How to Negotiate a Better Price

By Dawn Handschuh, Personal Finance Writer Archive

In today's economy, consumers are holding onto their money more tightly than ever before. You can make your money work harder for you by negotiating the very best price. Most Americans aren't accustomed to doing so, but negotiating every transaction, from restaurant tabs to doctors' bills, is the norm in many countries. To stretch your dollars further, learn how to barter like a master.

Most American consumers fail to win a discount on their purchases — simply because they never ask for one. Whether you're shopping at a department store or in a car dealer's showroom, there are specific practices and techniques you can use to lower the sticker price.

Do your homework first

Making a purchase on impulse is never a good idea, and if you haven't researched what you want and what you're wiling to pay for it, you most assuredly won't get the best price.

Shop online to get a good idea of what other retailers want for your item. Sites like consumersearch.com offer free reviews of a wide range of retail products.

If you find a lower price elsewhere, print out the product price online, and bring it with you to a local store to use as a bargaining chip. Or tell the salesperson that the other store offered a lower price. Often, the person you're dealing with will match the other retailer's price, and it'll save you the hassle of driving back to the first store or paying extra shipping charges for an online purchase.

Let's make a deal

To improve the likelihood that a salesman will work with you, you need to cultivate the right attitude. Be flexible and realistic in your expectations.

According to AARP, 10% is a good discount (20% is really good) when shopping for manufactured goods like cars, electronics, or tools. You can try pushing for 20% to 30% off on household goods like furniture, appliances and carpeting. You can score the biggest discounts ⎯ up to 40% ⎯ on services like hotel stays, broadband and lawn care under certain conditions, such as a willingness to pay cash, bundle services or commit to a long-term contract.

(You stand a better chance of gaining a discounted price on discretionary purchases that many consumers pull back on when money is tight; these include cosmetic surgery or dental work, travel, and antiques and collectibles.)

Some home heating oil companies, for example, offer a small discount if you pay in cash instead of with credit. Be creative in coming up with an incentive for sellers to offer you a discount, whether it's in exchange for your bringing them new customers or buying the matching dryer when all you really wanted was the washing machine.

As you negotiate, try to make the salesperson want to help you. A friendly attitude and respectful, personable approach will get you further than a demanding or arrogant attitude.

If the item you wish to buy has some kind of imperfection, point it out, and use it for further leverage. You may get a discount because other shoppers may not be willing to purchase goods with minor damage, though it may be worth it to you.

Get the salesperson invested in the sale

Don't try to rush the transaction. Take your time, and look over a variety of items, even if you already know which one you want. The more time you spend discussing a purchase with a salesperson, the more likely he'll want to close the deal to justify all the time and energy he spent trying to make the sale.

Negotiate one item at a time

Even if you know you want more than one thing, don't inform the salesperson about your plans; rather, negotiate the price on the first item as low as you can. Only after that should you then ask what kind of discount he'd give you if you got the second item too.

If you're buying a new bedroom dresser, see if the salesperson will throw in a table lamp for free to seal the deal. If they think that's what will clinch the sale, they often will throw in extras at no charge.

Silence is golden

Sometimes, a long pause, or simply saying nothing when the salesperson makes a counter-offer, is all you need do to signal that you're not satisfied.

Make sure you're dealing with a decision-maker

There's no use wasting your time with a clerk who has no authority to lower prices. Some stores give lower-level employees some discretion to bend pricing, while at other outlets, it's the store manager who holds sole authority.

Shop where everyone knows your name

Being a familiar face and a longtime customer can make it easier for you to land a deal because retailers value repeat business.

Don't feel pressured

Some salespeople will make you feel like you must decide to buy today or the item you want will be gone. Ignore these tactics.

Timing is everything

In certain industries, such as retail electronics stores or car dealerships, the best time to make a purchase is during the last few days of the month, because sellers need to make room for new inventory or make their quotas to qualify for a bonus.

Timing can also help you if you shop around leisurely. If you're under a deadline to buy something, you'll feel pressured to "settle" for a less-than-ideal price.

The bigger your outlay, the bigger the discount will be

You'll likely get more money knocked off the price of a high-end, all-the-bells-and-whistles-included product than you would for a basic model.

It's not just about price

If the salesperson won't budge on price, consider dickering about accessories, delivery charges, installation or a warranty.

Negotiating prices may feel awkward at first, but the more you practice, the more natural it will feel. More importantly, you stand to save hundreds or thousands of your hard-earned dollars.