17 Things Car Salesmen Don't Want You to Know
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.