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With the COVID-19 pandemic taking a serious bite out of the economy – and from many people’s bank accounts – it’s no surprise that we’re holding our wallets just a bit closer these days.

And when it’s time to make a purchase, consumers are looking for ways to make their dollars go further. A big one that sometimes gets overlooked is negotiating – for just about everything you buy.

Open to Negotiation

Yes, negotiation requires work. And for many, it’s an awkward proposition because sellers don’t have to negotiate if they don’t want to.

But, if negotiating isn’t your go-to means of saving money, consider this: In the current economic environment, with many consumers feeling financially strapped, companies, organizations and sellers from many segments of the market may be more willing than ever to extend discounts or other allowances that can help them retain business.

Whether it’s a one-time purchase like a car, or a repeating payment such as a car lease, you can learn how to negotiate almost anything, from a new furnace, to medical bills, furniture, cellphone plans and even cable services.

How to Negotiate: A Buyer’s Guide

Whether you’re negotiating a one-time expense or repeating payments, there are some basic strategies you can apply.

  • Do your homework

    Research all the details that go into the asking price, and how business history with the seller might play in your favor. You’ll want to have all of this information in front of you, in a document or report, that you can share with the seller. Your objective in these proceedings, after all, should be to make it clear you’re not simply haggling for a lower price in and of itself. Instead, you’re sharing with the seller compelling reasons they should do business with you – at a lower price.

    On that note, consider including in your rationale:

    • How long you’ve been a customer with good paying history
    • Whether and how they’ve negotiated with you in the past
    • If your request is based on a financial hardship, such as COVID-19
    • Current selling prices from competitors for the same or comparable products
    • Market value assessments from trusted third-party sources
  • Be prepared to make apples-to-apples price comparisons

    Part of doing your homework is being able to compare offered prices on a level playing field. It can be difficult to understand whether or not a price is competitive simply because sellers structure their prices differently. In the case of an auto lease, for example, some companies require a down payment while others do not.

    To be sure you’re negotiating fairly, work out the total price you’ll pay for each competitive option, so that you can understand and explain why a certain price or pricing structure is or isn’t competitive.

  • Have alternative proposals

    If it appears there is little or no wiggle room for a lower price, you might broach other options that can help save you money. For example, consider asking for a longer term, deferred payments, bundled services, an upgraded product or trade-in credits that would help to lower the payment price and save you money in the long run. In the case of a medical bill, you might ask to work out a payment plan or explore the possibility of setting up a lower professional rate at the front-end of a series of visits.

  • Have alternative options

    Before you begin negotiating with your preferred seller, shop around and secure multiple acceptable competitive options that you can allude to in your negotiations or fall back on if the negotiations don’t work out.

    Having other options makes it easier to justify your case and also gives you the ability to walk away from the negotiation if the discussions are not progressing the way you want. In fact, simply walking away from the negotiation in itself may be what allows you to reach a compromise with your preferred seller.

  • Develop a script

    Part of doing your homework is preparing a script of what you want to say and how you’ll ask for the negotiation, and how you escalate the conversation if negotiations fail. And for those negotiations that happen via email, scripting will be a natural part of the process.

    Here’s one approach:

    • You might begin by introducing yourself and explaining your situation as well as your long-standing customer history, which helps to explain why you’re asking for a lower price
    • If your budget was impacted because of COVID-19, you can ask what options may be available because of the pandemic
    • If, after making your case, the other party does not honor your request, you can also request to speak with the organization’s sales management or customer retention specialists to see if they may have more authority to negotiate with you
Whether it’s a one-time purchase like a car, or a repeating payment such as a car lease, you can learn how to negotiate almost anything, from a new furnace, to medical bills, furniture, cellphone plans and even cable services.

Negotiation Is About Preparation

Ultimately, most negotiations boil down to three time-honored techniques:

  • Doing your due diligence when it comes to understanding fair market pricing
  • Knowing your acceptable compromise
  • Being prepared to make and stand by your case, even if that means you have to walk away

With those guidelines in mind, give negotiating a try. You could be pleasantly surprised at the results of your efforts.

This information and recommendations contained herein are compiled from sources deemed reliable, but are not represented to be accurate or complete. In providing this information, neither KeyBank nor its affiliates are acting as your agent or are offering any tax, accounting, or legal advice.

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