CFVG PROGRAM-TRUCK EXERCISE

Truck Buyer(s) Confidential Information No.

Buyer, an independent trucker, is about to negotiate with an independent Seller
for a 3-year old heavy duty refrigerated truck for transporting produce/food cross-
country.
Buyer needs immediate replacement for his/her broken truck. He/she has spent
two weeks looking for new or used equipment. If he/she delays any longer, Buyer
will lose a large contract which is worth about $22,000 a year profit. Buyer
estimates his/her daily loss at $300 a day.
Buyer has $55,000 available including all credit. $55,000 is absolutely the most
he/she can spend.
Seller’s truck is custom luxurious. Buyer really wants comfort because he/she
spends so much time on the road. Buyer’s last truck was very uncomfortable.
Most used trucks are not as nice. This truck has class and status.
The asking price is high ($56,000) compared to others, but the Seller’s truck is
mechanically perfect, cleaner inside, and has far less mileage than the others.
Buyer has looked around. There are no new trucks available for three months nor
are there any heavy duty refrigerated trucks available for immediate rental. Three
used trucks are available at $41,000, $44,000 and $45,000. Each has been
inspected and, while serviceable, are not as good as Seller’s truck. All three have
been driven about 125,000 miles.
Buyer has limited time (15-20 minutes) to make the deal or he/she is likely to lose
the big contract. He/she may decide to deadlock, but then his/her only chance of
saving the big contract is to buy one of the three used ones in the newspaper, if
they are still available. Buyer wants Seller’s classy truck badly.
Before you start, write down the most you will pay under pressure
$ .

Information Available to Both Parties

Negotiations start in 15-20 minutes. Start planning now.
Buyer has test driven Seller’s truck which has 35,000 miles on it and is in good
condition.
New heavy duty custom trucks are $75,000.
Used trucks seem to sell fast if priced right. Prices on three year old equipment
vary from $20,000 to $55,000 depending on condition and mileage.
Seller starts by asking for $56,000 for his/her truck.
The general economy is sluggish and trucking industry is slow.
Seller says that he/she wants to cash out and retire to another city 3 hours away.
Buyer says he/she has cash if the price is right.
FINAL OUTCOME $