Car Buying Articles

Secrets of a Professional Negotiator

A Day in the Life of a Dealmaker


  • A Professional Negotiator at Work

    A Professional Negotiator at Work

    Oren Weintraub honed his negotiating skills as general manager at one of the top Ford dealerships in the country. Then he founded his concierge car-buying service. | August 12, 2013

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The energy is electric in the offices of Authority Auto in Sherman Oaks, California. That's because Authority's president, Oren Weintraub, is doing what he loves: negotiating car deals and saving money for his clients.

"I love the art of negotiating," Weintraub said. "It's kind of like a dance — you have to know what to say and when to say it. You have to be strategic. And above all else you have to know how to create leverage."

The flip side? "When I'm making a deal and I don't get what I want, it drives me crazy," said Weintraub, a former general sales manager at a top Ford dealer in the Los Angeles area. He started his concierge car-buying service after discovering that he would rather work for car buyers than be a dealer trying to maximize their profits. Now, Weintraub gets his fee from his clients, which he says is offset for the client by the low prices at which he can buy cars. He believes that the car broker's practice of getting a commission from the dealer is a conflict of interest.

Sitting in on Car Negotiations

When we visited with Weintraub a few years ago, he was reluctant to allow us into the inner sanctum of Authority Auto. He was worried we would give away all his negotiating secrets. After seeing him work, we'd have to say he's in no danger. He can give all the advice in the world, but he is still a master at the moment-to-moment improvising his job requires.

Scenario #1: Negotiating for a Used Mercedes G500

A client hired Authority Auto to find a used Mercedes G500. New, the SUV was worth nearly $100,000. Weintraub found a 2005 with 29,000 miles on a Mercedes lot in Northern California.

In the following car negotiation, notice how each side is trying to gain a commitment without giving up ground. Also, see how Weintraub lets the salesman know he is looking at several different cars to create a sense of urgency that will help him close the deal.

Salesman: I wanted to touch base with you regarding the G500 you were interested in.
Weintraub: I'm glad you called because we were just about to make a decision on another car. We haven't made a move yet because the prices you guys gave us were higher than my customer wants to spend.
Salesman: Well, what prices would be fair for you? I'm trying to work something out here.
Weintraub: You are listing a 29,000-mile, 2005, certified [car] for $49K and change, correct? Well, my client wanted the price to be closer to $44-$45K. I understand if you guys want to flip this car and make money, but once again, it's not the right car for him based on those prices.
Salesman: So let me ask you this, Oren. I know you're a businessman, and we're both real busy. So if I were to offer you the car at $47,900, would that work?
Weintraub: I would say that if you can do $44K on the car, we would probably have a deal. But I don't want to present it to him unless it's a real offer.
Salesman: OK. I'll see if I can make that deal happen. One more question: Are you in the market for any other vehicles at this time?
Weintraub: What you do right now could lead to more business for you. If we find the people we're dealing with to be professional and tenacious about price, we'll send you more business.
Salesman: I'll call you right back.

Notice also that Weintraub reviewed the specifications on the car: It's a 2005, certified with 29,000 miles on it. It's essential to establish — and then confirm — the details of the car you are buying. Year, make, model, number of miles, condition level and warranty details all affect the value of the car.

After a few more rounds of car negotiating, Weintraub got the price of the Mercedes, which was originally on sale for $49,995, down to $45,500. His client bought the car.

Scenario #2: A Different Approach

Later in the morning, Weintraub took a different approach to negotiating a lower price. While trying to get a lower figure for a Saab that had originally retailed for $42,500 and was on sale for $31,050, he had been given a figure of $30,500 and was told by the general sales manager that was the lowest he could go.

"He said he'd discussed it with his general manager and that was his best price," Weintraub said. "When he said that he had spoken with the GM, it was like a door opened. I knew that if I could get to the GM I could try to make a deal with him. But I didn't want to insult the sales manager by going over his head."

Instead, he waited until the next day, knowing it was the sales manager's day off. Then it would be appropriate to call the general manager directly. When the dealer returned his call, this is how the car negotiation went:

Weintraub: I appreciate the callback. I used to be a GSM [general sales manager] for a major dealership and now I have my own car-buying service. I have a client who is very local to you; he's interested in buying your 2009 9-5. Normally I wouldn't speak with you since you're the GM, but I've been dealing with Steve who isn't here today. The price that he offered, $30,500, is more than my client can spend and I was hoping that I could talk with you to find a place you're willing to go that would meet our customer's needs. We're looking at another car, an '08 model with 100 miles on it, that another dealer is offering for $27-$28K. I know your car is newer, but it's a demo so it has some miles on it, and we were hoping you could bring the price down so we could make a deal. My customer is ready to buy a car today for $29K even.(10 seconds of silence.)
General Manager: Yeah, we can do $29K.
Weintraub: You'll do $29K? Beautiful. Please fax that in writing.

After hanging up the phone, Weintraub stood up. "I'm pumped," he said. "Sometimes I get really jazzed when I get a big win like that."

In this case, Weintraub was respectful and yet specific and well-informed. He gave the general manager a reason that he was asking for a larger discount: The car is a "demo" (a demonstration model) and it has additional miles on it for a new car. And finally, he lets the general manager know that they have another car they could buy if they don't get this one. Once the offer is on the table, he stops talking and lets the silence grow.

The Key to Negotiating

Over lunch, Weintraub said, "When I'm negotiating, I always think about where I want to end up." In other words, you have to know that while the seller starts at a high asking price, you have to start with a low opening offer. When each party takes small steps, the gap between them is closed and eventually they have an agreement.

What will convince the seller to come down on his asking price? Leverage.

"I see leverage as an angle people use to exercise power in deal-making situations," Weintraub explained. An example of leverage in the first dialogue was when the salesman asked Weintraub if he was looking for any other vehicles to buy. Instead of just saying yes, Weintraub replied, "What you do right now could lead to more business for you." He made the current deal into an audition for future business.

In the second dialogue, Weintraub didn't just say he didn't want to pay $30,500 for the car; he said they had found a similar car for $28,000. His offer for $29,000, for a newer car, was slightly above the competing car — a sale for the dealer and a savings for the buyer.

Working Toward "Yes"

There is a popular expression in negotiating: "The first person who speaks loses." But Weintraub doesn't necessarily adhere to that philosophy. Instead, he might simply start the car negotiation by asking the salesman, "What do you guys price these cars at right now?"

While this might seem like a vague way to begin, it means that they might throw out a lower starting price than you expected. Once they announce their position, you can know where to position your opening offer.

Above all else, though, you have to be firm. "Early on, the person you are dealing with forms a perception of you, and this could keep you from getting the deal you want. It's all about perception." He added, "Good negotiators are good at overcoming the dealer's leverage and holding firm to what they are willing to spend."

Negotiating sometimes means countering the leverage others try to turn against you. "When I send a client to the dealership for a test-drive, I tell them to be aloof about the car even if they really love it," Weintraub said.

Finally, Weintraub advises people not to negotiate with salespeople who might intimidate or pressure them. "There are other salespeople and there are other dealerships," he said. "I do that every day; find someone I feel I can work with."

Stick to Your Own Style

It's important to play to your own strengths when negotiating any deal. Whether you are relaxed and personable, like Weintraub, or "in your face" like some closers at dealerships, car negotiations are most successful when you feel you are in the right.

"When you're fighting for the right thing, you gain a lot of power," Weintraub said. "And if you can make a person who has what you want feel good about giving it to you — that's the art."

Comments

  • Really? The customer never drove the car before and your calling salesman up and they are actually responding to this nonsence running back to the sales desk working imaginary deals? Any professional salesman that has a book of business, laughs thanks you and hangs up when you call.

  • lazlo_toth lazlo_toth Posts:

    Seriously, all over the phone. Never at the dealership, no test drive , no commitment. My sales force knows not to bring anything like that to my desk.

  • to:drivethegreat, I'm surprised to see your comment when it's clearly written that both sales were made. any "good salesman", that recognizes an opportunity for a sale, never takes a shortcut and hangs up on a potential sale. if the salesman took your advise, he and the dealer would have missed a sale and more importantly missed an opportunity for creating a long term relationship with customer, their family, colleges and friends.

  • boatbroker1 boatbroker1 Posts:

    In the 35' to 50' boat biz and structure deals this way all the time. Verbal negotiations to arrive at a sale price followed by a written offer signed by both parties accompanied by a buyers deposit held in escrow. If the boat passes individual and professional scrutiny the deal is done. If not, the offer can be adjusted or rescinded. Saves everyone's time, money, and energy by keeping the horse in front of the cart. Why view a boat the owner won't sell at the price you're willing to pay?

  • l2louie l2louie Posts:

    So, you can't negotiate effectively without lying? It is perfectly acceptable to tell someone an untruth to accomplish your ends? No thanks. I would much rather pay a bit more than the absolute minimum than pay with my soul.

  • luckydog01 luckydog01 Posts:

    I recently bought a certified used BMW from a dealer on the other side of the state using some of the techniques described in the article. I never met the salesperson until she delivered the car to my door. The car was as advertised and I got a good deal. I never set foot in the dealership or drove the car. I thought I must be crazy to do it this way right up to the end, but I must say it worked for me. Of course, I was familiar with BMWs and did my homework on the car, the dealer, etc.

  • Dealers commenting - shows what you know. I bought my certified car sight unseen and never regretted it for a moment. Sounds like you are leaving a lot of deals on the table. The key word here it is certified.

  • chikoo chikoo Posts:

    I am sure a mid to high end salesman can differentiate a serious offer from that of a joker calling in. Now I am sure this might not work in low end cars where the key is to reel the customer in.

  • kittymama kittymama Posts:

    Not impressed! I actually hired them for the full service based on Edmund's recommendation. Came out extremely unsatisfied. They charged me $200 upfront for the retainer's fee and quoted me an OTD price almost 1500 higher for a Camry LE base model. I shopped around myself and got it close to 1500 less and mine came with Alloy wheel package. When they quoted me, they acted as if I'm getting a good deal (just like a car salesman). Makes me wonder are they really working for the dealers or the consumers. You can do the job yourself, as a first time new car buyer this is what I have learned. Give yourself about a month to do research. Then do price comparison online (there are many websites that will allow you to get haggle free price quotes). Have everything in writing (print out certified price). Then call the dealers in area and ask if they can beat it (have it in writing). Then call up other dealers to see if you can get them to beat it. Go to test drive the car but don't buy the first day. You may have to make multiple trips to same dealers in your area. Finally fix on a price and buy it. Remember invoice price isn't the dealer's true cost. Note: This is only valid for new cars (my experience). The bargaining power depends on the market trend so do research well. Finally, know your worth. You shouldn't walk around in a Chanel purse and then expect them to lower the price by $50 when clearly you can afford more (also, don't run credit check before settling on a price). I hope it helps. Happy Car Shopping!!

  • kittymama kittymama Posts:

    PS: For those who said that one must test drive the car before shipping, are very wrong. Now a days a car negotiation can be done via online or over the telephone and then get it shipped. I had the opportunity to do that but I opted for test driving it first and buying from a dealer near by.

  • hdauto hdauto Posts:

    I like the article. I use to be the salesperson so I understand the comments below but if you are working business to business this is how selling works. Sale first, then demo. It's a trade off. Lower margins for higher volume. There's nothing wrong with holding your ground and letting some deal go down the road. It just goes back to what the article said. What's your style and stick with it.

  • ctmlhr ctmlhr Posts:

    Weintraub is EXACTLY the way new customers negotiate. I bought my first SAAB over the phone and fax in 1987 -- no sight, no test drive, just agreed on a price and it was delivered to my garage... and all my friends do the same ever since because everyone is so BUSY! My boss and I recently went out to buy a car for him -- his time is worth at very least $2500 an hour to the company... When sales types kept him sitting while they thought they were stewing the deal... he walked out and never returned. The guy that got the deal understood NOT to waste this customer's time. Really...there was a time when a car purchase was as careful an act as buying a house, but today with online checks of VIN numbers etc. People who make deals every day that cost their companies millions...do their jobs in less time than it takes to buy a car the old fashioned way... The car business is changing and Weintraub is on the cutting edge.

  • mschuyler mschuyler Posts:

    Oh, come on. test drives are useless and just provide face time with the sales guy. If you know what you want and have done your homework you don't need a test drive. If that's your criteria to make a deal you just lost. My second last deals were entirely negotiated on the Internet prior to my stepping foot on the lot, and an extremely good deals. I'd never go back to lot deals. Don't waste my time and I won't waste yours.

  • schmuey1 schmuey1 Posts:

    First of all, I, as a customer, go dressed as poorly as I can. It is suprising how few salespersons approach me. Usually they are hesitant to even LET me take a test drive. If I like the car, AND the way the dealership treated me, I go home, change clothes, and come back. I sit down, and give the salesperson ONE chance to give me his best price. I don't EVEN think of buying at a dealership when they do the sales mgr-gm stuff on a price. I don't give my registration, but I want to see their license to make an appropriate report if I feel the dealership is taking advantage of people.Also get the name of the F & I person to verify their info. If they give me a price thats agreeable on the FIRST visit, then I show them my trade.If the price suddenly changes, I leave. I forgot to tell you, my car keys NEVER leave my possesion. I go on the test ride with them. If I finally agree, ON THE ONE PRICE QUOTED, I will talk with the F & I guy. No kickbacks from lenders, no 200% markup on extras(warranties, etc). And I want proof who they are sending the deal to. After all of this, I leave. I come back in a day and pay cash. I don't mind a dealer making a few bucks, but dealer hold back, dealer cash, kickbacks from lenders, are MORE than enough. There are always MORE than one dealer in the area. ALWAYS DRESS LIKE YOU DON"T HAVE A PENNY TO YOUR NAME. SEE HOW THEY TREAT YOU. This has always worked for me and I pick up me 2008 Jag tomorrow, jeans with holes in and all.

  • deepond9 deepond9 Posts:

    This is a joke right!? I don't know about anyone else here, but the buyer must be in front of me to even consider an offer. I wonder what this guy charges for his service.

  • bb71 bb71 Posts:

    For all the salesmen who have responded to this article and scoffed: the reason that this guy is in business is because consumers don't want to deal with a salesman's BS. I understand the irony in that Weintraub is a salesman himself, but if salespeople didn't have such a well-deserved reputation of screwing people over, Weintraub would not be in business. So...if you would have laughed and hung up the phone on him (or me, for that matter), he (or I) will just call somebody else who will make a deal. It's as simple as that.

  • oubobcat oubobcat Posts:

    Of course you can work a deal over the phone. It's merely a conversation with someone who isn't in the same room. The last car I purchased was handled primarily through email. Naturally the deal wasn't final until I'd seen the car and had a satisfactory test drive, but the negotiation wasn't face-to-face.

  • hunt99 hunt99 Posts:

    Driver and lazlo's comments below are excellent examples of how traditional auto sales techniques are eliminating sales for their employer's. On all of my transactions I know exactly what I want to buy and exactly how much I am willing to spend before ever contacting a dealership. When clowns like these blow me off I simply move on to another dealership that treats me seriously and I make the purchase there.

  • bl4444 bl4444 Posts:

    lazlo_toth - "Seriously, all over the phone. Never at the dealership, no test drive , no commitment. My sales force knows not to bring anything like that to my desk." Seriously? In the age of the internet, you won't deal over the phone? I'm a current buyer shopping in three states from my computer. I can't drive to look at every car I'm interested in and hope the dealer will work with me. Anyone who isn't willing to deal with me over the phone and finalize in person won't get a second call from me. Conversely, you're looking at the opportunity to open your potential customer base up by hundreds of thousands of people, and instead you scoff and say "business as usual, please." I'm the future of your industry. You're a dinosaur and you're going to get left behind.

  • I also offer a car buying service in Boca Raton, FL. I have bought most of the cars for my customers through telephone negotiations. The key is that I am not driving to each dealership and spending an afternoon, rather I spend 10 minutes or less on the phone and the best deal gets the sale. Sure, there are dealers who refuse to give a price over the phone, but they are the losers. And if a seller doesn't honor the price, I never return to him, and buy the car elsewhere. Negotiation is an art, not a science. Oren did well.

  • brian125 brian125 Posts:

    great stuff i have been buying cras on line since the internet came out. my approach is very similiar to how a professional servicel buys for clients.... i should have went into this kind of buiness......... brian 125

  • brian125 brian125 Posts:

    when i buy a new vehicle i always get my target price of below invoice or at invoice, and only when supply and demand are not in my favor.. honda loves to stick together when they make a hot new vehicle like the 2013 accord.. i try to send out 20 to 30 emails or phone calls to the dealers that i'm buying. I always buy the last 2 days of the month or at quarters end. 1- quick simply phone call or emails to internet mngrs.. letting them know that for this price i'm buying today never fails. within 1 hour or so i have a sign buyers order with the price and vehicle requested supply and demand plays a big part of pricing but i find if your a good negioater the bigger dealerships who sell cars always meet your price or come close. i will buy with in a 100 mile radius of the nyc area. today it seems like dealers are really banging people out on these doc fees . my thoughts on that are if doc fees are $249 to $300 like in the new york area thats how much lower my below invoice price goes. plain and simple. the internet has changed the game of car buying and i'm loving it.

  • dariusbot dariusbot Posts:

    I am the Internet Sales Specialist for my VW Dealership and I try to spend a lot of my time finding out what people want. and I mean A LOT OF TIME. I cant tell you how much less stress there is on the consumer and the salesperson when the buyer is prepared. I have been in the car business for over two years and I can count on one hand the number of people who had a negative experience with me. Don't waste your time calling and visiting dealership after dealership asking them to give you their "Best Price". Be prepared! When you call, or visit, or email them offer them YOUR BEST PRICE, and see if they will take it or leave it. Most people nowadays are doing a lot of research when it comes to car shopping. Know the invoice price of the vehicle you want, and know the MSRP of the vehicle you want, then, MAKE AN OFFER! what's the worst that could happen, they say no? then you make someone else the offer. If they say yes, then GREAT! you had the least amount of price haggeling and negotiating possible by making the first offer! if none of the dealerships accept your offer, then it's one of two things. 1. Your offer is to low for the vehicle you want 2. The vehicle is out of your price range This is the advice I will give all of my friends when they are looking for a car. These are the things you need to know before you even think about contacting a dealership. 1. What vehicle and trim level you want. 2. What is your trade in worth? (NADA.com is an excellent resource to use when looking for a value for your vehicle because THAT IS WHAT DEALERSHIPS USE. it's very easy to use and very straightforward about the value of your vehicle) 3. What is the invoice cost of the vehicle? (this is also pretty easy to find, I recommend CarsDirect.com. It will tell you the MSRP, Dealer Invoice, and even suggest a price that you should pay) 4. Be prepared to pay OVER INVOICE. (why would the dealership sell the vehicle at a loss) 5. Know what you want to accomplish, and tell the salesman that! (Don't beat around the bush, if you have done your research, and know what you expect to pay for the vehicle, be up front with the salesman and they SHOULD be up front with you.) 6. This is the most important thing. Ask if the sales person works on commission or on salary! (I work at a dealership that pays a salary to its employees, with a Volume Bonus for vehicles. So I am able to stand by the Consumer when it comes to price, and fight on their side, because the selling price is irrelevent to me. I want them to get a vehicle, and I will do everything I can to get them to the price they want to pay.)

  • jim1935 jim1935 Posts:

    If the client is looking for a car I am sure that he has had a test drive of models that he likes and has given the negotiator them. And if the negotiator knows that the dealer has that specific car in stock he has visited the dealership - right? How else did he get the information about number of miles - whether or not it was a demo -hmmm?

  • carlineneg carlineneg Posts:

    I am in complete agreement with autoadvocate! The dealers made the deal, made the money and didn't let it go to another dealer. I understand dealers don't like having their leverage reduced, it reduces gross. However, unless you are the only dealer in 100 miles another dealer will do the deal. You have to take the high gross with the low unless you sell every car on your lot in less than 30 days and even if you do, you are not selling as many cares as you could. If you think you are, you need more people or a larger store.

  • shatner shatner Posts:

    "Dealers commenting - shows what you know. I bought my certified car sight unseen and never regretted it for a moment. Sounds like you are leaving a lot of deals on the table. The key word here it is certified." _________ Well certified does not mean all that much really. In fat not all new cars are the same. I test drove some new Mustangs recently, the first one had huge play in the gas pedal that did nothing, the 2nd one just had a weird feeling to it when driven and a vibration in the steering column. Make sure you drive a car before you actually buy it.

  • shatner shatner Posts:

    Oh, come on. test drives are useless and just provide face time with the sales guy. If you know what you want and have done your homework you don't need a test drive. If that's your criteria to make a deal you just lost. My second last deals were entirely negotiated on the Internet prior to my stepping foot on the lot, and an extremely good deals. I'd never go back to lot deals. Don't waste my time and I won't waste yours. ____________ That is crazy, I have driven some well reviewed cars and hated them for some reason or another. Waste your time? LOL how many hours will you spend in a car? Thousands!

  • mkmalls40 mkmalls40 Posts:

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  • ripper44_ ripper44_ Posts:

    Its funny seeing these car salesmen trashing this article. I guess they knows pros like Oren will cost them a few bucks by not letting them take advantage of as many customers.

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