Researchers at the University of Pennsylvania report that people who are penalized for not achieving weight loss goals lose more weight than people who are rewarded for achieving the goals – by a large margin, and even when the dollars involved are the same!  The stick is more effective than the carrot.

In car buying, most people people enter into a price negotiation with a carrot approach;  “If you meet my price, then I will buy this car from you.”  The base case is that there is no deal – only if the dealer meets the customer’s needs will there be a deal.

This research suggests, but in no way proves, that perhaps there is a different approach to success—using a stick.  The customer’s position can be that there is a complete and final deal on the table.  In effect, the vehicle has been sold, and unless the dealer screws up, the vehicle will stay sold.  The base case here that there is a deal.

The idea is that the dealer will feel penalized if the deal does not happen, rather than feeling rewarded if it does happen.

How to have a completed deal as a starting point

You have to be truly ready to buy for this method to work.  Do your research and determine the price that you will pay for the exact vehicle that you want.  You can of course use Carjojo for this phase.

Go to a bank or a credit union and get a cashier’s check or money order for this exact amount, payable to the dealer.  When you go to the dealer, show him this check and hand him a photocopy.  Let him know that you will of course pay taxes and registration fees on top of the amount of this check, but this is the check that buys the vehicle.  Make it clear that the vehicle is sold at this price, but there is no deal at a higher price.

The salesperson will take this check to the sales manager and it will be discussed.  You of course need to be ready and willing to take the check back and leave the dealership if the dealer starts to negotiate.

You are now at a great advantage.  The dealer sees the check and realizes that the vehicle is truly sold – the money is in his hand.  And he loses the deal and the money unless he says yes.

There is no guarantee that this method will work, of course.  But, if you’ve researched the price and know the price you’re offering is a good price for you but a fair price for the dealer, there is every reason to think they’ll say yes.

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