When it comes to negotiating, most of you think the new car dealer is the expert, and that he or she has the upper hand when you purchase a new vehicle.

Not really.

As a consumer, you give us way too much credit in this area. In actual fact, YOU control the process. We know that you can get up and leave the dealership at any given moment.

When you first walk into a showroom, what is your objective? Is it to get the lowest possible price, no matter what? Or is it (that you want) to be completely satisfied that you received the best value for the dollars you paid?

What?s most important to you? Do you consider the convenience of location when you need to have your vehicle serviced? Do you require shuttle or loaner services? Do you need specific hours of operation? Does an ongoing positive relationship with the dealership and its personnel rank high on your list?

You?ve told us that a positive purchase or service experience is what you want ? and have come to expect. We know you need a quick response to your maintenance needs and that you also want us to look after the automotive needs of your family and friends, should you recommend us to them. You also want us to go to bat for you, or at least be a liaison with the manufacturer, if product or warranty concerns arise.

In the past, customers would spend a great amount of time even for the smallest of savings. Today however, many consumers are telling us that they?re prepared to spend a little more money if it means saving time. After all, time IS money.

I sometimes cringe when I read articles written about negotiation. Often the writer has not even experienced the selling process. This past spring, one assistant automotive newspaper editor wrote about his perception of the ?negotiation? process. (Please note that this individual commented that he hadn?t purchased a new vehicle in over 18 years.) He said: ?I can picture the buying process all too well . . . the airless little office . . . the smooth sales rep trying to gouge the depth of your ignorance . . . the avalanche of numbers, possibilities, jargon.? These statements come from someone who has not bought a new vehicle in almost two decades. He also stated that he does not want to invest major time and energy into purchasing one. Excuse me? PLEASE, give us a break! - Today?s new car dealers run very sophisticated retail businesses.

What does anyone expect to get out of any purchasing process if they go in unprepared? You should know exactly what your priorities are before setting foot in the dealership, and be prepared to invest the necessary amount of time.

One important fact you should know before initiating any negotiation is that the manufacturer actually sets the margins for new car dealers ? usually between 8-12%. This margin is the difference between our cost price and the manufacturer?s suggested retail price. But in reality, the average transaction price, after customer negotiations, usually settles within a margin of 6-8%.

The length of time some consumers spend trying to determine what we pay the manufacturer for any given vehicle (our invoice cost) truly amazes me. The bottom line (here) is that no matter how hard you try, there?s still a threshold that we cannot sell below.

Please remember that from this 6-8% gross margin, we still have to pay our sales professionals? commissions, our managers? salaries, advertising, insurance, and interest on our vehicles. Not to mention the allocation of our fixed costs such as rent and operating costs. I?m not whining (well, maybe a little), I?m just commenting on some of the realities of our business. Ultimately, YOU control what you?re prepared to pay. We control the acceptance of ?your? offer.

We also know that most customers will shop around and compare our prices. So we know we have to be competitive. As in most businesses, supply, demand and the competition within the GTA are ultimately the controlling factors in the final transaction price.

Another factor you should remember is that if the vehicle you want is readily available from the manufacturer, we?ll be more receptive to a smaller margin (because we can usually count on higher volumes of that vehicle being sold).

On the other hand, if the product?s availability is limited, the reverse could apply.

Your shopping experience does not, and should not, be adversarial or confrontational. Believe me, we feel good when we know you feel good. We want to see you return. It just makes good business sense.

Next week I?ll share with you some practical negotiating tools that could help you receive the best value for the price you pay.

Until next week, remember: YOU are in the driver?s seat!