8 Things Car Salespeople Don’t Want You to Know
By Aaron Crowe
Researching new car prices online is easy when you want to buy a car. The hard part is negotiating the best deal.
There are some tricks of the trade that car salespeople know work better than others. We rounded up some of those tips from salespeople and people who buy a lot of cars, and offer eight car buying tips that could help you get a better deal than you expected:
1. Don’t buy based on the monthly payment. This is the most common “trick” dealers use to try to get a higher selling price based on the monthly payment rather than the vehicle’s sale price, says Rob Drury, executive director of the Association of Christian Financial Advisors.
“First, the payment is the primary budgetary concern for most buyers, so it is normally easy to shift the buyer’s focus to it,” Drury says. “Raising the monthly payment by only $20 typically raises the purchase price by about $1,000.”
Also, inflating the assumed interest rate in calculating the payments at the beginning of the negotiation allows “wiggle room” to either maximize the purchase price or sell warranties or accessories, he says. “If financing, budget for and select a vehicle based upon monthly payment, but always be conscious of the selling price prior to sealing the deal,” Drury says.
2. Make the lowest offer you can without being told to leave. If you’re a good negotiator, a car dealership is a great place to test your skills in making a lowball offer, even if it’s offensive.
“You want the salesman annoyed or offended by the offer, but still willing to negotiate,” says Alex Gierczyk, a part owner of a dealership in Houston, Texas, in the early 2000s until he sold to his partner.
“This was the most effective tactic bar none,” Gierczyk says. “It leverages the fact that we want to sell the car, even at a small margin because there’s no disadvantage to increased inventory turnover.”
3. Come back at the end of the month. The end of the month is good time to negotiate because managers have quotas to hit each month — and they may get a bonus for hitting their quota — so if you’re the customer that puts them over the top you could get a better deal, says Mike Rabkin, president of From Car to Finish, a service that negotiates new vehicle prices for buyers.
4. Deal with managers. Getting into the big, glassed-in office may be difficult to do, but dealing with managers is a good way to negotiate a better deal because they’re the ones who can decide price on the spot, Rabkin says. They’re not paid on commission, so have less incentive to work you for a higher price. Managers include the sales manager, fleet manager, general sales manager and Internet manager.
5. Give the dealer one chance to beat the best price. This goes back to Gierczyk’s tactic of making the lowest offer you can. Get at least three or four quotes from different dealers not only so you get a feel for what a good price is, but also to make the dealers “put their best foot forward since they only get one chance at your business,” Rabkin suggests.
6. Know the dealer’s profit margin. Another tactic to getting quotes in the form of price is to get them as a profit margin, Rabkin says. For example, ask dealers for a quote of $500 over invoice, or $4,000 under MSRP, for a specific make, model and style, regardless of color and options. You can then use it to set a price for whatever vehicle is available that starts with that description, he says.
7. Some car options don’t have to be bought as a package. Dealers make a good amount of profit by selling car upgrades. Instead of buying a $2,000 navigation package with a bunch of stuff you don’t want when you only want the backup camera, you can often get the backup camera installed via a third party vendor — and still through the dealer — at a much lower cost, says LeeAnn Shattuck, who helps women negotiate car prices. Shattuck says she recently did this for a client on a new Nissan Juke.
She also often has the dealer “add leather” to the base model car for a client who wants leather seats but doesn’t want to pay $4,000 for the “limited” or top-level model of the car with a bunch of other upgrades. Leather for the front and back seats, and door panels, can typically be added through a third party vendor for around $1,000, Shattuck says. The leather is of equal or better quality than the factory leather, and typically comes with a good warranty, she says.
8. Don’t buy the same day you test drive a car. Salespeople know you’ll be excited after a test drive and that you’ll quickly want to take home a shiny, new and fun car. That’s why they want you to come back inside the dealership and “talk numbers” immediately after the joy ride, Shattuck says. They’re counting on the impulse buy and that you won’t be prepared. Don’t fall for it, and walk away after the test drive, she recommends. Buying a car is a process, not an event, Shattuck says.
Aaron Crowe is a journalist who covers the auto industry for CheapCarInsurance.net.
