We are in the process of moving to a new house (hooray for a bigger yard!) and I have spent many hours on the phone setting up our new utilities and services.
The costs associated with moving add up quickly, so I’ve been using my favorite tactics to negotiate discounts and save some cash on things like cable service.
Here is my strategy for negotiating discounts on utility bills and services.
- Assume everything is negotiable. Whether it is trash pickup, phone service, or lawn service, there is usually the possibility of a discount. We can even shop around for electricity in our area. But you won’t get it unless you ask for it. Which leads us to #2…
- Call and ask for a discount. The worst the company can say is no. It’s easy to ask for a discount when you’re setting up new service. In fact, in my experience, I have always received a few dollars off monthly service just for asking.
- Decline their first offer. Their first offer is certainly not their best one. I will usually say something like, “well, that’s an improvement, but I was really hoping to get down to $X. Do you think you could arrange that?”
- Decide what you want. Do you want more features, free equipment, or a discount? Make sure you know this upfront. The cable company tried to woo me with practically free cable added on to my phone and internet bundle. But we are going to try life without cable for a while and I didn’t want to go back on that decision. So I pushed instead for a discount.
- No contracts for me. I almost never accept an offer that requires a contract. A contract will often include a built-in price increase and I want the flexibility to switch providers if necessary or ask for another discount when the first one expires.
- Shop around if possible. I was able to negotiate a lower rate and reduced fee on our new mortgage because I had talked to several banks. The bank I ended up choosing was willing to match another offer I had. Sweet!
- Don’t be afraid to end the call. If you’re not getting what you want, you can always tell them you’ll think about it and call back later.
What services can you negotiate?
- Cell phone (my pick for a $10 plan here)
- Trash pickup
- Lawn service
- Credit card rates (see this site for a list of cards with 0% interest)
- Electricity (by shopping around)
- Web hosting
- Mortgage interest rate (really!)
- Realtor commission
I even have neighbors who negotiated a reduction in their property tax!
The best discounts usually come from services like phone and cable or satellite.
The incremental cost for these companies to add you to their service is very low; most of their expenses are in infrastructure. So they can afford to give quite a bit more than the gas company, for instance.
That doesn’t mean they are going to offer a great deal willingly, but if you are persistent, you can push a lot farther.
Different types of discounts
- Pre-pay. We pay for our trash pickup a year at a time and receive one month free (that’s 8% right there!) We also got a free month when we started trash pickup.
- Consider bundled service, but don’t assume that will save you money. We currently have a phone / internet bundle with Verizon, but only because our internet cost would go way up if we didn’t use their phone service. Do the math for all the services separately and see if you will really save.
- One-time discounts on fees for installation and equipment. I got half off our cable install just for asking even though it wasn’t advertised.
- Free equipment. We never paid for any of our satellite equipment. Of course they knew we’d be hooked and stay subscribed for years.
- Downgrade your service. This isn’t really a discount but it might generate some serious savings. If you’re not filling up your trash can every week, see if they have a smaller one with a lower rate. Do you really need that high-bandwidth internet connection or would the basic option be fast enough?
How do you ask for a discount?
Try using some of my go-to phrases when negotiating discounts:
“That’s not quite going to work for me.”
“Is there anyone else who can help me get a better price?”
“I’m not interested in a bundle. How about half off of a new router?”
“Do you offer any discounts if I pay 6 months in advance?”
“I’d really like to have the ____ service but $X isn’t in my budget. Could you give it to me for $Y?”
Often the discounts you get will expire after a designated amount of time. I write mine the expiration dates in my planner so I am automatically reminded to call right up and ask for another one when it’s time.
Other tips for negotiating discounts
Evaluate coverage and options regularly (at least yearly).
Take notes and make sure you get the discounts promised. Ask for a confirmation number and the representative’s name to document what they offered you. You might have to follow up with another call if your bill doesn’t reflect what you expected.
Always be polite. The representative on the phone isn’t going to be helpful if you’re not being courteous yourself. Plus it’s just good manners. 🙂
Don’t allow them to talk you into more features for a “lower” price (unless you want more features).
Service companies want to keep your business. A current customer is much more valuable than a prospect. Use this to your advantage and you may be surprised at how much you can save.
Learnvest has more specific tips on negotiating a variety of expenses. If you really want to learn to be a great negotiator, check out Getting to Yes: Negotiating Agreement Without Giving In (affiliate link).
We always strive to live beneath our means and a reduced budget for utilities helps a lot.
I’ll be glad to use that extra cash, maybe for some furniture for our new front porch. I hope I can get negotiate a discount. Now I’m off to pack some more boxes!