In many cultures around the world negotiation is a part of every day life. No one pays the listed price for an item; you haggle until an agreement is reached. In American society this is practically unheard of. We tend to see the price tag, determine if we can afford it, and swipe the credit card. Yet there are many things you can save money on by negotiating. Here are 12 things you can negotiate for a better deal.
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Cable and Internet Service
In a highly competitive market like cable and internet services, negotiations can save you thousands. This is dependent upon your area — if your community only has one real option you will find it tough to negotiate because of the monopoly. However, if your neighborhood has 2 or more options for service then you can get the various providers to compete for your business.
All companies have a “new customer deal” that is drastically less than what current customers pay. Sign up for the deal today, and when it expires call back and ask for another discount. If you don’t get what you want you can change providers. Most service companies with throw bonuses and discounts at you when you call to cancel because they would rather keep you than lose that revenue stream.
Cell Phone Service
With their fixed contracts and early termination fees you would think you wouldn’t have much luck negotiating with your cell phone company. This is partially true. You can often get early upgrades several months in advance of the end of your contract if you call into a customer service line. The company would rather keep you locked into a contract if it can. You have the most negotiating leverage if you are out of contract.
Haggling for vehicles is so prevalent that CarMax came up with a business model that makes car buying “easier” because you don’t have to haggle. (Of course this model includes a few thousand dollars in profit on each car sold, too.) When negotiating on a vehicle make sure you focus on the vehicle price. Dealerships are well schooled in getting buyers to focus on the payment cost or the interest rate. This lets them hide the cost of the vehicle (it might only be $199 per month but you might be paying $6,000 above what you should pay) or the length of the loan (instead of 36 months it is 60 months so you can afford it). Focus on the price and use what leverage you have. It is often best to negotiate toward the end of the month or end of the quarter when the dealership is trying to make that last important number.
Negotiating the price of a home purchase is a given. That’s why sellers list homes higher than what they sell for — they expected negotiations. You’ll have the most leverage in desperate situations such as when the homeowner is transferring and has to sell quickly or if they are facing foreclosure. However, don’t focus on price alone. Sometimes a seller doesn’t have the room to negotiate on price because they would have to bring cash to closing that they don’t have. Instead of asking for a price reduction you could ask for some or all concessions.
- Usually, major appliances and fixtures come with the home, but you could negotiate for some of their furniture and yard tools.
- Things bound to break during the first year of ownership. Another smart thing to negotiate for is a home warranty service. This service will cover the cost of repair or replacement for most appliances and almost anything that is attached to the house. This is an especially good coverage to have if you buy an older home with older appliances.
- Another thing you can ask for is closing cost assistance. This could be all of the closing costs or a percentage of it.
When we negotiated for our recent home purchase, we didn’t ask for a price reduction, but the seller bought us a home warranty service, covered all of the closing costs, and left us a few gifts.
All Types of Insurance
If you aren’t regularly looking for lower insurance costs, you’re probably paying too much. You might have some success negotiating directly with the insurance company, but the easiest way to “negotiate” is to price check other insurers. If you could save $50 per month on a different car insurance policy you would save $600 per year. Instead of jumping ship immediately to the new company (which can be a pain) call up your current insurer and see if they can beat or match the price. This applies to all types of insurance.
Companies That Use Groupon or Other Deal Sites
Here’s one you might not think of. If a company is willing to use Groupon, LivingSocial, or any of the other deal websites, they obviously have some room for negotiation. Here’s why: when a company uses a Groupon they are usually discounting their regular price by 50%. Then they split what is left 50/50 with the deal website. So something that they would normally sell you for $100 will be discounted to $50, but they only get $25.
Instead of taking the Groupon you could go to the store and talk to them about getting a better deal. You could offer $40 for the same product or service. You end up paying less than what you would with the daily deal site, but the company ends up with a bigger chunk of revenue. It’s a win-win.
We’ve shown you in the past how you can negotiate medical bills, but it is worth mentioning again. Your medical professional would rather not write off your entire procedure as bad debt. Working out a payment plan with 0% interest will save you money or you can offer a percentage of what you owe up front in cash. There is a lot more room to negotiate than you would expect.
Credit Card Interest Rate
Credit card debt is a fast way to ruin your finances. Paying 20% interest for anything is going to be a bad deal. But once you’re in debt it can be really hard to dig out because of the payment terms and interest charges. Calling your card company and asking for hardship assistance, a payment plan, or reduced interest can cut your interest rate in half or more. This is similar to the medical bills — the card company would rather get a majority of your payment (or all of it at reduced interest) than sell it off to a collections company for pennies on the dollar.
Did you know you can negotiate your monthly rent cost? This works both when you’re looking for a new apartment or when you’re renewing your lease. When looking for a new place you can simply show other apartments that are offering lower costs. The property management company would much rather have leased units than empty units that cost money. Knocking $50 to $100 off the monthly cost could be pretty easy.
Likewise if you are renewing your apartment lease be sure to ask for a discount for being a good tenant. You can only pull this off if you’ve paid on time consistently and not caused any complaints from your other neighbors. Again, it is easier and much less costly for the property management company to keep a good tenant than to look for one while holding an empty apartment.
Buying a home? Be sure to negotiate your closing costs with your financing company. When you get your closing estimate it will have several built in and costly areas of profit for the bank such as administrative costs and documentation fees. These fees can be several hundred dollars each. Get them removed and instantly save a lot of money.
Negotiating for furniture isn’t always the easiest thing, but the furniture market is usually a high-margin area with some wiggle room. You can buy floor models, ask for better financing, or simply ask for a lower price. If you are in the market for antique or used furniture, negotiating is part of the sales. If you buy antique or used furniture without negotiating, you are throwing away money!
Almost any kind of fees can be negotiated. I have negotiated late fees and finance charges, installation fees, new cellphone activation fees, subscription fees, service fees and more. You should always ask for the fee to be waived or reduced, if you feel that you are being charged for some thing unreasonable, feel that the fee is excessive, or if you have a good history with the service provider.
Kevin Mulligan is a debt reduction champion with a passion for teaching people how to budget and stay out of debt. He’s building a personal finance freelance writing career and has written for RothIRA.com, Discover Bank, and many others.