Get Your Money’s Worth

Thinking of making a big purchase soon?  How can you get the best deal and have a great time, simultaneously?  Today we’ll explore a few best practices for buying big ticket items like a car or a new appliance, to ensure that your dollars work as hard for you as you worked to earn them!  🙂

Use Your Own Money

The first step to any big purchase is saving up the money!  Obvious as this sounds, it is a rather uncommon practice today.  Many retailers make big money selling financing, and therefore market it heavily.  They don’t usually have a tough sell either, since by nature we tend to want the nice things now, and patience isn’t usually too fun!  But if you will slow down and consider it, I think you’ll realize that by nature debt reduces your options and inhibits your freedom.  There’s a reason that it feels so good to pay cash for things, and this is what wise and wealthy people do.  In fact, it’s habits like these that typically made the wealthy wealthy in the first place!  For more on that, check out “The Millionaire Next Door,” a great, fact-based book that will likely surprise you in more ways than one!

Narrow the Field

Once you’ve saved the money, your next step will be to determine what models and features are available to you in that price range.  If you’re looking at a car, for example, you can use resources like Craigslist and kbb.com to identify particular year/model/mileage combinations that are in the right range.

Taste and Sample!

Now comes the fun part—go looking!  Seek out at least three stores or individuals offering the model or models that you’re looking at.  Try out the features, and hone down your short list of models to the one you like best.  As you begin to settle on the particular item that’s best for you, take note of any optional features or upgrades.  In many cases, buying a higher-end model with extra features can offer more long-term value, but this is very dependent on what you’re buying.  (A quick aside, I’ve become convinced over the years that spending a little extra on leather seats for a vehicle is money very well spent!  Particularly if you have kids…  🙂

Fit and Price

After looking at the model you like at a few places, you’ll start to have a feel for what a good deal is.  Resist the urge to get in a hurry and instead remain calm as you seek for the ideal fit.  Once you’ve found a good price on your item, let the owner or salesman know that you’re thinking this item is a good fit.  I used to think that feigning disinterest in an item was a good way to get the seller to come down on price, but have learned from experience that this doesn’t work.  Instead, make the sales process into two steps.  First, decide if the item meets your needs/desires.  Once you’re convinced it does, let the seller know, but then go right into the price negotiation.  So, you might say something like, “This electric stove seems to be just what we’re looking for.  The price, however, does seem a little high.  How flexible are you on that figure?”  This is a useful tactic because it lets the seller know that there’s only one thing stopping you from buying the item:  price.

Have Fun and Be Creative

Now for the next fun part—price ping pong!  Let the seller make an offer, then counter with a lower one, have a good time (without insulting anyone).  Somewhere along the line, you’ll want to pull out your envelope of cash and start rifling through it.  I don’t care who you are—a stack of hundreds makes your eyes get bigger and your heart beat faster, and you can use this method to stir the seller into accepting a lower price.  If you’re starting to get close, a fun way to end the negotiation goes something like this:  “I’ll tell you what, I’ve got $4,700 right here.  Say the word and it’s yours.”

Sometimes, your man won’t be willing to come down as far as you’d like.  Don’t fall in love with a particular item and keep your walking away power—there are plenty other deals out there for you.  Or, if the price is still a bit higher that you’d like, but the particular item seems worth the extra, it’s ok to pay a little more than absolute bottom dollar.  Just have fun, keep your head, and enjoy the process!