When we think of people who sell cars, a certain stereotype comes to mind. It’s an image of a slick, fast-talking wheeler and dealer who stops two large steps short of complete honesty. That stereotype is not 100% accurate, and there are straightforward car dealers out there. Many will exploit their customers, and even the best of them will look for the best deal for themselves. It’s up to you to protect your interests, and the best way to do that is to be aware of the tricks and tactics car salespeople will try to pull on you. After all, your loss is their gain, and many dealers are sharks with no conscience about bleeding a customer dry.
Let’s look at some of the most common dealership tricks.
Ignore the window stickers on the cars on display. Those are inflated figures meant to conceal the legitimate market prices. A quick internet search will give you accurate price estimates for the car. The online price is usually several thousand dollars lower than the “Manufacturer’s Suggested Retail Price” (MSRP) displayed by the dealership. You absolutely, positively need to know the online estimate before looking at anything. Don’t let dealers manipulate you into accepting their puffed-up prices as a starting point for negotiations.
No, they’re not! If your dealer wants to postpone a meeting indefinitely or makes you wait around for hours to “accommodate their schedule,” don’t fall for it. They are trying to create the illusion that the salesperson is incredibly busy, and his or her time is far more valuable than yours is. It’s just an attempt to gain a position of dominance. Don’t give in to their demands. You are the customer, and the customer is always right.
Most car manufacturers offer rebates, special financing offers, and other incentives to promote their products to potential customers. Sales managers know all about these incentives but have no obligation or incentive to pass this information on to you. They will happily leave you in the dark about options that could save you hundreds or even thousands of dollars. You should ask up front about incentives. It’s easy enough to lie by omission, but straight up lying to customers is another matter altogether.
Have you ever wondered why buying a car involves so much fine print, so many add-ons, and a boatload of options? Salespeople take you on a long walk all around the lot and bombard you with numbers, percentages, and trade-in options. That’s because they’re trying to tire and overwhelm you, leaving you intellectually and physically vulnerable. The salesperson isn’t trying to educate you. Oh no, he or she is actively trying to break you down by exploiting a phenomenon known as “decision fatigue.” When mentally hit from all sides with choices to consider and decisions to make, you become increasingly impatient, and thus likely to make rash choices.
So, what should you do? Don’t let them confuse you. Do your homework, come to the dealership prepared with a list of questions to ask, and make sure you get your answers.
Your monthly payments will be this, your interest rates will be that, and let’s not forget your down payment. Don’t fall for the hype. All that extra information can wait. Even talking about your trade-in can go on the back burner. Ignore the distractions. Steel your mind and negotiate the price of the car based on what it is legitimately worth, not your spending power. Don’t start a conversation by revealing how much you’ve got for a down payment, or how much you can afford to pay monthly. This tack just gives the dealer information to use against you, and they will use it against you. If you keep the conversation fixed on the car’s true value, which is the point that matters, salespeople won’t be able to manipulate or confuse you. When that’s settled, you can go on to the other details.
Here’s a dirty little trick a salesperson may try to pull on you. During your discussion, the salesperson you’re working with will get a call at the desk and will “have to take the call in another room.” This call sometimes comes from a colleague of the salesperson, who is in another room. The salesperson will pick up the phone, explain that they must take the call in another room, and leave. The shark in sheep’s clothing heads off, but the speakerphone on their desk phone remains active. It’ll be on mute so you cannot hear any chatter from the other room, but the salesperson can hear you discuss your thoughts with anyone accompanying you. If you’re alone and explain that you need to call someone to discuss your options, they may also try to pull their “bugging” trick.
Of course, you never want the dealer to know your absolute bottom line. The dealer wants this information and can use it against you. It’s unfortunate that sales professionals are not above resorting to dirty tricks to get such information, but if you know the tricks, you can avoid the traps. Discuss important matters outside of the store or outside the phone coverage area.
Knowing the actual market price of the car you want (or similar models) gives you haggling power. Internet prices are substantially lower than the MSRP at the dealership. Do your research and don’t start haggling downward from that inflated price point or else you’re feeding yourself to the sharks.
You might be eager to tell your sales rep that you’re paying cash, which makes you seem like a good customer. Not in an auto dealership, though. You should never announce that you’re paying cash until it’s time to close the deal.
Confused? Well, a large portion of the dealer’s profit lies in financing. Paying up front in cash means a percentage of their potential profit is dead and buried. This fact makes you less attractive to salespeople and weakens your bargaining position. After all, they have more to gain when you pay via other financing options. Always negotiate the price of the car first, and then tell them you’ll be paying in cash. That way, they won’t be able to use your cash payment against you by jacking up your price.
By the way, this advice doesn’t just apply to those paying in cash. Save this information for last, even if you do intend to use financing.
Here’s yet another Jedi mind trick the circling shark will try to use: The freak-out. The intention here is to make you panic by hitting you with an initial price that’s way high, a trade-in offer that’s way low, and a monthly payment enough to make Bill Gates gasp. When you calm down, you lower your expectations and are willing to accept that you won’t get as good a deal as you had wanted. Then, the number massaging begins. The salesperson will offer you a “new” deal to trick you into believing he or she is trying to help you out, and you’re getting a great price. You’re not. Don’t believe the hype and don’t let their freak-out tactics affect you.
You’re probably not surprised to see this one! Salespeople often attempt to confuse you just enough to make you give up and accept a lesser deal. Always watch out for something called a “four-corner worksheet.” It’s not a direct scam, but the person you’re negotiating with almost certainly intends to use this worksheet to wear you down. The four-corner worksheet moves numbers and information around in a deliberately confusing way. Here’s an example of a dirty, four-corner worksheet trick. Let’s say your trade-in is worth $2,000. Not anymore. Now it’s a $1,000 trade-in, and you don’t even know it. How? As clear as day, there’ll be a $1,000 trade-in credit off the total price, right next to a “Trade-in Value: $1,000.” The $1,000 is listed twice to make you believe the total deduction is $2,000. It’s not. You’re losing $1,000 right before your eyes.
You’ve agreed on the price, trade-in value, and financing. You can relax, right? Not quite yet. While the finance manager is busy getting all documents in order, the salesperson will talk about anything to obstruct your thought process and distract you from the deal. They are trying to create an opening to slip in an extra add-on or remark about making a “slight change” in passing, hoping you won’t notice it. Don’t fall for it! Treat any proposed change as a whole new deal, and make it clear that you are paying close attention. It might be awkward, but not as awkward as being scammed.
Don’t lowball too much. The information we listed in this article may give you a lot of ammunition, but you still can’t stroll into the Lamborghini dealership with a shoestring budget and an optimistic smile on your face. It’s still a chess game, and you need to appear attractive to prospective sellers. If dealers have no incentive to talk to you, they simply won’t waste their time. They’ll move on to the piece of fresh meat sitting in the customer waiting room.
Knowledge is power. This information should give you an edge and the means to beat the sales-sharks. After all, predators hunt prey, not other predators. Happy hunting!