17 Things Car Salesmen Don't Want You to Know

by Paul Michael on 13 March 2013 12 comments

Regular readers of the content aggregator Reddit.com may have seen a post recently asking car salesmen to confess their greatest fears.

The response was overwhelming; over 7,500 comments were posted. As I read through the list (it took hours!) I jotted down some recurring themes. From those notes I have identified car salesmen's 17 greatest fears and weaknesses. (See also: Guide to Buying a Used Car Without Going Crazy)

If you're in the market for a new or used car anytime soon, this list could save you a lot of money. (By the way, I use "salesman" and "salesmen" but this obviously refers to both men and women in the auto sales force.)

1. Your Smartphone Is Your Most Powerful Weapon

Years ago, car dealerships and their sales force held all the cards, and buyers held very few. But that has changed completely. Now, with information and sites like Edmunds.com's True Market Value (TMV), Autotrader, eBay Motors, and access to car experts in the palm of your hand, you have effectively marginalized the car salesman. You know what they paid for the car, what their mark up is, when they bought it, what their bottom line is, everything. You can, in essence, make haggling a thing of the past. However, if you leave your phone at home, then you better have a terrific memory and be able stick by your guns. Proof is power.

2. You Can Win the Game Before Setting Foot on a Lot

The Internet has done wonders for the humble consumer. With it, you can email 20 dealers within a 50 mile radius, tell them what you're looking for, and ask them to send you back a quote. From those quotes, pick the lowest couple and take those to any dealership you want. They'll usually be forced to match it, destroying whatever profit margin they were hoping for. And before you feel too bad, the dealerships get massive bonuses by hitting certain sales targets. They can give you the car at cost and still walk away with a nice pile of cash.

3. Be Wary of Salesmen Who Leave to Let You "Talk it Over"

I actually had this happen to a friend of mine, and I laughed when I saw it come up in the comments.

If you somehow manage to get stuck in the salesman's office haggling over numbers, he may receive a call and leave to let you and your partner "talk it over." This is an old trick that some dealers use to listen in on your conversation, letting them know instantly just what your bottom line is. If it happens, whispers or text messages to each other may be a good way to combat eaves dropping.

4. You Are Being Screwed on Your Trade In

If the car you're trading in is in good condition, you won't be getting a good deal on it.

Sure, you're armed with the Kelley Blue Book (KBB) trade-in price and resale price, but those numbers are hogwash. Dealers use something called the National Automobile Dealers Association (NADA) database, which gives them a much more realistic idea of what they can get for your trade. Some of the salesmen reported KBB values that undervalued cars by $5,000 or more. Your best bet is to get a copy of the NADA value for your car. Or, if you can, sell it privately instead.

5. There Are Mark-Ups Aplenty on the Sales Stickers

Dealerships refer to them as "bumper stickers" because that's where they bump up the price of the car. Little extras like VIN etching, fabric protectants, sealants, and other "must have" additions can all be done by you at home, usually for way less. Ask to see the original invoice, and compare it to the bumper sticker. That's what you really want to look at. If they refuse, go elsewhere. And even then, the invoice doesn't tell the whole story. See fear number 10, below.

6. You Have the Power to Control the Sale

Those two things below your waist, called legs, are a sales weapon.

If at any time you don't feel good about the sale, you can walk away. Often, the salesman will hit you with a much lower offer when you get up out of your seat and tell them you've decided against it. Remember, they can't do the deal without you, and you are always in a position to say, "NO." You lose nothing but a few hours of your time; they lose a commission and a bonus.

7. The Dealership's Extended Warranties Are for Suckers

Even if you get the salesman to agree to a price that is basically what the dealership paid for the car, you still have to go to that back room; the room where the deal is sealed.

Whether you lease, finance it, or plonk down a wad of cash, they'll try to push every single option they can on you. That includes an extended warranty that you can buy way cheaper from someone else. The dealership makes a lot of money on these service contracts. Don't fall for this. As one of the salesmen pointed out, the finance manager is actually a salesman, too. They're going to do whatever they can to squeeze more money out of you before you leave.

8. The Four Square Is Designed to Manipulate You

There have been many, many negative articles written on the four square worksheet, and with good reason.

The four square sheet is a way for the salesman to "play" with the numbers and make you think you're getting a great deal. Usually, the first time they come to the table with it, the numbers are so insulting you'll want to walk out. That's intentional. They can't look like miracle workers if they give you a reasonable price. And then the numbers game is played out, but the price of the car rarely goes down more than a few bucks. However, there's a better way to show just how this is used to trap you into a price you really don't want to pay. Read this article, written by car salesmen FOR car salesmen. It's quite an eye opener. And as one redditor advised, tell them not to bring out the four square worksheet or you're leaving. That puts you in a position of power, and they'll know you're no sucker.

9. Salesmen Have Ways to Mess With Your Head

You drive into a dealership with your trade in. The salesman looks it over, nodding, giving the usual chit chat. But he'll ask things like "does it have power steering?" or "does it have a sunroof?" He already knows the answer. He knows the spec of the car and what it's worth. He just wants you to say NO a lot. And by saying no over and over, you start to devalue your trade in, and expect less for it. Get the NADA value, and whatever he asks you, just keep that number in your head.

Another method is taking the keys from your trade in before you sit down at the negotiation table. It's a lot harder to walk away when you don't have your keys on you. They know this, and will often give the keys to a third party, like their sales manager. Now, they have to hunt him down before you can get your keys, and that will take a while. Long enough for them to have another crack at you.

10. Never Offer to Pay Invoice for Your Vehicle

You hear people say it all the time. "I'm paying invoice for that car, not a cent more." Well, go ahead, it's better than paying the MSRP. But very few people will pay MSRP anyway. And the invoice price of the car is not telling you the whole story. The dealership gets dealer holdbacks, customer rebates, and factory-to-dealer incentives. This is money they can take off the sales price and offer to you, but they won't just hand it over without a fight. These incentives are usually not even advertised, but they can save you thousands.

11. Never Talk About Your Down Payment Up Front

The salesman will ask early on "how much are you going to put down?" It seems like a reasonable question, but you're giving up a bargaining chip way too early. One story talks about an old man who had $10,000 to put down on a truck, and the dealership basically upped the price of the truck to offset that down payment. In effect, the old man threw it away. Wait until you know the "Out the Door" price of the vehicle before you talk about a down payment.

12. Monthly Payments Are Deceptive

You should have a figure in your head of what you can afford to pay for the car, NOT for the monthly payment. The reason is simple. A dealership can mess with the figures, the length of the loan, and the APR, and reduce your monthly payment, but you could end up paying even more for the car than you first agreed to. Look at the final cost, and only the final cost. If your monthly price for that is too high, you're spending more than you want to.

13. Hail-Damaged "Bargains" Are Marked Way Too High

If the cars at the dealership get hail damage, they're going to mark them down and sell them to you at a discount. Great, a bargain, if you don't mind the dents. But the dealership has insurance policies on the cars on the lot, and they've already been reimbursed for that damage. The dealership is not passing all of that on to you, so you're generating some nice profit for them.

14. Non-Factory After-Market Options Are a Huge Rip Off

Many dealers will add "extras" to the car that cost them pennies on the dollar. Pin striping, rims, spoilers, stereo systems, alarms, you name it, they'll throw it in.

Negotiate from the invoice price, not the padded sticker price. You don't need to pay $250 for a few bucks worth of pin striping. You don't need floor mats that cost $200. If it's non-factory, ask for it to be taken off. All of it. Do it yourself, or get a trusted mechanic to do it. And you can also get your tinting and clear bras done elsewhere for around HALF the price the dealership will charge.

15. You Get the Best Deal From the Internet Salesman

This was the one point that kept coming up over and over.

When you go through the Internet sales department, the dealership already knows that you know certain things. They know you're a savvy shopper, that you're looking around, and that you're comparing prices. The Internet salesman will start at a much lower price than the salesman on the lot. In short — don't walk onto the lot unless you're going in to meet the salesman you've been dealing with online.

16. Get Your Own Financing Before You Buy

You can negotiate way better terms in advance, with a credit union or another financial institution. Don't leave it up to the dealership; get this all pre-approved before you walk in.

17. You Can Cancel Those Service Contracts Within 30 Days

So you get caught up in the financial meltdown and agree to pay for a lot of extras, including the extended warranty, tire protection, and so on. Well, you are not stuck with them. You can cancel within 30 days and get your money back. You can also use this to your advantage. Agree to the service contracts if you get money taken off the price of the car. The dealership makes way more from the service plans than the car anyway, so they'll be happy to make the deal. When you cancel, you're in the money.

There were many more tips in the reddit.com thread, which I urge you to read. And remember, these all came from people who make a living selling cars. This is straight from the source, and well worth remembering.

Are you a car salesman with more information to share? Let us know in comments below.

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Guest's picture
Not Sure

It's a shame that you have to be middle-aged before you get to be an expert on buying cars. Salesmen don't mess with me anywhere near as much as they did 20-30 years ago, and I'm sure it has more to do with the lines on my face and general lack of hair on top of my head more than a general reform of automobile sales practices. Meanwhile, this should be required reading for anyone under, uh, 40 who is about to go through the ordeal of buying a new car.

In particular, I usually do #2 before setting forth. I found a really good deal on my current car that way and brought printouts just in case.

We have a special way of dealing with #3. Do all your conferencing in some language other than English. German works for us, and my German is sufficiently bad (and my wife's English sufficiently flawless) to give the salesman the clear impression that we're not doing it because we just came off the boat yesterday.

The best way to avoid situation #4 and #9 is to only bring in trades that are barely running. If the car is a jalopy to begin with, there isn't very much the salesman can do to knock you down from the $500 it's probably worth. In fact, you usually get offered more than that $500 in the hopes that it will make you so happy you'll not notice the other ways you're being hosed.

As for #5, #7, #14, imagine you're two years old. What's the easiest word that comes out of your mouth (other than "mine")? It's "no." Say it often, and with authority. I usually say, "I just want the car. That's it." Do that, and you'll never have to do #17. Note this also applies to tires and large appliances.

#16 is a given. The credit union is right next door to the car dealers. First I get my loan pre-approved, then I go shopping. That also takes care of #8, #11, and #12.

Guest's picture
Raul Laurence

In Oregon it is state law that if you as the customer can provide a salesman with physical proof of a set sales price, so an advertised price on say a website or newspaper. The salesman is required to sell at that set price and cannot heckle you for a higher rate.

Guest's picture
Guest

It's because of postings like this that people get screwed every single day. Dealers don't get extra cash if they hit a certain number. I worked in Dealerships that sell 400 cars per month. Also you talk about doing your homework, why would a dealer pay to advertise a car $35000 but somehow you think that you should offer $30000. Trade values, if you go to KBB and price out your car 100 times it will come back with the exact same number 100 times however its safe to say that not every car is in the same condition. Also the market changes on some of these cars daily. Just last month is was buying cars off lease at $39000 now 30 days later I can buy the same car for $31000.

Yes there is many dealerships that play games and take advantage of people but that isn't the majority. I'm yet to come across any sites that actually understand the car business and give consumers the right advise.

Let me start by just being nice and if the people at the dealership are nice back to you just leave and take your business somewhere where they will value you and appreciate you.

But for starters stopping reading posts like this because this is just someone that has probably never worked in a dealership and he or she did they are the dirtbags that they are complaining about.

PC

Guest's picture

I completely agree that your smartphone can be your most powerful weapon in negotiation. I remember buying a dishwasher and getting a discount because I pulled out my smartphone and found the appliance online for less. I think I saved $100 or $200.

Important stuff to know! Thanks so much!

Guest's picture
genie

This article does not apply to any legit, honest car dealer. Most big dealerships hire and train people that know nothing about the car business, therefore they are trained to make the most profit and not to educate and help the customer. Btw four square is for suckers (the movie). Any dealership using four square should not be in business. Please dont make all dealers look bad with one article.

Guest's picture
Beckybeq

Bought my first (and last) new car in 2002 - last because I'm still driving it. Loved the salesperson, paid $100 more than my target price (which I had figured out ahead of time) and have had a very happy 11 years with my car. But my husband will NOT buy a car or truck without the extended warranty. Finally decided it was worth it to keep him happy, and we ended up getting almost exactly our $ out of it when the air conditioning blew up around 95,000 miles.

Last time I went looking for a car while my husband was very ill. Darn salesperson wouldn't even talk to me because I was there without my husband. Gave him and his manager, and later the owner an earful on that.

Guest's picture
Guest

Why go through this mess?They have much more sales experience than you do.You can't win this fight.I and my cheapskate relatives have found the BEST way to buy a car cheap.You,first,figure out what car you want.Then you watch the ads in the newspaper for the loss leader,one only, deals.You get to the dealer early and buy that car.You may not get the exact color or features,but you get a great deal,without all the hassles.You don't do finance,pay cash.You don't trade in a vehicle,sell it elsewhere.You don't buy any extras or warranties.You keep it real simple and no opportunity for the dealer to add anything.

Guest's picture
Lance Bell

I am reading this, and the one thing that keep popping into my head is that "some it is true, but it make the client its own worst emeny." Now there are some clients that like to play the race to the bottom. However, as an example with tades, the article states "Dealers use something called the National Automobile Dealers Association (NADA) database, which gives them a much more realistic idea of what they can get for your trade." I call BS on that! Yes there are some Dealerships that still use that. However a auction price is a real figure for a trade in and most people who use the internet researching their trade-in knows that.

Another thing is the "Never Offer to Pay Invoice for Your Vehicle" line. I have a huge issue with this. For some dealerships, this is the only way they make money. Somethines depending how the dealership is set up, they lose money depending on the salesperson commission. This trains people to start from invoice minus holdback. This article is telling people that us, as salespeople can make a living and we work for free and I do not like that!

Guest's picture
Guest

I ALWAYS start at invoice minus Holdback. If i offer this to 100 dealers, 1 will bite. I could care less about the dealer's well being

Guest's picture

Any TruePro-fessional car sales person has no fear from any of these. Garbage that perpetuates a false stereotype. 30 years... 3 generations of customers.. all of them happy in the extreme. CWDarling.

Guest's picture
Guest

I am a car dealer. My name is Jared and I'm 22 years old. I am the youngest dealer currently in the state and have been for 4 years now. I don't want to give the wrong impression, I had much help from my father. He himself started his own dealership at 21, and did very well for himself. He would tell me stories of the 70's and 80's and how car sales were so different back then. From what it sounds like, car salesmen back then were pretty much exactly how you discribe them in this article.

Times have changed my friends. As stated so kindly above, we have smartphones, computers, online local listings for "private party" ads that can be filtered instead of thumbing the newspaper. We have technology folks, and let me tell you the secret to finding a "good" car salesmen.

Honesty. The reason I have made it and am growing in these last 4 years is plainly that; honesty. I embrace the fact everyone has access to this information! Makes it easy on me. At the auction when I'm buying cars and have a mobile app that scans the vins barcode, instantly showing me kkb, nada, and wholesale value. Not to mention carfax and other history reports on the vechicle. I know exactly what I should pay for something while the "I have been doing this since before you were born" are still thumbing their Kelly blue books.
PS- side note, all that bollochs about dealers using some sercret booking system for trades call "nada" is totally ridiculous. That's available to everyone and gives even less value than kkb. If there's a secret "book" it's called "black book" but even so the values of cars change literally every week so it's honestly pointless. What I do for my customers, walk out with them scan the vin and see REAL numbers, auction valves from the previous week. But be realistic, if your car is junk then don't think it's worth high book.

I'll wrap this up. How have I made it work and am the go to dealer locally. Honesty. You all are so wired and scared you are being ripped off by reading and hearing thing of this sort you refuse to use your brain and make your own damn decision what the car is worth to you! For example...

You come back from a test drive and you want the car. The salesmen comes out and says how'd it drive? You say great, then, "what's the BEST DEAL you can do" the honest salesmen replies, 22,000. And you know this is a good deal because you did your research and the car books at 28,000 clean retail. You haggle him again, "we'll ill buy it for 20,000" the salesmen replies, 22,000 is the best deal I can do? I paid 20 for it... You leave because he wouldn't come down again. He sells the car to the next customer.

Later that day from a new car store you are push into a car you didn't want, and you payed to much for. It sounded like a better deal because he lowered the price a whopping 8 times! Holy cow what a steal. Not. Wake up and be smart. If you want to be treated with respect then show some! If a salesmen tells you the bottom dollar and it is reasonably under the book value I promise he doesn't have anywhere else to go! That's it. Don't counter back at a ball busting 2k under his BOTTOM dollar you just asking for. It's the people like that who make sales mind games. Just be honest and be smart. If its a good deal to YOU then it is.

Guest's picture
Guest

You make salesmen sound vile and heart less. If you knew anything about the industry or the job role, I bet you would retract everything you said.