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Person A wants to buy a car. He/she spots a high-quality used car on a dealer’s lot over the weekend. Although it is a great deal, he/she does not have quite
enough money to purchase. He decides to try a trade-in. The dealer will only give him $1,200 for his current vehicle. As mentioned, this a good deal, and
Person A knows the vehicle won’t sit on the lot for long. Person A decides to sell his/her vehicle on their own for around $2,000. The car is in good condition
with the exception of a few minor dents in the fender. The radio has also been cutting in and out, but still works for the most part.
Person A tells his/her co-worker (Person B) about his predicament. Person B actually is in the market for a used vehicle, as his/her daughter turns 16 next
week and needs a car fairly quickly. Person B offers to buy Person A’s vehicle for $1,700, accounting for the dents and stereo issues. The vehicle’s bluebook
price is $1,950, and its wholesale price is $1,200.
What power does Person A have?
What power does Person B have?
Describe the importance of time to both Person A and Person B.
What are some possible points of compromise?
Person A has the power of choice. He/she can choose to accept or decline Person B’s offer and explore other options, such as negotiating with the dealer for a higher trade-in price or selling the vehicle on their own.
Person B has the power of leverage due to his/her need of a car quickly; they are willing to pay more than market value in order to obtain it faster.
Time is important for both Person A and Person B because Person A needs to find a way to purchase the desired car before it is sold, and Person B needs a car for their daughter before she turns 16 next week.
Possible points of compromise would include: (1) Person A offering additional services such as detailing or maintenance in order to get closer to $2,000; (2) accepting payment from person B over time rather than one lump sum; (3) finding another buyer who offers an even better deal that both parties agree on; (4) splitting the difference between their offered prices at $1,850.