WHAT NUMBER SHOULD YOU OFFER? The Homework Guy, Kevin Hunter

How do you decide what number to offer? So we covered a similar topic to this just days ago. So you found a vehicle you like, you've contacted the dealer. Now comes the question, what number should I offer? We're going into more details today. Well, right behind that question is another one. How do I know when I've gone far enough? Is there a point that I should quit? Because a dealer can offer you a big discount, shake your hand, and make you feel like you just won the negotiation, even when another dealer would have sold you a comparable vehicle for a lot less money. Today we're going to walk through the process choosing your opening number, countering the dealer's counter offer, and using competing written offers to find out who is willing to earn your business at the lowest out-the-door price. I'm Kevin Hunter, the Homework Guy. Let's roll up our sleeves and get to work. Your opening offer starts with homework. Looking at comparable vehicles, check the trim, equipment, and availability. For used vehicles, pay close attention to mileage, condition, accident history, and service records. Then collect written, itemized, out-the-door quotes from several dealers. And look further than your hometown market. That's one of the biggest mistakes car buyers make is only shopping in close proximity to home. You got to think about this. One person may own all of those dealerships, and that's why they're not moving for you. From dealer close by or far away, you need the selling price, the dealer charges, the taxes, the required government fees, and any products that they claim they have included. You also need to know what conditions come with that number. Does it require dealer financing? Does it require you to have a trade, a rebate you don't qualify for? An offer a dealer can't actually honor isn't much help to you, and before negotiating on a specific vehicle, verify the stock number and confirm it's available. You don't want to spend three days negotiating on something that was sold yesterday. Now let's work through the example. These are hypothetical numbers to demonstrate the process I'm talking about. You have three dealers quoting comparable vehicles. Dealer A is at 43,200 out the door. Dealer B is at 42,600. Dealer C is at 42,000. That's your first round. You've established where these dealers are starting. You haven't established where they're going to Because you've got work to do. Looking through Dealer C's quote, you find $1,000 in unwanted products. You ask for those to be removed and get a revised written quote at $41,000 out the door. Keep legitimate taxes and required government fees in the calculation. If a dealer insists that a dealer fee stays on the paperwork, you can negotiate the selling price to offset it. What matters is the total you'll actually pay in the bottom line. Your research suggests $40,000 would be a reasonable result. Depending on the vehicle and what the market supports, you might open at $39,000, leaving yourself $1,000 of negotiation room. The most common dealer negotiating tactic is to say, let's meet in the middle, so expect to hear that. On a more expensive vehicle, that opening gap might actually be $2,000, but the number should have a basis in the market. Taking another $2,000 off an already exceptional offer doesn't automatically make it achievable. So, you tell dealer C, based on the comparable vehicles and quotes I reviewed, I'm offering $39,000 out the door, including all dealer charges, taxes, and required fees, with no additional products. The dealer responds to you and says, we can't do $39,000, but we can meet you in the middle at $40,000. A lot of buyers accept right there, thinking the dealer has put all kinds of work into it. They hoped to get to $40,000. The dealer offered $40,000. Mission accomplished, huh? But how do you establish that target? It was an estimate based on the information you had. Now you have new information. A dealer willing to sell at $40,000. That gives you a stronger position for the next round, and the next round should definitely happen. You can counter the counteroffer. You might say, thank you, that's closer. I can move my offer to $39,300 out the door. Can you get there? You've moved $300 bucks. You haven't agreed that every remaining dollar will be split evenly. The dealer may accept, might decline, or come back again. Suppose they respond at 39.8. Get that revised offer in writing, including the conditions attached to it. Now you have something concrete to take to dealers A and B. Remember them? Their first quotes were 43,200 and 42,600. You don't discard those dealers just because their opening numbers were higher. Give them an opportunity to respond to the stronger offer you now have. You can tell them, I now have a written offer at 39,800 out the door on a comparable vehicle. Are you willing to beat that total under the same purchase conditions? Please send an itemized revised quote. That changes the conversation. You've given them a specific number they must improve to to stay competitive. Dealer A says, no, we can't get close to that. Fine, you thank them and move on. Dealer B says, we can do $39,500. Now, dealer B has moved from $42,600 to $39,500. Would they have volunteered that number if you simply accepted their first quote? Probably not, but you'll never know. But giving them a real competing offer created an opportunity for them to move. And if there's one thing you should know about dealers, they really hate to lose a car deal based on price. And you can counter-offer that offer too. Thank you. If you can bring it to $39,200 out the door with the same equipment, no additional requirements, that would put you in a stronger position. Suppose dealer B comes back at $39,400. Now the leading offer is $39,400. You return to dealer C. Another dealer has improved on your offer. Their written total is $39,400 out the door. Would you like an opportunity to beat it? Dealer C responds with $39,250. Now you have another decision to make and another documented number. You can give dealer B an opportunity to improve again. This is how you move a group of competing offers downward over successive rounds. One dealer moves, you use that improvement to challenge the others. Another dealer responds, and you bring that stronger offer back to the dealer still interested. Not every dealer will move in every round. Some will drop out. One may hold out for a while, then make a stronger offer when they realize the purchase is going elsewhere. You're learning which dealers are competing and which ones are willing to go further. But here's an important point. Don't promise every dealer you'll buy if they beat the current offer. If you're still comparing, say you're still comparing. I'm reviewing final written offers and expect to make my decision tomorrow. That's honest. It gives them a real decision window without making a commitment you don't intend to keep. When you are ready to commit, you can make a clear closing offer. If you can provide this vehicle at $39,000 even, out the door, under the conditions that we have discussed, subject to my inspection and test drive, I'm prepared to move forward. Then be ready to honor that statement if they accept and everything checks out, but make sure they put it in writing. Now let's talk about the big discount that makes people stop too soon. Suppose one dealer announces, Kevin, we're taking $8,000 off. That may be a strong discount, but it doesn't answer the question we're trying to answer. Can another dealer offer a comparable vehicle for even a lower total? Maybe their starting price was higher. Maybe the discount includes conditional rebates. Maybe they added products afterwards. Or maybe it's a legitimate, substantial discount and another dealer is still willing to go even lower. You find out by continuing in the comparison. A big discount is a reason to examine the offer carefully. It isn't an automatic reason to end the negotiation right there. In our example, your original target was $40,000. Competition brought the offers below that. If you had stopped simply because you thought you had reached the number you hoped for, you would have missed the opportunity to improve it. Your target helps you begin. The competing offers help you test what's achievable. Of course, this process eventually reaches the point where the remaining dealers hold their numbers. You've given them the current leading offer. You've asked for a meaningful improvement. They've declined or the differences have been small enough that travel, equipment condition, or financing costs matter more. That's when you compare the final deals. You won't know the absolute lowest number every dealer on earth might accept, but you can identify the lowest verified offer among the comparable vehicles and dealers. You've actually tested, and that's a much stronger foundation for buying than accepting the first impressive discount. If the prices stop moving, you can ask about something else you value. Maybe all-weather floor mats, a cargo liner, delivery, an accessory you're already planning to buy. You might say, if the price is firm, would you include the all-weather mats at no additional charge? Get an agreement in writing, but make sure the total stays the same and value those extras based on what they're worth to you, not what the dealer would have charged for them. An accessory you don't want shouldn't distract you from a better cash price somewhere else. Throughout this process, keep a simple record. Which dealer, which stock number, what vehicle and equipment, what out-the-door total, what financing conditions, when does the offer expire? Keep track of all of it on your spreadsheet. Without that record, it's easy to confuse an old number with a current one or compare two numbers with different requirements. Keep the purchase price negotiation clear, too. If there's a trade, track its allowance and payoffs separately so a change in the trade figure doesn't disguise a change in the vehicle price. And don't let the discussion drift into monthly payments. Don't go there. A longer loan can lower the payment while increasing what you spend. Now, how long does all of this take? With available vehicles and responsive dealers, a skilled coach may cover this ground in a few days. A buyer learning as they go may spend a week or two trying to do the same thing, collecting quotes, recognizing the conditions, and managing the follow-up. Those aren't guaranteed timelines. Some dealers respond quickly. Others don't. Some vehicles give you plenty of comparable options. Others are harder to find. Experience helps because you know what information to request, which changes matter, how to keep several negotiations moving along at the same time. You also know that a dealer saying, that's our final number, doesn't require you to stop checking the market. You can thank them, keep their offer on file, and continue with the other dealers. If a stronger offer comes in, give that dealer the opportunity to reconsider. They can hold their price or decide they want the sale badly enough to improve it. So, what number should you offer? Start with research, collect itemized written quotes, remove unwanted products, establish a realistic target, and choose a opening offer that leaves reasonable room for negotiation. And then negotiate. Counter the counter offer. Get the improvement in writing. Give competing dealers an opportunity to beat it. Bring stronger offers back to the dealer still in the running. Keep comparing until the responses give you a sound reason to make your purchase decision. And don't stop doing your homework just because somebody puts a big discount in front of you in the beginning. That discount may be the beginning of a good deal. The next few conversations can help you find out how much better it could get if you worked on it just a little bit longer. If you'd like help handling the research, those calls and the back and forth, that's what our car buying coaches do here at The Homework Guy. You can read up all about it at thehomeworkguy.com. Just press the big red button on the homepage. I'm Kevin Hunter, The Homework Guy. And remember, before you sign, give the competition. A chance to work.