Exercise 4 – Used Car
Used Car – Exercise 4 Our issue is that we need a new vehicle because ours was wrecked and the rental car we were given to use after the wreck by the insurance company is about to expire, leaving us no mode of transportation.We are looking into buying a used vehicle from an advertisement in the local paper.We weren’t sure if the vehicle was still available so we have called the owner and inquired.
We do not know who we are buying the car from but we are interested in purchasing the Volkswagen Jetta because of the advertisement in our local newspaper.
Just from reading the car ad; we deem that the car fits all our needs and we need to get in touch with the owner fast in order to make sure they don’t sell it to someone else. In order not to have all our eggs in one basket, we have another vehicle prospect that can be purchased, but it’s an older 1995 Jeep Cherokee for $3,800. 00. We are hoping to get the Jetta for less than the Cherokee, or somewhere within our budget, but if we can’t, we can always buy Cherokee for less.
The issues that are most important are trying to come up with a deal that will satisfy thefinancial limitations we have while getting something that is worthwhile and will give us a return on our investment. The issues that are less important are probably taking a vacation at this point if it means losing out on a car that will be beneficial for us. The issues linked are trying to find a replacement soon as we will have to return the rental since the insurance company will no longer pay forit. Another linked issue is finding a vehicle within our price range so we don’t have to take out a car loan that will most likely yield high interest.
Issues that are not linked are the two different kinds of vehicles, the Jetta and the Cherokee. Our interest on purchasing this vehicle is to acquire a means of transportation and fulfill an urgent necessity with a tight budget, because right now we are renting a car, and our lease agreement is about to expire. We do not plan to renew the lease because it is getting too expensive for us; therefore, time pressure and monetary price are two important factors in our interest. To accomplish our goal of getting the transportation we need, we intend to spend a minimum of $3,500. 0, depending on the vehicle’s conditions; however, we are considering to pay for this car up to $4,100. 00 as settlement, with at least six month warranty from the seller, and if the negotiation fails, our best alternative(BETNA) will be to purchase a 1999 Jeep Grand Cherokee, listed for $3,800. 00; despite its high mileage, the Jeeps is a US made vehicle of low maintenance and easy fix, with a good reputation in the vehicle market. Our preferred settlement would ideally be to purchase the Jetta since it seems it would fit into what we need for our job at this time.
We are willing to trade off on possibly a couple of hundred dollars but we must see what the car needs, it could possiblly need new tires, brakes or other things where we could ask for some leeway to try to save ourselves some money. By calling and getting to know the seller of the Jetta we realize that the other person isn’t just trying to get rid of the car just for the sake of getting rid of it. They are selling this vehicle because they are in need of something else too. We are trying to access were they are coming from, but they aren’t giving us much to go on, other than they need to sell the car.
This party is required to be involved in this process, they are the ones selling the car and if we can get it for less than they are asking, then it will require them to negotiate with us. At this point, we don’t have too much information about other party; we just know they have a vehicle they are trying to sell and we assume it is in order to purchase a newer vehicle. The issues they have will probably be trying to get the most money out of the Jetta they are trying to sell while we try to lower their asking prices and come to a mutual understanding.
We feel that that priority for the seller is that they may have another vehicle in mind to purchase, or something that they need to purchase rather quickly and they will probably need to sell the Jetta as soon as possible in order to make the other purchase. Our Interest is to get the most reliable vehicle that will service our needs for the least amount of money and at this point we’ve had no past relationships, if we settle on this deal we’ll just need the title of the car signed over to us.
No further relationships are really needed but would be beneficial in case we have any issues with the car and questions may arise. We pretend to use collaborative strategy, because we believe that we may need the seller in the future, whenever our financial situation gets better; however, we don’t want to lose money either, we want both parties to make something and establish from this point on a relationship.
We believe that we could work together in the near future and this deal could come in to play in the future; however, we’re thinking that the other team may use a competitive strategy and try to make more money. Our research consisted of looking up the Kelly Blue Book Value on the car and getting an idea as to what the car is actually worth. We also wanted to see what the cost of the exhaust system since that component of the car means we will have to shell out more money soon, so we need to make sure that we get that out of the car cost to be able to pay for that expense in the future.
We feel the other party has their interest in mind, they ultimately want what they want for their vehicle, but if we could throw in some elements to get the cost down, we will do so. Our tactics at first was to just get a feel for where they were and the urgency in which they needed to get rid of their car. We added in the element of being a single mother of 4 children and getting to work to pay for their food, having a safe vehicle for them to be in and a vehicle that would not cost so much to use.
Our first negotiation took place face to face. We threw out the first offer and they countered, that is where our negotiations began. We had a few phone calls from the owner to meet up, but they failed due to other obligations. We decided communicating via email would be our best option. Since we knew we had another vehicle option we decided to start low and work them towards our goal. Getting the first offer out was critical to start the expectations. We started at $ 3,500,and gradually got higher.
Since we were trying to accommodate money for a trip and a car we provided them details that weren’t true and we ended up getting the vehicle for $4,700. 00, a few hundred dollars more than we hoped to pay. We were trying to get the car and still take our trip that was planned in advance. But, by having to spend a few hundred more for the Jetta then we originally planned it cost us our trip. We had to choose what was more important; our trip, or having a reliable car and having a reliable car in order to be able to go to work, live and function in life was the route we chose.