subject: How to Negotiate Your Costs [print this page] How to Negotiate Your Costs How to Negotiate Your Costs
If you think haggling is onlyappropriatewhen you're buying knickknacks at a street fair or when youtalkto the used car dealer - you are wrong. Why wouldn't you try to negotiate your medical bills? Or a new microwave oven? If you're paying sticker price for these items, and other goods or services, you're just throwing that money away. All you need to do is ask!
With that in mind, take a lookat the following tips about how to negotiate the best possible deal on 7 common costsand expenses:
Salary
- It's negotiable because: Whetheryou areemployedorjustlooking fora job, there is possibilityfor the negotiation over salary.You should be well awareabout how essentialyouare for your employer and how important is your workplace.That way you'll be prepared to get what you're worth and to get a job offer that's realistic and reasonable.
- What to do: Speak to your (future)employer.
- How to do it if you're looking for a job:When interviewing for a new position, don't bring up the salary until the employer makes an offer. If you're asked about yoursalary requirements, say that they are open based upon the position and the overall compensation package,or tell the employer you'd like to know more about the responsibilities and the challenges of the job before discussing salary. Also, asimple "I need to think it over" can get you a salary increase.
- Howto do it if you're already employed:Set a pay increase goal in your mind, that appears to reward your contributions. Timing is essential, don't ambush your boss. Instead set up a meeting. Be direct and say to your boss: "What do I need to do to get the raise I think I deserve?". In case your request is denied, don't just walk away, be persistent.
-Potentialsavings: A salary should be based on your performance and market data establishing the value of your job. Also you should make your research and compare your salary with others insimilarpositions.If you'rethinkingthatyoursalaryis anything lower than what you deserve, don't settle with it.
Credit Card Rates
- It's negotiable because:Now that dust has settled following the big credit card reform plan, card companies are competingagainfuriously for new customers. Issuers sent out 1.2 billion credit card offers in the third quarter of 2010 - more than 3 times the number sent during the same period in 2009. You should use that competition to your advantage. Don't accept the first offer, goaheadand argue for the best rate.
- What to do:Call the 800 number associated with a new card offer (or the number on the back of your current card) and talk to the customer service representative. If the they can't, or won't adjust the rate, ask to speak with a manager.
- How to do it: Say something like: "I have several credit card offers with lower rates. Tell me what you can do to beat those offers?"
- Potentialsavings:How much you're able to lower your interest rate will depend on your credit and payment history, as well as your credit score. In a study conducted by the US Public Interest Research Group several years ago, more than 50% of consumers who asked for lower rates got them.
Mortgage Rates
- It's negotiable because: Mortgage lending has gotten difficult. That means that a lender will work hard to make a deal. And that's particularly true for consumers with credit scores of at least 750.
- What to do: Speak to mortgage brokers at banks and credit unions.
- How to do it: Get several estimates in writing and ask, "Here's the best deal I've gotten. Can you beat that?"
-Potentialsavings: Except offering better rates, lenders can reduce certain fees or even cancel them altogether. To negotiate the lowest out-of-pocket costs, ask for discounts on all upfront fees, including application and origination fees. Comparing and negotiating mortgage fees can result in thousands of dollars of savings.
Home Improvements
- It's negotiable because: Business is slow and that means contractors are willing to lower their prices. Also, the prices of home building materials are down as much as 35% from their peak in the mid-2000s.
- What to do: Talk to your contractor.
- How to do it: Ask your builder/contractor: "What are your options on less expensive materials? What discounts can you offer me on labor?"
-Potentialsavings: You could save up to 20% of the cost of the entire project. Surveys show thatmajorityof contractors (80%)were willing to drop their prices to get a job. More than half of them said they were willing to lower prices by 10%, and nearlyquarterare willing to drop their fees up to 20%.
Home Appliances and Devices
- It's negotiable because:Store managerunderstand that a discounted deal done today is often better than a potential deal in the future, and definitely better than no deal at all. One trick is to go first thing in the morning or just before the store closes when there are fewer customers. Because manager will hesitate to offer a discount if he thinks he'll have to make the same deal with all of the customers who overhear the negotiation.
- What to do:Approacha store manager or assistant manager.
- How to do it: Just say: "I like this model. If you can give me a discount and free delivery, I'll buy it straightaway."
-Potentialsavings: Watch out, profit margins are generally low on appliances and electronics, so getting 10% off is a reasonable goal, especially if you can also get them to throw in free delivery and installation.
Cars
- It's negotiable because:Car dealerships are places where pricenegotiations are actuallyexpected.But instead of trying to negotiate your purchase price down from the sticker price, as you might for other items, ask to see the price the dealer paid for the car, and work your way up from there. You can look up dealer invoice prices for free on Web sites likeIntelliChoice.com, Edmunds.com, andKBB.com.
- What to do: Speak to sales staff.
- How to do it: Tell them: "Another dealership gave me a better price on the same model. Can you beat their offer?"
-Potentialsavings: It's possible to save more than $1,000 on a new car by negotiating smartly.
Medical Bills
- It's negotiable because:People usually assume that the cost for medical procedures and tests are set in stone, but often they're not. Asking for potential discounts is quiteappropriate. Also thesecostsvary a lot, soyou can take a look at the average prices in your area for various procedures at Healthcare Blue Book.
- What to do: Contact the billing administrator.
- How to do it: Say: "This is a considerableexpense for me. Can you provide a discount for paying upfront or in cash? What other kinds of discounts are available?"
-Potentialsavings: 50% percent or more. A survey found that 74% of respondents who negotiated their medical bills were successful, often paying less than half of the original cost.
TheConclusion
You shouldn't hesitate with trying to negotiate your costs. It's nothing to be ashamed about. The best advice is tobe persistentanddetermined, to go and ask for it, and the result should come.
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