DON'T ASK FOR BEST PRICE! Do this instead! The Homework Guy, Kevin Hunter

Why we give dealers a number instead of asking for their best price. If you're a best price shopper, you got to stop that right away. You contact a dealership and ask the question millions of car buyers ask. What's your best price? The salesman disappears, comes back with a number, and tells you the manager really sharpened his pencil. Oh yeah, wonderful. But how do you know whether that pencil was sharp or whether they just erased some of your money? I'm Kevin Hunter the Homework Guy. Today I'm going to explain why we give dealers a number instead of asking them to invent our deal for us and equally important is where we get that number from because this isn't some kind of pen and teller fool us illusion. It's a real number based on real homework. In today's video I'll walk you through several examples because knowing what to say when the dealer comes back is where this gets interesting. The work starts before you make your counter offer. You need actual prices on actual vehicles. Otherwise, you're picking a number out of thin air and hoping somebody likes it. We start by building a spreadsheet of possible vehicles and dealerships. We can show you illustrations of that. We include links to the listings, stock numbers, equipment, contact information, and the written prices we collect. And we include dealers outside the buyer's immediate area, so don't make the mistake of just shopping at home. One mistake car buyers make is deciding their shopping territory before they know what that restriction will cost them in the end. I only want to shop within 30 miles, some people say. Okay, but what if expanding that search reveals a comparable vehicle for several thousand dollars less and that happens quite often. You don't necessarily have to travel to benefit from that information. First, you just need to know it even exists. Let's put some hypothetical numbers on the screen These are examples to demonstrate the process. You're shopping for a new SUV. You locate three vehicles with comparable equipment and request written out-the-door prices. Dealer A comes back with $43,800. Dealer B comes back with $42,600. Dealer C comes back at $41,900. Now let's keep those numbers on the screen while we go through this. Before you celebrate Dealer C, check the details. Does every quote use your registration address and the applicable sales taxes? Are the vehicles actually available? Does one quote include a rebate that you don't qualify for? It could. Is there a trade allowance or down payment making the price look smaller? An out-the-door quote needs to show the vehicle price, dealer charges, taxes, and registration costs clearly enough that you can compare the offers easily. A cheaper-looking number isn't useful if the dealer left something out. Now you've checked the quotes. Dealer C really is at $41,900. That gives you something concrete to work with. You contact Dealer B. I have a written offer on a comparably equipped vehicle at $41,900 out-the-door. If you can match that total without adding products or changing the terms, please send me your revised quote. Notice how different that is from asking, can you do any better? Don't do that. You've given them a specific assignment. Dealer B agrees and sends the match. Now you've got two dealers willing to sell around that same number. That matters because your purchase no longer depends entirely on one salesperson's willingness to cooperate. Now you go back to Dealer C. Another dealer has matched your $41,900 offer. What would you be willing to do to earn my business? Or you can give them the next number. If you can do $41,400 out the door on the same terms, I'm prepared to move forward. That commitment needs to mean something. Use it when you've checked the vehicle and are actually ready to buy at that number. Dealer C comes back at $41,650. Good. We've made progress. But that counter offer doesn't require you to surrender your number immediately. You can say, thank you, we're getting closer. My offer is 41,400 out the door. Can you get that improved? Then give them room to answer. Some buyers negotiate against themselves because they can't stand 10 seconds of silence. I can do 41,400, well, maybe 41,500. Actually, I suppose 41,600 would be okay, some people say. The salesperson hasn't even objected yet, and you've already raised your own offer twice. Let them respond. Be comfortable with that silence. Now, let's say dealer C holds that $41,650. You take that written offer to dealer B. I now have $41,650 out the door. Can you beat it? Dealer B offers $41,450. Now you've moved from an initial low quote of $41,900 to $41,450 with another dealer still in the conversation. You can return to Dealer C with that information. You can also revisit Dealer A, which started highest. You were initially at $43,800. I now have written offers at $41,450 on a comparable vehicle. If you'd like another opportunity, please send me a competitive revised total. And don't be surprised when that happens. A dealer that started high can sometimes become competitive once the conversation gets specific. Other dealers will decline. That's useful information, too. You're finding out who wants the business enough to move their number. Now let's tackle a favorite dealership response. Why don't we split the difference? Because your offer is $40,900 and the dealer counter is at $41,500, the salesperson says, let's meet in the middle, $41,200. That sounds reasonable, it sounds like they're cooperating, but the midpoint between two numbers isn't automatically the right purchase price. Their counteroffer may already include room for that exact conversation. You can respond. I appreciate the movement. Based on the competing offers I've collected, I can come up from $41,000 out the door. If that works, send me the complete revised quote. You've moved $100. You haven't accepted their midpoint just because they suggested it. Your next move should reflect your alternatives, the vehicle's value to you, and what you're prepared to pay. Here's another example. A dealer sends an offer that includes $1,295 for a protection package and $4.95 for nitrogen-filled tires. You don't want either product. You can say, please remove the protection package and nitrogen charge and send me the revised out-the-door total. They respond, we've already installed those. You can answer, I understand. My offer for the vehicle, including everything already installed, is $39,800 out-the-door. That keeps the negotiation focused on what you'll actually pay Whether they remove a line item or offset it with a larger discount, that's up to them, but just check the final total. And don't subtract the same charge twice when you calculate your offer. Keep your spreadsheet accurate. Now about those out-of-town dealers. Suppose your local dealer offers $48,200 out the door. A dealer several hundred miles away offers a comparable vehicle at $45,000. That's a $2,300 difference before travel or delivery expenses. You show the written offer to your local dealer. You say, I'd prefer to buy here, but I have this comparable vehicle available at $45,900. Can you match it? The local dealer says, but that vehicle is 600 miles away. Your response should be, correct. That's why I'm giving you an opportunity to keep the purchase local. Please send me the closest total you can offer. Now you're negotiating the price of convenience. Suppose travel would cost 500 bucks. The distant vehicle would effectively cost you 46,400. If the local dealer comes down to 4,600, you're deciding whether staying local is worth 200 bucks. That's a much better decision than paying $2,300 extra because you never looked outside your hometown. Some buyers want to say, match this or I'm buying a plane ticket. Negotiation does have similarities to playing cards. You don't have to reveal your maximum budget, how excited you are, or every preference you have. But a travel threat works better when traveling is a real option. If you absolutely won't travel, you can still say, this written offer establishes what another dealer is willing to accept. How close can you get? You can also investigate delivery. You might discover that bringing the vehicle to you is pretty practical. Build an alternative you can actually use. That gives you confidence when a salesperson says, well, go buy that one. Because sometimes buying that one is exactly the right answer for you. Another trap is stopping the moment you see a big discount. The dealer says, we've already taken $7,000 off. Maybe that's an excellent offer. Maybe another dealership is taking $9,000 off a comparable vehicle. The size of the discount alone doesn't settle the question. You can respond, I appreciate the discount. I'm comparing the complete purchase totals. I have another written offer at this moment. Can you beat it? Stay with the numbers that matter to your purchase. Also, don't invent competing offers. Use real quotes with the conditions visible. Don't get lazy on this. If a dealer asks for proof, you must have something useful to send them. And don't confuse persistence with sending the same email 50 times. Watch what happens. Which dealers move? Which hold firm? Which vehicles sell? Does the latest offer still apply? When several competitive dealers stop moving, your alternatives are clear and the best offer meets your requirements. You may be ready to buy. You don't need to spend another week chasing a possible $20. But you also don't need to quit after the first impressive-sounding concession takes place. This takes organization, follow-up, and time. A skilled coach working for us may cover this ground in just a few days. Someone learning this process may need a week or two, depending on the vehicle and the dealers involved. And if you're listening and thinking, Kevin, I understand it, but I can't see myself managing all those calls and quotes. Well, that's why we offer the Homework Guy car buying service. Viewers just like you asked us to offer the service. We build the dealer list, collect and review the offers, and help work through the counter offers on your behalf. Visit thehomeworkguy.com to get started and find that big red button on the home page. Before you give a dealer your number, do enough homework to make that number mean something. Then give them a specific offer. Make them decide whether they want your business or not. I'm Kevin Hunter, The Homework Guy. Thanks for watching.