Buying - strategy and tactics

[ragkar]

Well, I bought a JD2320 today. I thought that my pricing tactics might be interesting.

First of all, I'm a non-user of tractors not even a tractor lawnmower. And I know that I'm a poor bargainer. So I did a bit of planning.

The purchase today was my third visit to the dealer, deliberately.

On the first visit my enthusiasm built as I realized that this was an item that I needed. I talked to a few customers that had been around the block and asked a lot of dumb questions. But I never make a major purchase on my first visit especially as in this case, as ignorant as I was.

Before my second visit, a week later, I did a lot of research on the web and in the neighborhood. I talked to a farmer with a JD655 and got straight answers about this dealer, his discounts and the accessories that might be useful. I did a lot of searching on the web for reviews and found this site, thanks guys. My choice settled on the 2320 and I did more research on bucket size, usefulness of various accessories, limitations, servicing, reliability etc. I also visited the JD configurator - terrible program - and got list prices. Then I visited the sales dealer a week later to ask questions and verify the list prices. I told him straight out that I wouldn't buy this visit but I would be back in a week.

Prior to the third visit I prepared a listing of all the accessories for this tractor and the list prices. I also scanned the forum comments for info on how much other people payed for this or similar configuration. I was able to find people that got 2%, 5%, -1%, 8%, 6%, 0% discounts.
Then I prepared a typewritten listing of the configuration I wanted together with the list prices. A nice touch was on the bottom of the list I had the cost of the item with a 3.4%, 10%, 12% 15%, 18% discount. My plan was to give the salesman a copy of the listing and say that I wanted to buy this. The 3.4% discount was for the printed-on-the-dealer's-sales-tag offered discount.

If you search the web for car buying tactics, they have very good advice. Like visit in the afternoon, on a rainy day, at the end of the month, at the end of the quarter during a slow season like winter. Also begin by announcing that you've come to buy. For a car, don't listen to the offered cash discount, add up the blue book dealer costs and add $400-$600 to that for his profit. Unfortunately I couldn't apply most of those tactics today.

On the third visit I dressed fairly well, had a good breakfast and showed up just before noon. The first words out of my mouth were 'I've come to buy a tractor today'. He started out with a which one, what accessories etc and then I handed him my typewritten list. I said that this is what I want. No questions about this and that - this is what I want. Then I brought out my calculator and paperwork while he checked with his computer. He finally came up with a number and I calculated it to be a 5% discount.

His strategy was 'We now have 18 machines on back order and sold 8 last monday alone.' Ie. We don't need your purchase. Nonsense.

Out came my checkbook and I told him that I was prepared to pay him in full today. I told him that it would be a quick profit for him and he wouldn't have to worry about his bank financing. I said that he would even be getting interest on my money until he payed JD for the machine. But in return for paying cash, i want a no-later-than delivery date written on the sales slip.

That earned me another two percent discount.

So I wound up with seven percent off. Not real good but not bad either.

Does any one want to contribute comments that other potential buyers can use when it becomes their time to buy?

 

[EdC]

Ragkar
Welcome
Your system works, I've heard of bigger discounts and I have also seen a lot smaller. Almost as important as price (at least in my meager little mind) is the service relationship you build with the dealer. Hope you enjoy your 2320 as much as I've enjoyed mine, all of 37 hours on the clock woohoo.

Fill out your profile, tell us about yourself and we all really like pictures. When is the delivery date?

 

[GordNovo]

I like playing the "Although I'm buying a tractor, you're really buying a long-term customer" angle. It's important that they understand that the tractor sale is not the last time they'll see me. If I get a good deal on a unit, I like to go back and get parts, supplies from the same dealer as well.

Cash deals are always the best way to walk into a purchase as well. That JD financing costs the dealers money.. so paying cash is ultimately cheaper for them anyhow.. in my case about 10% I figure. The reality is that local bank rates are often better than what JD can offer.

Another tactic I use is for them to understand that I really liked the other brand tractors as well. I did my homework and made sure I understood the specs of the competitor machines. When they know that you're likely sway to another color, they're more likely to knock the price down a little further because a sale for them would mean a lost sale for their competitor. This was a key tactic when I bought my Dodge Ram .

Oh.. and I find that when the you're finally settling down to the final price (the nitty gritty) say you'll take it if he throws some other small items in. "OK, let's do 22.5K if you throw in my first 50 hr service parts". Then I do what Borat does.. I spit in the palm of my hand and put it out for him to shake!! Just kidding


Congrats on the new tractor. I was a complete newbie too when I bought my original 2305. But it's become a real love affair for me, just like most of the others here on the forum.

Gord

 

[ultrarunner]

I grew up in the family auto business and I agree that knowing exactly what you want makes you a strong buyer and being able to pay for it reduces the entire buying experience to one question... can we agree on a price.

My Grandfather taught me at a young age that it is much easier to bargain on a NEW anything vs something that is used for the simpler reason that new merchandise by definition is identical, offered by many sellers and comes with a manufacturers warranty. On the other hand, every piece of used equipment is unique based on usage, age, condition, etc.

By knowing what you want and taking the time to put it on paper, you've just eliminated 90% of the selling part of sales.

Nothing gets a dealer's attention more than a buyer ready and able to buy.

Enjoy your new tractor and don't forget to post a picture...

 

[ragkar]

I missed asking him to throw in 'extras' as a buying and future servicing incentive. Like an orange slow-vehicle triangle and 50hr servicing. I also didn't mention that among my papers I had a 'crib' sheet with things like "dress well, eat breakfast, show up just before noon, announce that......."

Here's the 'want' list that I handed the salesman. Though the original was formatted better and had my name, address and phone number on it.

2320 tractor.............12839
R4 tires....................110
200CX loader............2199
61"" bucket..............564
Toothbar for 61"........313
grillguard..................0
46 backhoe...............6160
16" bucket................66
power beyond...........232
Imatch quick hitch....244

Total List price..........22727

with 3.4% discount...21945..............with tax........23262
with 10% discount....20454..............with tax........21681
with 12% discount....20000..............with tax........21200
with 15% discount....19318..............with tax........20477
with 18% discount....18636..............with tax........19754

 

[Greyfields]

I went in with the list prices, then told him flat-out I thought those were 10% too high and I'd be happy to buy the tractor at 10% off MSRP that very day. I believe I netted closer to 12% on the tractor, but smaller margins on the attachments. All in all, it's important the dealer makes money as well as me saving money, since I want them to actually be there when it comes time for repairs or new attachments down the road.

 

[prosperity]

First ragkar, let me commend you on doing your homework!
At most, it is very difficult to haggle with someone when they know the ropes (equipment), and you do not. You did an excellent job in getting your facts and figures together, and had a definite plan of attack - excellent!

When it comes to my Deere dealer, I think they cringe when they see me coming. I've been dealing with them for over 15 years now, and have bought probably 6 tractors, and lots of other stuff over the years.

I still work them to death.......

Now, my dealership just changed ownership 2 months ago, and my regular sales manager left at that time. I thought I would be lost now. During the interim, I was introduced to the "new guy". I really shied away from the whole place for a while.
But, now I am negotiating once again, and I guess I am really putting this new guy through a lot....I think. To my surprise, he is doing great, and has already met my price in my mind. Now, I'll get him to add a couple little goodies more, and seal the deal. This has been going on for over 2 weeks now. But, I will give him credit - he is being very patient with me, and when I am there gives me his undivided attention - seems like a real good guy.

Probably pull the trigger by the end of the week.

 

[dieselalles]

While I was shopping for a CUT, and based what I've read here, I based my calculations on a 11% discount. So I worked up a spreadsheet showing the list price and what it would be with the discount. After talking to the salesman, I asked for a test drive, so we went out to where the tractor was parked, and as I was climbing on, he asked me if I wanted him to hold my folder. I said sure. So as I was driving away from him, I looked back only to see him looking through my papers. At first, I was angry, , but I kept it to myself, realizing that this could work in my favor. When I parked the tractor, he handed me the folder and we went back into the store so he could give me a quote. Interesting enough, his quote included a 12% discount without me even having to dicker with him. Hmmmm.... wonder where he got that number?

 

[Kendall69]

...he asked me if I wanted him to hold my folder. I said sure.

I'm loving this one. Human nature being what it is, the guy will absolutely peek at your folder. Man is that brilliant!
Looks like I have to make up some fake documents and fake e-mails, and some fake fax's and ask my dealer to hold my folder while I take it for a test ride.
That's the funniest thing I have ever heard.
The salesman screwed himself by looking at the folder.

 

[dieselalles]

Kendall, thanks. And my wife, who is a genuine sales puke (and I say that with kindness ) just hee-hawed when I told her. She said I should have bumped it up to 13 or 14 percent. On this, I was innocent as a lamb. It was completely unintentional. But next time I might not be so innocent. On my hook or I mean in my folder with be this fax looking thing with John Deere letterhead. Maybe he'll take the 14% bait!