On Friday, I bought a 2004 Nissan Maxima off a dealer lot. It’s a nice looking car that filled my requirements – price, space, perceived reliability and safety. While this is all fine and good, it doesn’t make for an interesting blog. How the deal was made makes for a much more interesting story.
On Friday afternoon, I decided to move to the next step in the buying process. I had done the research and test-drove the vehicles I wanted. It was time to float some offers.
I had the search lowered to five vehicles and called in the order of personal preference. I asked the first dealer (Bill*) to give me a cash price. He told me that he wasn’t budging an inch on price, saying he had already reduced it and was getting ready to retire in 3 weeks. He also sold another one just like it that day. He was confident that he would get his price. If I didn’t like it, tough. So much for the first choice.
An artist's depiction of me car shopping.
The second choice was the same make and model, with fewer options and higher kms. When I called the dealership, the salesman, Jake, turned out to be somebody I knew from years ago. After some small talk, I gave him a cash offer for the car. He told me he would run it past his manager and would call back.
The third call I made was to a dealer selling a model a year older than the previous two. I made a cash offer, and like with the second car, Tom told me he would run it by his boss.
The Response
Jake called me back saying his boss accepted the offer but was adding a $250 inspection fee.   This was within my wiggle room so we made the deal. About 20 minutes later, Tom called back and told me that his boss accepted my offer. I told him that he was 20 minutes late, and thanked him for his assistance. It turns out that I didn’t harm them because he had another buyer interested in the car.
Lessons
So what did I learn? Here’s what I took from the experience:
- I am an amateur car buyer and I was dealing with professional sales people. If you call our interactions a battle, I’ll admit I was outgunned. I tried to mitigate this disadvantage by dealing with as many dealers as was practical.
- I picked Friday afternoon to try to assert some pressure on the salesmen. In Spin Selling, Neil Rackham explains how this pressure can push people to a buying decision. I thought that the prospect of a cash sale on Friday afternoon could induce a better deal for me. It’s hard to tell if it made a difference.
- For all the analysis I did on this purchase, it’s impossible to deny the psychological aspect in coming to a decision. There were several things that got me into buying mode. The first was sitting in the Maxima earlier in the week. When Tony** was trying to scare me into buying a car with 130 air bags, I remember sitting inside the car and thinking, “this is really nice.” The second came when Bill told me he wouldn’t budge on price and he just sold a car just like it. This jolted me to get moving on some offers on cars I like. Bill and Tony didn’t get the sale, but they pushed me down the line to a purchase. In fact, I might have helped Tom sell his car by instilling some urgency in his alternate buyer.
In our professional practice, we tend to use our research, skills and experience to help our clients come to a rational business decision, be it buying or otherwise. All of that can go out the window when a buyer’s lizard brain kicks in with fear, lust or greed. If you think as your higher brain functions as an advisor, the limbic system, or lizard brain is definitely the boss. The boss is the one who ultimately signs the cheque.
*Like last week, names have been changed.
**See Part 1.