Consumers seem happy to haggle in foreign countries for knick-knacks and knock-offs, but real deals can be found right here on Australian soil. If you’re paying the sticker-price, you’re paying too much. Absolutely everything is up for negotiation – all you have to do is ask.
1. Mortgage rates and fees
Why it’s possible: Competition between banks and non-banks slowed during the GFC, but it didn’t die altogether. During the crisis, the major banks aggressively competed with each other for a bigger slice of the mortgage pie and in recent months, many non-banks lenders have returned to the market. The government’s plan to cut exit fees, which should come into effect in the second half of 2011, is also designed to make it easier for borrowers to “shop around”.
How to do it: If you already have a mortgage, your lender will be keen to hold onto your business, especially if you have an excellent credit rating and hold other related-products, such as credit cards and insurance. Speaking with your mortgage broker or branch lender could result in a better rate. If you’re a first-time buyer, it pays to shop around and compare. Again, a mortgage broker or loan negotiator could help you secure a better than advertised rate, or a reduction in certain fees such as the upfronts, application or origination fees.
2. Credit card rates
Why it’s possible: The increasing number of zero or low-balance transfer cards on the market is giving consumers a little more bargaining power when it comes to their credit card provider.
How to do it: If you’re considering switching your balance to another company, give your provider a call first and see what kind of offer they are willing to make in order to keep you as a customer. They might offer a cheaper interest rate, or waive your annual fee.
Call the helpline on the back of the card and ask to speak to a supervisor right away, as customer service representatives rarely have the power to negotiate with you.
Why it’s possible: Landlords know the value of a good tenant. While it’s difficult to negotiate paying less after you’ve been renting for a length of time, it is possible to negotiate on rental increases. If you’ve been paying rent on time, have good relations with the neighbours and have taken good care of the property, then it’s in your landlord’s best interest to keep you as a tenant. The threat of covering full mortgage repayments on a vacant investment property – even for a short time – could be enough to convince your landlord to negotiate reasonable rental terms with you.
How to do it: Talk to the property manager. Tenants must be given 64 days notice before rental increases come into effect, so the best time to act is in this window. It pays to do a little research with your neighbours. You can either ask them directly what they’re paying in rent, or look online to find out what similar properties are going for in the neighbourhood.
Why it’s possible: It comes down to relationship. If you are looking to buy insurance from a provider you already have a relationship with, they’ll be more inclined to give you a good deal.
How to do it: Before you approach the provider, compare premiums online. Then call the provider and bargain using the information you have on other companies. The difference between insurance providers is significant – you can save up to 40% just by shopping around.
Why it’s possible: Most hotels would rather rent a room at a cheaper rate, than leave it empty earning no money whatsoever.
How to do it: If you’re flexible and spontaneous there are great deals on www.wotif.com or www.lastminute.com.au. If you’re already on the road and rock up to the front desk in late afternoon, simply tell them that you’re not prepared to pay the full price, but would consider staying if a cheaper rate can be arranged. If they’re not willing to come down in price, ask if any extras could be included such as a lower room tariff, free breakfast, free parking, a welcome drink or bottle of wine, discounts to nearby attractions, or freebies for the kids.
Why it’s possible: With cars, almost everyone knows that the sticker-price is more of “starting price” than a firm quote. Stiff competition and volume bonuses for salespeople, have helped create high-pressure sales environments in car dealerships, but smart buyers can find excellent value.
How to do it: Decide on the model of car you’re looking for before you go. Expect to pay somewhere between the sticker price and the invoice price (the price the dealer paid for the car). You can find out the invoice price by asking the dealer, or by checking out www.redbook.com.au. Visit at least three dealerships – starting at the location furthest away from you. Sometimes salespeople will be more desperate to make a deal at the end of the month in order to meet sales targets and receive a volume bonus. From July to October, car dealerships are usually looking to make space for new models and December can be a great time of year to buy as everyone else is looking for Christmas presents.
In addition to negotiating a lower price, don’t forget to ask about extras – car mats, high spec paint, seat covers, to name a few.
7. Home appliances/electronics
Why it’s possible: While some are taking advantage of the high Australian dollar to buy goods cheaply online from foreign retailers, others are cutting back on spending altogether. As a result retailers have been doing it tough. But if you’re in the market to purchase some big ticket items, you could be in luck. Store managers and owners realize that a discounted deal is better than no deal at all.
How to do it: Visit the store at times when the manager is most likely working – early morning or afternoon. You are more likely to get a deal during the week, as the manager might be more inclined to talk discounts if fewer other customers are within earshot, lest he have to offer the same price to them as well. Expect a discount of about 10%, as profit margins tend to be lower on these items. However, it is often possible to get extras, or free delivery. Bing Lee is well known for negotiating its prices, and buyers are even able to do it online if they lack the chutzpah to do in person. Other retailers that have been known to offer discounts include: JB Hi-Fi, Good Guys, Myer and Harvey Norman. David Jones will to price-match, if you can provide proof from another retailer.
Why it’s possible: There is a huge mark-up on jewelry and most retailers have some built-in wiggle-room when it comes to price.
How to do it: Consumers might have better luck haggling in boutique shops, but even larger retailers will usually come down if you ask them for their “best” price. Expect about 30% off the sticker.
Why it’s possible: With the advent of group discount sites such as Cudo, Spreets, Living Social and Jump On It, you should never again have to pay full price for a massage, body wax, haircut, or any other beauty treatment.
How to do it: Just sign-up with your e-mail address to receive information on deals which are posted daily. No haggling required!
10. Cash exchanges
Why it’s possible: You can change your foreign dollars at a bank or a cash exchange booth. Some are commission-free, but the exchange rate is slightly worse. Others charge a commission on a per-item basis on each transaction, or on a percentage basis. While banks generally offer better rates, some cash exchange booths will match their rates. Be wary of black market exchanges though as you could end up with counterfeit currency.
How to do it: Look for the posted exchange rates at the bank and then approach currency exchange bureaus nearby. Currency exchange booths should at least match the bank rate, or even give you a slightly better deal.
Tips on haggling:
Ask: If you don’t ask, you don’t receive.
Be polite: You don’t have to sweet-talk, smooth-talk or fast-talk anyone into giving you a good deal. You just have to be polite and ask them for their best price.
Don’t waste their time: Establish yourself as a serious buyer and salespeople will be more inclined to strike a better deal with you
Do your research: It helps to research prices online to get an idea of what different providers are offering.
Talk to the right person: Don’t waste your time trying to bargain with someone who isn’t in a position to help you. Speak to the manager.
Timing is everything: Ask for discounts when the manager is most likely working and the store is not busy
Extras: If you are unable to get a discount, ask about extras.
Walk: If you’re not getting a positive response, take your money elsewhere.
It can be confusing to know whether to get a variable rate or fixed rate mortgage, and what features are important. That's why it's important to not only check the right rates, but make sure that you're getting the right features in your home loan. Get help choosing the right home loan