Negotiating for a motorhome
Most of us have heard stories about unscrupulous car salesmen. Some of whom will do anything to get a sale. This article will help you avoid some of the bigger mistakes that people make when negotiating for a motorhome.
Is the motorhome salesperson the same animal as the car dealer? Once we step into the motorhome dealership, it often confirms our worst fears. We will see all those heads turn toward us. Suddenly we feel like prey caught out in the open by a pride of lions; except these lions are wearing smart suits; one of them picks you out and makes towards you showing his teeth. You feel like someone’s lunch. You’ve just met the motorhome salesman.
A good salesman is nothing like this. He/she will quickly put you at ease, and will do all he can to show you they are not one of those stereotypical motorhome salespersons. He will attempt to show that he is on your side. He will give you plenty of space to look around the dealership and only when it looks like you have chosen the motorhome you want, will the good salesman compliment you on your choice and the negotiations can begin.
Remember that the majority of motorhome sales people will have been trained to obtain the very best profits that they can, but that does not mean you cannot get a good deal.
Your aim is to ensure that negotiating for a motorhome that the choice YOUR choice and to save as much as you can. Too many people leave a motorhome saleroom paying too much something the salesperson wanted them to have.
A Win-Win situation
We touched on this last month. Both parties must feel that they are getting a good deal. It’s essential that the dealer turns a profit on each sale; your job is to ensure that his profit is as small as the dealer is happy to accept. The dealer will not think less of you for negotiating hard, however, if you pay the asking price with no negotiation, the smile he wears when he shakes your hand will be genuine, but inside he will think what an absolute sucker you are!
You should never pay the price in the windscreen
You must absolutely expect a discount. If you go into a buying situation, not expecting to get a discount, then you most likely will not get one. Be positive, follow the guidelines here and the discount will be yours!
If the motorhome you are buying is brand new, then anything wrong with it, or not working on it, you would expect to be put right for free. However, when buying a used motorhome, there are bound to be things wrong with it. Tyres might be old, or the bodywork might have scratches or dents. The interior may have things broken or need replacing through wear. The awning might be threadbare, so might the curtains, the window blinds. The mosquito blinds could have seen better days, cupboard doors might not close properly etc.
Anything that you notice wrong at this stage should not be mentioned now. When the negotiating has almost finished and you have already got the price down as much as you think you can, it is then that you can secure further reductions in the form of work done, parts replaced or extra money off the asking price.
Try to build a rapport with the salesperson, but remember you are not trying to become a friend. We need to haggle hard, but being blunt and or aggressive during negotiation just will not work. It is rare to find a dealer that needs the sale so badly that they will tolerate an aggressive attitude. Chat to them and be warm and smiling whilst looking at the motorhomes.
Negotiating for a motorhome can be stressful
Stay calm throughout, you might get excited, thinking you doing so well; you might get mad at the derisory offer for your part-exchange, but throughout stay calm. The best deal will always be made by those who are cool calm and collected.
Too Embarrassed to Haggle
It amazes me how many people never ask for a discount because they feel embarrassed. The truth is you should feel embarrassed if you do not! If it helps, make an excuse or tell a white lie, as to why you need a much lower price.
The Higher Authority
“This is the motorhome I want but if I pay this much my wife/husband will murder me” or I am already going over agreed budget – What can you do to help me?” “ I do wish I could have this one, I just don’t have that much cash”
This kind of negotiating allows you to remain reasonably friendly with the salesperson but you are still pushing hard because of your wife/husband, bank manager.
They will use it too
The salesperson will use the same (higher authority) tactic on you, “I’d love to help but if the boss finds out I let this motorhome go for X, then I will be out of a job”
If you make an offer and he absolutely refuses to take it to the boss. Then ask him if you would be better off dealing directly with his boss or someone who has the authority to do a deal. This stings, so use it sparingly, but in almost all cases it will stop them using the Higher Authority thing again.
Your opening bid
You cannot start to Negotiating for a motorhome until you are absolutely sure what the van is worth, you will (should) know the specs of this van better than the dealer. You will know exactly what your target van has recently sold for, you will have asked on forums and on Facebook groups what you might expect to pay for that model and year. You would have checked the completed sales on eBay.
A well-made opening offer will set the scene for the rest of the negotiations.
This is where both parties’ expectations are fully realised. This is where you find out whether you will get that motorhome for a song or whether you will pay through the nose. The seller knows immediately the offer is on the table whether he has a fight on his hands, whether the buyer is genuine or a time waster.
Let walk through the start of a negotiation. Assume you are about to negotiate on a motorhome with a window sticker of £78,000.
All your research leads you to believe that this motorhome is worth £72,000 maybe a fraction more. So in your head you set your buy price at 72k, not a penny more.
Look at chart above. The seller has got to give away £6000 from his sticker price to get to your price. Your opener should give you £6000 to play with too, so your first offer should be £6000 under what you want to pay.
Let’s have a look how this might pan out, the buyer text is red the dealer’s is blue
So what is your best price on this van then?
We’ve discounted this one already so the best price is on the windscreen
That’s a bit too expensive for me, is that really the best price? I’m sure Ive seen this van cheaper at (Name a rival dealer)
At this stage the dealer will not offer you a lower price, why should he? He would be bidding against himself, he’s given you his price, that won’t change until you make an offer. He might say the van you’ve seen is a different spec, he might say that they have a better reputation than the rival dealer, he might say a lot, but he won’t lower the price until you make an offer.
That’s the price, what did you want to pay then?
I like the van and I’d like to make you an offer of £66,000
Don’t panic at this stage, yes it might be 12k under the window price, but hold your nerve, both you and the dealer know you are likely to meet somewhere in the middle.
£66,000! Sorry this is a quality van, no way can we let you have it for £66k That is less than we paid for it!
Buyer says nothing
Have you got something to part exchange?
Ignore this, even if you have, say you’re selling privately or you’re not sure what you are doing with your van yet.
Look, I really like this van but all I have is 66k
Well that is two of us that can’t afford it sir and if I sold it for that I’d be out of a job. If you want it, you need to make a much higher offer.
Don’t offer any more, ask him to take it to his boss. You are waiting for a counter offer. It will come but make sure it does not come from you.
Look, tell your boss I’m a genuine cash buyer offering £66k and see what he comes back with.
At this point, chances are; one of three things will happen.
He will make you a counter offer, ie take something off the windscreen sticker price
He will make a show of seeing his boss and coming back with an offer.
He’ll say it’s impossible, but he has something else to show you, more in your price range.
On the way over he’ll tell you what a good option this is. But the chances are; this van will be entirely unsuitable and poorer quality or older, but he’s not trying to sell you this one. It’s a ploy. The whole idea is to convince you that you really want the one you’re negotiating for.
Your subconscious will be telling you, this is the one, the others are rubbish.
The dealer knows the more you want it, the more you’ll pay. ie you’ll stop haggling sooner.
So as soon you are back at the van you want, nine times out of ten you’ll get your first offer.
Don’t expect him to move much, but now you can move too, countering a similar offer.
You are both now moving toward the middle, your pre-determined buy price; and you both have to give up the same to get there.
The Negotiation Game
If you’ve not negotiated before you are going to feel a little uncomfortable, but once the negotiation starts and you see the price moving nearer to your target you will feel better.
Try to remain relaxed, keep your target figure in mind and try not to look too worried about it.
There’s always another motorhome if you don’t get this one. Remember you cannot lose a van, if you can’t get that last bit of cash off, you can always cave in. “Oh go on then, my wife is gonna kill me” Okay, I think I can find the money, we have a deal.
The buyer has more power
You should remember that if you are buying a regular, common motorhome, then you, the buyer, will always have more bargaining power than the seller. (with special, rare or one-off motorhomes the seller might have the upper hand)
The seller has much more competition in the shape of other dealers or private sellers. They know there are always thousands of other motorhomes for sale.
When a seller finds someone like you, in a position to buy, he needs to convince you to buy from him.
The seller wants to sell, that is his reason for being, he does not want the negotiations to deadlock.
Deadlock is bad for him, but it’s not the end of the world for you. From a deadlocked negotiation you can go to a new dealer and start again, the dealer is stuck at his position.
Stalled negotiations affect the seller much more than the buyer so expect the dealer to keep the negotiations open and your responses should keep his hopes of a sale alive; while you negotiate slowly to your preferred price.
Buyers are spoilt for choice
The dealers know this; they want to sell to you, they cannot do it at any price, but if your target price is fair and realistic the chances of you negotiating down to it is very good.
Who goes first
If there is no price already out in the open, such as in an “open to offers” sale, do not be the first person to offer a price, you want to respond to a price rather than set it. In most cases the seller naturally goes first; the private seller with the price on the advert and the dealer with the windscreen price are the opening offers. Once their offer is made; you can start the ball rolling. You can try and get them to lower immediately by asking for a discount; ask for their best price or you can start right away and make your opening offer, this will lead to a counter offer being made to you.
Don’t expect it to be easy
The seller might say no to a discount or stick firmly to the window price, but equally they may well drop the price a little. Thank them for that, but you must never accept the first offer, even if it’s exactly what you wanted to hear. You are rarely going to be given the best price that easily. So whatever is offered, you must be disappointed, “sorry I just don’t have that much to spend” or “that is a step in the right direction but my wife would still divorce me” or “I was really hoping you would be able to do better than that”.
Don’t give too much away
Once you show that you are not going to accept the offer; be prepared to be asked immediately “how much do you want to spend?” or “What is your budget?” The seller is trying to find the price that you think is reasonable. Never give an absolute figure, just say “not as much as that” or “I’d rather not say’ or “surely you can do better than that”
Silence is Golden
Use the power of silence, it’s one of the best bargaining tools there is. If the salesperson makes you an offer, or you have asked them to improve their offer, resist the temptation to speak. Just wait, for a minute or so. The silence will be painful for you, but more painful for the salesperson. Eventually one of you will crack, try not to let it be you! The first person to speak will generally be the one who is compromising.
Keep emotions in check
Do not be emotional and never feel desperate to buy. No matter how much you think “this is the one, this is the motorhome we really want” The truth is that it is NOT the only one for sale. There will be others exactly the same, maybe even better, with lower mileage and keener price; such is the massive size of the motorhome market. And remember, if the dealer just won’t budge, you can always cave in.
FACT -If you don’t get this one at the price you want, there will always be another. Enter all negotiations with this in mind.
Always try for a bit more
Once the seller is at or near a price you are willing to pay, don’t give in at this point, you will often find there is always a little more in the deal. Counter with an offer a little lower but obviously a little better than your last bid, the seller must feel like the deal is going somewhere.
Don’t ‘split the difference’
When negotiating for a motorhome, avoid being the first to suggest splitting the difference (meeting in the middle). Because if you offer to split the difference the salesperson will probably split it again, which means you have moved 75 percent of the way towards the seller’s price and they have only moved 25 percent.
Go back to our example above, the window price is 78k, you offer 66k. If when he tells you no way will he sell at 66k, you split the difference and offer 72k (your buy price right) but he will um and ah then split it again, so now the price is 75k.
However, if they split the difference, then you um and ah and split it again, this brings things closer to your price.
If the negotiations have stalled or going nowhere. Deliver an ultimatum. If you think you are close to a deal, say something like “You are uncomfortable negotiating, and your final offer is 72k but only if they agree now. If they do not agree now, then tell them you will be going to another dealership, ideally a local competitor where you are sure a very similar van can be had cheaper. But… You must be prepared to walk away. Remembering again that if this really is the one, you can always crumble, come back tomorrow and say “go on then.”
Time on your side
Sales people often like to bring a time element into negotiation, they do this because it works; they tell you someone else is interested, or to get a particular deal it must be done today. If you are almost at your price but they just won’t budge for those last few pounds, Turn it around, tell them you need to do the deal today at your price, tell them you are test driving a similar model tomorrow, increase their pressure to come down that last little step to your price.
Show commitment but be reasonable
If you appear to really want to deal, then the harder the dealer will work to come up with an agreeable price, give them the idea that you will not move at all from your latest offer and they may well dig their heels in and negotiations will stall. Don’t forget the higher authority, your partner, or the loan your mum is giving you. It’s so powerful that used right, both you and the dealer will work hard to appease the higher authority.
Never be afraid to walk away
Remember we only negotiate when we already know what a motorhome is worth and we have settled on a maximum price. Never be afraid to walk away if you cannot reach the deal you want. Sometimes you will ask for too much and the deal will just not happen. Don’t worry there will be others along just like it.
Stick to your budget like a dog to a bone
Don’t go over budget, walk away, there is always another motorhome for sale. However, before you walk away make sure you have the salesperson’s contact details (and he yours) you should ideally get these details early in your negotiations.
Don’t give in too soon
Be persistent. If you have done your research and your target price is reasonable then don’t give up. The dealer will stubbornly try to make as much money as they can from the deal, that is only to be expected. You will get stonewall silence and huffs and puffs while they do this.
Now is the time to mention the things you will need to put right or added to the deal. All those things you listed can be used to lower the price, tyres and scratches etc.
If they do not meet your price, let them know you are leaving
No salesperson wants to see your money walk out of the door and this might restart the negotiation.
Always get details before you walk away
When you walk away, you may well be chased and the dealer may make a better offer. If the dealer does not chase you, all is not lost.
Lots of different emotions are floating around during negotiations and in the cold light of a new morning things can always look a little different.
Overnight you should e-mail the dealer or leave a message on an answer machine. Something like “If you can come down by another £750”, or “If you can increase my trade-in price by £500” call me by 11:00am and I will come in and pay a deposit today” This tactic may well result in you getting the purchase you want.
Never negotiate using monthly payments
Never concede to requests like; “Have a word with Nigel our finance guy” before a price has been agreed.
Your sole focus when buying from a dealer is the price of the motorhome.
Some dealers would rather you talk about the down payment and the monthly payments.
A term like “this motorhome would only cost you £x a month” is flannel.
When negotiating you start with the vehicle you are buying, get that to your target price, then if you have a part-exchange get the best price for that (which is usually a private sale!) and only then consider the finance if it’s required.
You cannot know if you are getting a good deal if everything is rolled into a finance agreement and your not sure what you are paying for your motorhome or what you got for the part exchange and how much interest you are paying.
You would be amazed how many people are bamboozled this way. The negotiatons should be carried out in a strict order. Never discuss what payments you can afford until you have the best prices.
The sale price of the motorhome, the amount you get for your trade in, if you have one. Only then, when prices are set should you discuss finance.
Remember, when Negotiating for a motorhome, that accessories and fitting will come much cheaper to the dealer, than the retail price to you; so the perceived value of an extra can be much higher for you, than for them. A fitted awning might have a retail of £900 for the supply and fit, however the true costs to the dealer might be less than half that value.
You should always try to get the accessories you require as part of the deal, but only mention them when you have negotiated down the price to very close or at your buying price.
The retail price of these accessories can be used by the dealer as a justification to keep the price high. Negotiate first, get the price as low as you can, and then, after the dealer is convinced he has a sale, and is already counting his commission, you can then ask for the accessories. Be prepared for more huffing and puffing, but remember, those accessories are costing him a lot less than you are saving and often, as long as you are not being too greedy the dealer will agree save the deal. That said, don’t break the deal here but don’t give up too easily.
What if you are just not cut out to haggle
If you are one of those people who just could not look someone in the eye and offer £12,000 less than the asking price, don’t despair there is another way. These days you can negotiate from a distance.
I recently carried out an entire negotiation, complete with an ultra low first bid, silences, higher authorities, walking away etc All on Whatsapp, a text messaging app.
Once you have found the motorhome you want thank the salesman tell him you are going to think about it, but get an email address.
You can then carry out the negotiation by email. Drop him an email asking for is best price, counter with your offer, insist he takes it to his boss, and so on.
You can still use higher authorities and the power of silence, for example not answering an email for a day two. Some people find an email negotiation far easier and less intimidating than face-to-face haggles.
Remember, a successful negotiation is where both parties are happy and would be delighted to deal with each other again. You want a fair price. Don’t be unreasonable but don’t be a walkover either. Happy Haggling!
We’d love to hear your dealer haggling stories, if you have one get in touch and will share it
This article first appeared in the February 2020 issue of MotorhomeFun Magazine
If you would like to study negotiation further then look no further than this book