The process of buying a new or used vehicle has a lot of moving parts. You have to haggle with car salespeople over price and negotiate with lenders for an auto loan — all while trying to strike a deal for your trade-in. Mistakes will cost you.
Salespeople practice these crafty skills daily, whereas the average car buyer purchases a car every five years or so. This isn’t a fair fight. You will likely face high-pressure sales pitches when you go to a dealership. So let me prepare you!
Some car salespeople use time as a tool. They’ll draw out the process until you’re exhausted. The salesperson is going to be there all day. So, if you plan on negotiating, don’t be afraid to set aside an entire day to spend at the dealership and bring something to occupy your time while you wait out the salesperson or sales manager to counter offer.
But you don’t have to go through the entire process in a single day. It is fine to take multiple days to make a decision.
Here are your strategies
When you go to the dealership, be ready to make a purchase. Don’t get held hostage. Say: “Give me your best out-the-door price.” Then, if the salesperson offers to go back and forth negotiating with their manager, tell them to text or email you the results.
Strategy: When you arrive at a dealership, immediately take control of the process by saying something like, “I’m here for a test drive. Tomorrow, I’ll come back and talk numbers.”
Some car salespeople receive extensive training in how to break down the needs and vulnerabilities of prospective customers. Their quick assessment of customers allows them to tap into scripted questions and lead the process to quickly close the sale.
Car salespeople are also very specifically trained in how to persuade people. Understand what you want, and how the salesman could take advantage of your weaknesses in negotiating.
One question you might hear is, “How much are you looking to spend per month?” If you announce that upfront, it may skew the process. It leaves you vulnerable. Insist on talking numbers after you test drive the vehicle and are in the process of signing paperwork.
It’s fine to have car salespeople help answer some questions, but remember that they may use information against you, including vanity, family needs or safety priorities, to upsell you on a more expensive car or options package.
Strategy: Break down the purchase and keep your trade separate. The process should been done in stages and focus on only one issue at a time. Start with the car you want, then move to price negotiation, and leave add-ons and trade-ins for a separate discussion.
What if the salesperson says that if you don’t buy the car today, you’ll miss the big sale, or someone else will come to look at the car? That’s a sales tactic known as the impending event.
People get more interested in having something that they know someone else wants or already has. Car salespeople can often use this ploy to take advantage of you.
Suppose you’re at the car dealership looking around and you pick out a particular vehicle and the salesman breaks the bad news to you, saying someone else already has a deposit on that car, or there’s a buyer who said they’d be back later today to pick it up. That’s usually followed by the invitation to put a down payment on it or buy it right now before they come back. They want you to spring for the purchase right then and there.
Remember, you can find that identical car elsewhere, whether at another dealership or on the internet. You can also simply buy something else.
Strategy: Look the salesperson in the eye and say, “Are you telling me that if I come back tomorrow, you can’t sell me the car?” In other words, your best defense is to simply walk away or at least be prepared to do so. There are others cars available.
The “Porcupine Close” is a strategy where the seller “sticks” the potential buyer with a question. It could be, “If I could get you this monthly payment, would that be what it takes to get you to buy this car today?” Or “If I can get this in midnight blue, would you be willing to buy this today?”
Strategy: Say “no.” Tell the salesperson you are shopping around with several dealers to find the best overall deal. Once you compare your offers, you plan to make a buying decision.
Then there's the “Ben Franklin close.” Here’s how it works: The salesperson draws a line down the middle of a piece of paper, listing reasons to buy the car on one side and reasons not to buy on the other side. This is a very common sales gimmick in the auto industry and elsewhere.
Instead, you want to focus on the numbers you care about during this tactic. This is your monthly payment, your down payment, and your auto loan’s length, interest rate, and overall cost.
Know what those numbers should be, according to your budget, before you go into the dealership, and make sure you stick to those numbers. And don’t forget the insurance costs which have increased quite considerably lately.
Strategy: The best way to defuse this tactic is to call out the salesperson by saying, “That’s the Ben Franklin close.” Doing so will likely create an awkward moment with the salesperson, but it will also prevent the tactic from continuing. It’s a very sharp move on your part
A good car salesperson will never ask yes or no questions because they don’t want to give you a chance to say no. You will be offered a choice between two things, like whether you would prefer a model in blue or red.
Strategy: Take a lesson from the political arena. Deflect the question by responding with a noncommittal answer, like you’re interested in a variety of colors, and then throw them off by switching to a different topic.
The finance manager is one of the most skilled people at the dealership. They will recommend that you pile on a bundle of extras that you don’t need. Because you’re spending a lot of money on the car, you may be encouraged to buy interior stain protection, anti-theft devices, rustproofing, and an extended warranty.
To ensure additional costs don’t add up, go line by line through your bill, looking for dealer fees you can negotiate down or avoid altogether. Some common ones to look out for are vehicle preparation fees, title fees, and gap insurance.
Strategy: Know what you want and need before going to the dealership and stick to your mission. You should ideally already have financing lined up, so constantly remind the finance manager that you have a set budget and you are not flexible.
Salesmen are usually under pressure to maximize the profits on each vehicle they sell to increase their commission, and this influences how they interact with you.
The more a car salesmen convinces you to pay for a vehicle, the more profit they make. Their commission may be as high as 25% of the vehicle’s final sales price.
In addition, the dealership management offers bonuses for selling cars that may have been sitting on the lot. There are still more bonuses from the car manufacturer, called holdback, for salesmen or the dealership when meeting a sales quota on a particular model year or vehicle model.
Understanding the most common tactics will help you stay confident during negotiation. But it’s not the only tool you have. Research multiple vehicles, know the value of your trade-in, and get financing before you go to the dealership. Check with a credit union for low rates.
You don’t need to be a pro. You just need to be firm on how much you’re willing to spend and what you really need. As I always say, knowledge is power.
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Lauren Fix, The Car Coach is a nationally recognized automotive expert, media guest, journalist, author, keynote speaker and television host. A trusted car expert, Lauren provides an insider’s perspective on a wide range of automotive topics and safety issues for both the auto industry and consumers. Her analysis is honest and straightforward.
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