…

    I once bought a (brand new) car because the dealership was selling some used ones that I liked, except it was black, and I needed white. Sales guy said what if I can get you a brand new white one, same trim for the price of that used, black one we advertised but was sold (yesterday)?

    Source : www.quora.com

    Why is it important to haggle when negotiating to buy a car? – Greedhead.net

    Why is it important to haggle when negotiating to buy a car?

    August 30, 2020By Alexis Flynn Contributing

    Table of Contents

    Why is it important to haggle when negotiating to buy a car?

    But even if the process allows car dealers to truly bilk the occasional customer, there is also reason to believe that haggling actually allows car dealers to offer lower prices on average. Space is limited, so each car occupies real estate that could otherwise be used to sell another vehicle.

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    What are the three 3 aspects of a vehicle purchase that should be negotiated Why is the order important?

    Obviously price is a starting point, but to help you narrow down your choices further, you need to focus on the following three factors: Quality, Cost of Ownership, and Reliability. Let’s take a look at each one, explain why they’re important, and provide you with the best resources for further research.

    Do car Store negotiate on price?

    With us, you know you’re getting the best deal! Our prices are fixed as the cars are priced to be the lowest on the market, we’re pretty confident in that as they’re checked daily. Therefore, there’s no haggling required with us as you won’t need to fight to get the best deal!

    Can you negotiate with a car dealer?

    You can always negotiate upwards, but not down. The sales person’s job is to make a sale, and to make as much profit as possible out of the deal. Your goal is to get the car you want at the most affordable price.

    What features to consider when buying a car?

    Features like the seat belt are incorporated to protect you during a collision. A few other important safety measures added are the airbags, pre-crash system, anti lock braking system, tire pressure monitoring system etc. While looking out to buy a new car all these features do play a role in the decision making stage.

    Is it hard to negotiate a car price?

    Car salespeople have a lot of tricks to get you to pay more for a car and its hard to really know what is a fair price. This makes it tough to negotiate a car price. Nonetheless, it was time for us to upgrade to a new minivan.

    What happens in a negotiation with a buyer?

    Usually in this kind of negotiation, a range of prices is offered of a product buyer is looking to buy and it often results into a price on the higher range. They start the negotiation on a higher price range so that you can only negotiate so far.

    What’s the best way to negotiate a price?

    Win – Win Approach. The second approach is that of Win-Win Negotiations. For example, when you write a price negotiation letter to the supplier, you want to be fair to the supplier and ensure that he makes a reasonable profit but he delivers the products/services with the highest possible quality and on time.

    What are the pros and cons of buying a car from a private seller?

    There are pros and cons to buying a car through a private seller. One of the main disadvantages is that the car won’t have been subjected to the rigorous vehicle health checks used by car dealerships. You can make this work in your favour though.

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    Source : greedhead.net

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