What’s the Best You Can Do?
Everything can be had for a price — and more often than you’d think, it’s less than what the price tag says. You probably expect to haggle a bit when purchasing a car or a garage sale item, but did you know it’s possible to keep more of your hard-earned cash by showing off your negotiation skills on a regular basis?
“Everything is negotiable, or at least it’s worth a try,” says Jeff Yeager, self-proclaimed “ultimate cheapskate” and author of several books including “How to Retire the Cheapskate Way.” “As Americans, we’re very sheepish about negotiating, but if you approach it in a positive, polite fashion and ask nicely, a lot of times you will get a discount.”
Here’s how to negotiate a better price on six popular purchases.
When you hire a professional services firm, such as an attorney or accountant, their rates are rarely set in stone, Yeagar says. “In this economy, there’s nothing wrong with telling someone you want to do business with them but you simply can’t afford what they’re asking,” he says. “You’re not trying to say they’re not worth it, you’re just saying, ‘Here’s what I can afford.’”
If you want to save money on accountants’ fees, avoid hiring them during tax season. David Bakke of MoneyCrashers.com recommends figuring out exactly what you need from an accountant and then asking for a price based only on those services. For instance, if you only need someone to represent you before the IRS in the case of an audit, you may be able to use an enrolled agent rather than a CPA, which can be less expensive. If you have complete records, you may not need a CPA for your taxes; you can save money by hiring a tax accountant instead. “To actually negotiate with an accountant, get all of your tax records prepared as much as possible, get through the tax filing process as best you can, then contact an accountant with your specific questions in order to save cash,” Bakke says.
To save money on legal services, try negotiating both the hourly rate and the settlement fee for lawsuits. Bakke recommends getting quotes from three and using the information gathered to negotiate a lower price with your preferred attorney. While the amount you can save will depend on the lawyer, Bakke warns: “Don’t look for a discount on a divorce attorney in January. That’s the month when people file for divorce the most.”
Subscriptions and Service Plans
Any service you pay for on a monthly or annual basis is negotiable, Yeagar says. If your annual magazine subscription, pest control service, smartphone plan or satellite radio service is nearing renewal, call the company a month or two in advance and ask if they can help you save money. “Suggest nicely that if they can’t, you’ll consider taking your business somewhere else,” Yeager says. “Don’t threaten something you’re not prepared to do, but realize that they don’t want to lose you.”
Most magazines, for instance, make their money through advertisers rather than subscribers, Yeager says. But because their advertising rates are based on the number of subscribers they have, they will often make concessions to keep current subscribers rather than spend money to get new ones.
Credit Card and Bank Fees
Credit card interest rates may not be negotiable, but “there are ways to get certain fees waived,” Bakke says. “For example, if you have a stellar payment history and simply forget to make a timely payment one month, call in and explain what happened. Mention your excellent track record and you can usually get the late fee, and even the interest, waived.”
Many banks have started charging new fees over the past few years, but you can often negotiate your way out of paying them. “Banking is a competitive business, so the threat of taking your business somewhere else can make a difference,” Yeager says. “Sometimes just mentioning to the teller that you don’t want to pay a particular fee is all it takes. The bank doesn’t want to lose your business over a $10 service fee.”
With any luxury item, retailers’ margins are extremely high, so there’s almost always room to negotiate. With jewelry in particular, the retailer’s markup can be 100 percent or more, says Bakke. “The amount you can save really depends on your ability to negotiate and willingness to walk away, but you can generally get at least a 30 percent discount,” Bakke says.
To get the best price, shop at slower times of the year — not, for instance, at Christmastime when sales are strong and jewelry sellers have little motivation to reduce prices. Also, offer to pay cash rather than using a credit card. Especially for smaller, mom-and-pop stores, the ability to make a sale without paying a fee to the credit card company can be attractive, Yeagar says.
Medical equipment and visits to doctors, dentists, therapists and other health care professionals are also negotiable, according to Yeager. That can be especially helpful for people who are between insurance plans or without health insurance.
“It never hurts to ask,” Yeager says. “If you’re uninsured, tell them upfront and ask what price they can do. Doctors have agreed to treat patients who have insurance for less, so at least ask if they can lower their rates to what they get paid by the insurance companies.”
Also, after you receive a bill from a health care provider or hospital, call and ask to discuss the items included, especially if you’re unsure what the fees are for — and ask for discounts. “Some of the people who put the statements together don’t even understand them, so there’s nothing wrong with asking for explanation,” Yeager says.
When you need to hire a plumber, electrician, remodeler or other home service person, careful negotiation can often get you the best price. Similar to the strategy for getting the best deal on professional services, Yeager recommends getting multiple bids for the work you need, and choose the provider you’d most like to work with. “Share with him the lowest bid and ask what he can do to come closer to that price,” Yeager says.
To “sweeten the deal,” offer to allow the contractor to schedule your work around his other projects, Yeager adds. And if you have other potential jobs coming up for which you may be able to use his services again, let him know.