Ex-Car Salesman Tells All: How to Beat the Auto Dealerships at Their Own Game
Be Prepared
Even if you deflect the sleaziest sales schemes dealers dish out, you can't get a good deal without some homework. Don't step into a showroom without reliability, safety, and pricing information (try Edmunds.com). You should know the mark-up of the car's sticker price and how much the dealer expects to profit. It makes it almost impossible for the dealers to bluff when you already see their cards.
Call First
Auto makers and dealers do everything in their power to make car buying an emotional experience. They have you sit in plush new leather, soak up new car smell, and punch the gas and hug the turns on the test drive. The salesmen hope, by the time you talk price, you want the car so badly you'll okay the first number thrown at you. But, ask for the dealer's best price over the phone, you axe their edge. Lucky enough to snag a telephone quote? It will almost always beat a quote from the showroom. But be warned: Good dealers will smooth talk you into making an "appointment" at the dealership without giving a price.
Hide Your Trade
If you plan to trade in your existing vehicle, don't let the dealership know it until you have agreed on the price of the new car. Tell them you definitely don't have a trade-in and then act like you changed your mind. The reason? Dealers use their profit margin on the new car price to make it seem like they are paying thousands of dollars more for your trade-in. Only when you handle the new car and the trade-in separately can you get good deals on both.
Talk Price, Not Payment
"Payment" is a car salesman's favorite word-and not just when it refers to his commission check. Dealerships love to quote cars in terms of the monthly payment, leaving the purchase price out of the equation until the papers are signed. In the negotiation process dealers try to lower the monthly payment by extending the loan term rather than cutting the purchase price.
Be Patient
Negotiations are tests of will-power. Who will cave first? Dealerships make you wait to get you dreaming about your new wheels. Why not bite back? Car salesmen's commissions are based on volume. They want to sell lots of cars fast. And unless you're shopping for a rare model, there will plenty of cars left tomorrow, but with every day that goes by the dealer will grow anxious wondering whether you changed your mind or found a better deal. Use time in your favor to get dealers to provide even more price concessions.
Go Rate Shopping
You wouldn't negotiate with car salesmen without the car's average price; you shouldn't negotiate an auto loan without information, either. If you can, get your credit report before buying a car. Then check a site like BankRate.com for average interest rates for borrowers with similar credit scores. Apply for an auto loan from your local bank or credit union and take the approval with you to the dealership. You may get an even better rate from the dealer. Worried about too many credit applications? True, multiple credit inquiries can negatively affect your credit score. The good news? Credit bureaus now count multiple inquiries within a month as one.
Don't Be Upsold
If you think the battle with the auto dealership is over once you sign the purchase and sales agreement, think again. The dealership will trap you in a small office for another hour or two while you finalize the paperwork, including financing. They'll also try to sell you a grab-bag of overpriced services like extended warranties, unnecessary insurance policies, and even virtually worthless add-ons like window etching and paint protection. Just say no to everything. If you must have something they offer, remember that it too is negotiable. Add-on services are almost 100% profit for the dealer, so you can often get them for less than half of their starting price.
Published by David Weliver
A former magazine journalist, David now works for a leading Internet marketing firm near Boston, MA. View profile
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16 Comments
Post a CommentLook, you palm a hundred dollar bill when you shake hands with the car salesman...This puts you in the power position and gets him salivating at a sale so he wont be watching you closely. He is thinking about spending the 100 dollar bill. Then you ask a few questions, comment on the weather and THEN expose the guy as being an illegal immigrant and say your gonna call 'La Migra'. You will get a GREAT deal out of all of this. This works all the time. You seen it on the internet, so it must be true, right?
As a consumer I am in the market right now for a new car and am feeling rather bullied and all around not good. The dealer didn't have the car I wanted so I didn't even get to test drive it. She took my credit card and not really realizing what was going on ordered the car in. So now basically I paid 600 dollars to test drive a car I may or may not like!! If I don't I think I am out of my 600 bucks even though I didn't sign a purchase agreement or say I was for sure going to buy the car. Sure I like it. Its a cute little car but I haven't even driven it!!!! So don't be like "we're so innocent" Yeah you've got to make money too but sometimes some people only care about the commision and not the customer.
So now what was supposed to be a fun happy experience has now become a freaking nightmare. The car comes in today and I finally get to test drive it and I'm petrified I'm not going to like it. I can't even think straight I'm so stressed out and to make it worse I'm 8 months pregnant!!
It's you're*, not your@ Jason Johnson.
I've been in the car industry for 3 years now and think this guy is ridiculous. Yes, dealers try to make money. Do you work for free? Because of people's paranoia and bad mouthing of the car industry, all dealers must be bad people and slick talking crooks? Most of us just want to help someone buy a car for a fair price and make a little money at the same time. Is it out of the question for me to be able to pay my bills go out everyone in a while and have some nice things? Once again do you work for free? So you must have been that toothless guy because if you don't look professional, know your product very well, and have some people skills you will likely only last a month too. Let me go to work at someone else's job for a month and I could make all kinds of assumptions about them and their job that would mean crap because I haven't done it long enough. By the way, most sales people are commission based. They may sell one car this week or ten with a variety of commissions, som
Fact is, it doesn't matter. Your still gonna wind up paying either/or.
Sure you can try that with the trade, but we don't HAVE to trade it in. We can give you a lot less for it, then if you would have showed it to us from the get go. Dude, we do this everday. Do you think for a mintue we dont know every trick in the book? Trust me, you have no secrets of getting us. and you never will. You know why? Because there is no Secrets. Only peoples paranoia.
Give me ONE good reason why I should give a customer a Price over the phone? For one, price doesn't matter. They haven't driven that particular car. So why worry about price? Then they're just going to call the next dealership and the next, and the next so they can all knock $50's off. I have 1000's of reasons why you shouldn't give prices over the phone. I can't come up with one good reason why you should. With your kind of thinking, I see why you didn't make it in the biz. You have no idea what your doing. Your lost. You cant handle car sales. You just dont know how.
HAHA. Yes, tell people to search Edmunds. Thats fine with me. Hope you know that Edmunds is actually $2,000-$4,000 more Retail on some cars than Kelley Blue Book and NADA, which is who MOST dealers and banks use. Not Edmunds, lol.
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