We Brits have long had a well-deserved reputation for our profound reluctance to haggle. Whether this is because we fear that haggling is impolite or we think it’s beneath our dignity, many of us are all too willing to accept the asking price on everything from cars to energy services to goods at a high street shop. At the same time, though, most of us are concerned about saving money, and haggling is in fact a legitimate and perfectly proper way to do just that. Many sellers of goods and services – more than you might think – are willing to negotiate. But it’s up to you to ask, because few merchants will volunteer the information that their prices aren’t set in stone.
Negotiate With Actual Decision Makers
Some if not most people who try to negotiate for a better price end up frustrated, not because the business refuses to haggle, but rather because the customer never gets around to talking to a person who has the authority to offer reduced prices. Such customers will usually accept rejection from employees whose authority is limited to offering a boilerplate rejection of the customers’ offers. Your task, then, is to ensure that the person you’re talking with is allowed to negotiate.
Phones, Internet Acces and Sky/Cable TV – When you call your network provider’s customer service line, the person answering the phone will more than likely be a low-level, poorly paid employee who has virtually no authority beyond parroting the company’s policy of refusing to negotiate. Ask to speak to a supervisor, who will have marginally greater flexibility.
If you are still getting nowhere, tell the supervisor that you are on the verge of switching providers or come right out and ask to speak to a customer retention representative. You might be pleasantly surprised at these employees’ authority and willingness to negotiate rates. Especially in these highly competitive businesses, the cost of enlisting new customers is significantly greater than the cost of giving an established customer a break, and if push comes to shove, they will usually grant significant concessions rather than lose a paying customer. If you can’t get a better deal from your current provider, start checking with their competitors to see if they can beat the deal you’re currently getting.
Shops, from local to the superstore – It is only natural for us Britons to assume that the price marked on every item in a retail store is non-negotiable, but that is often not the case. The hourly employee clerk is unlikely to be authorized to reduce the price of an item except under the store’s price-matching policies relative to other stores or online businesses, but those are but your first line of negotiation.
If that fails, ask to speak to the department or store manager, and ask him or her whether there is any flexibility on the price. Especially on slow-moving or end-of-season items, the manager or owner might be willing to reduce or even eliminate the profit on an item, rather than have the item linger in unsold inventory until the next year and run the risk that it will be unsellable and have to be written off entirely.
Beat The System (designed to make you pay as much as possible)
Gas and electric service providers – When you sign up with an energy service provider, their default practice is to offer you their standard tariff, which is always the most favourable (as in profitable) to them. The government’s Office of Gas and Electricity Markets (OFGEM) provides information on getting the best deal on energy, and a link to a free tool to help you be a better-informed Energy Shopper by allowing you to compare different tariffs to see which is best for you. Your service provider might not particularly like dealing with an informed consumer, but your bank account will be very appreciative.
Car dealers – The car dealership is merely the last segment of a business model specifically designed to make its customers pay more than they have to. To become a savvy shopper, you will need to educate yourself not only on the details and specifications of cars you are considering, but on the objectives and logistics of the selling process.
The system itself is a racket that extends all the way back to the manufacturer. For example, the dealer’s invoice, which you are supposed to believe reflects the price the dealership pays for the vehicle, is actually inflated, often by hundreds of pounds, over the vehicle’s cost to the dealer. It should be noted that some charges, such as dealer prep, or dealer-installed options are also up for negotiating. They hope you’ll just accept these charges as fixed costs and agree to pay them without hesitation. Don’t. Many if not most of these charges are “dream” add-ons that dealers will readily eliminate if they believe the charges might be a deal breaker.
Ask to see the invoice on the vehicle, and after deducting the above dealer charges, offer £500 to £1,000 less than the invoice amount. The salesperson will likely wring his or her hands, grimace, and say that he or she will have to consult the manager, albeit with little hope of the offer being approved. It won’t be, but a counter-offer will be made, somewhere between the invoice amount and your original offer. This process might take several rounds before you arrive at a price that is mutually agreeable.
Once you have an agreement on price, you will likely still be faced with the dealer’s financing options. Decide whether you want to focus on total price or payment amount, and don’t let the salesperson switch back and forth. That is a shell game that the customer always loses. Unless the dealer is offering a particularly low interest rate with no fees to raise the cost, you will probably get a better deal by financing the car through your bank or another lending institution. Be sure to shop as diligently for financing as you do for the car itself, as many dealerships make more money off their financing contracts than they make on the sale of the cars themselves.
Haggling works best if you approach it with a positive attitude, anticipating a good outcome but not so attached to said outcome that you get upset or, heaven forbid, behave rudely if the seller refuses to budge. Always err on the side of politeness (unless you have truly been overcharged for something, at which point you do need to be more assertive but still civil). Think of haggling as an enjoyable game in which everybody wins: you get a good price, and the seller gets a sale, your goodwill and hopefully your continued patronage. The important point is that you need to get over your fear of haggling, or you could miss out on an opportunity to save hundreds or thousands of pounds a year.