What Car Dealers Don't Want You To Know - Part 2
Is Cash King?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.
Freak Out!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.
ConfusionYou'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.
Agreement and DistractionYou'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.
Final WordDon'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!