"Have you actually implemented this successfully, or is this purely theoretical?" (Nate0123)
Both buying and selling. And dealerships may want to get the max price, but most have a factory sticker on the window with the retail price before taxes and incentives. That is the price I negotiate from, with the salesman in front of me at the sales desk. When I make an offer, I write my bottom line and add + all taxes, and minus all incentives. I do not negotiate the incentives until after the purchase price has been established. And I do start from a price at least 1000 below what I hope to pay.
With this method, I have bought two new hondas and two new fords, getting great prices on all, and each time, I came prepared to buy, and walked away when negotiations ground to a halt. They never let us leave the lot.
We walked away from the local Mazda dealer twice, 1st on a 6 wagon (GT 5 spd), and once on a 5 GT 5spd. Dealer called back both times, but they took 2 days, and we made deals on cars from another dealer both times. While they were used cars, I used the same method (start 1000 below what I wanted to pay) and got the pricce I wanted to pay.
With N.A. manufacturers, sometimes the new deal is already unbeatable-Ford dealers are offering 10000 off the retail of extended cab 4x4s, and some are even advertising prices of 25000 or 0 down and 299 a month, so I would only strive to get the advertised deal, rather than following my system.
As a car salesman for ford and volkswagen, I encouraged my customers to follow this practice, but I would only suggest that they start negotiations below the price they thought was a fair number, then work up to that number. They would usually start too high, but they liked the sense of control that came during the negotiation process. As a result, the customers often ended up paying more than they would have if they let the dealer set the discount price.
However you end up negotiating, keep a few things in mind: go to the dealer that has the car you want to buy, be prepared to make the purchase if your price is met, and be prepared to walk away from a deal that you are not comfortable with.
