Six sentences that can help you save thousands of dollars a year

Talk isn’t cheap if you want to pay less on your loans and bills. Here’s how to negotiate big savings.

Speaking up with your banks, bill providers and other financial dealings can potentially produce thousands of dollars of savings each year.

At a time many households are struggling with soaring bills and interest rates, a few simple sentences may be all that’s needed to claw back some missing cash.

It starts with being in a strong negotiating position, and this comes from being a reliable customer with a good repayment history, says Beyond Bank’s general manager customer experience, Nick May.

“Banking has become more and more competitive with many new entrants and the same is true for utilities providers where competition for consumers is really intensifying, but the good news is this means the power of the savvy consumer is also increasing,” he says.

“Many organisations rely on customers shifting to reach their growth targets but at the same time retaining good customers will always be a key focus.”

HOMEWORK TIME

People who are notorious late bill payers or have little or no equity in their homes will find negotiating tougher, but there’s nothing to lose by asking.

“It’s definitely wise to prepare and do some homework prior to seeking a better deal,” May says.

Daniel and Leah Rensberg-Phillips with children Zali, 1, and Sia, 5. Picture Dean Martin

Insurance is a key area where policies automatically renew each year, often with a price increases that customers may not notice, while anyone who has not chased a lower rate on their mortgage lately is probably paying too much. The cost difference between the average and lowest home loan rates right now is more than $6000 a year.

Daniel Rensberg-Phillips and wife Leah shopped around for a better home loan deal when their five-year fixed rate mortgage expired.

“We recently spoke with our bank about a reduction in our standard variable rate home loan, and in doing so we were offered a significant discount from the standard rate,” he says.

“Like the saying goes, ‘if you don’t ask you don’t get!’. A simple question to your financial institution could save you thousands of dollars over the life of a loan.

“Ultimately in terms of a home loan, you are a customer who adds value and profits to your bank, and they don’t want to lose you to another institution.”

PREPARE A SCRIPT

Money coach Karen Eley says consumers have the power when there are competitors battling for their business.

“If you have all of your banking and insurance arrangements with one provider, you are potentially a higher-value customer than having your policies or accounts spread out over different companies, so this can work in your favour,” she says.

“Go into conversations prepared. Do your homework by looking at competitors’ offers, plans, rates and features. Mention you’re looking to go to a competitor and reviewing your options.

“If you don’t ask, you’re already getting a ‘no’ so it’s worthwhile investing 15 to 30 minutes of your time to make the call and ask, to find out what other options or offers are available.”

Eley says people can benefit working from a prepared script, and go into all phone calls and meetings armed with information comparing other better offers with their existing plan or deal.

“You can also seek help from a professional, such using a mortgage broker who is familiar with the details, costs, benefits of lending products and is well placed to negotiate and ask these questions for you,” she says. “Comparison websites like Canstar are helpful resources to start your research from.”

Money coach Karen Eley says enter money conversations well-prepared. Picture: Heidi Wolff

SIX SENTENCES TO TRY

1. “I’m disappointed with my current plan/policy/interest rate. Can you please connect me to your customer retention team?”

2. “What sort of offers can you give to loyal, longstanding customers?”

3. “I’ve done my research and discovered I can get a much better deal with your competitor. How can you beat them?”

4. “If you can’t offer me the same deal you give new customers, why should I remain with you?”

5. “I’ve been a devoted customer for many years and have paid your company more than $X in that time. What can you do for me?”

6. “If you can offer me this (better deal), I will continue to remain a loyal customer and it’s a win-win situation for both of us.”

Originally published as Six sentences that can help you save thousands of dollars a year