Car Salesman Reveals All

Sure, I was a car salesman. Only for a few months, but during that time I learned a lot about cars and people and why and how people buy cars. People approach car-buying from a base of fear. They’re afraid they’ll get taken: unwittingly buy a lemon, end up with something they don’t want, or pay waaaay more than the car is worth. Most car buyers start out blind: they figure the salesman will have their best interests at heart and will give them a good deal.
Hah! First mistake. Don’t assume that, don’t assume anything. Study up on the subject, go out armed with knowledge, and buy smart.


First, rid yourself of all your fairy notions about who the car salesman really cares about. He cares about himself. That’s the bottom line. Then the dealership, and only then about you. That’s the cynical line, I know, but when you’re getting ready to buy a car, it’s the best approach. If you’re not expecting them to rip you off, you may not recognize it.
Next, consider the car. If it’s a new car, be aware that every once in a while, a new one comes off the assembly line complete with problems. If that proves the case, will the dealership fix the car? If it’s a used car, is there any warranty remaining? Ask! What does it cover, and what does it not cover? What happens if the thing just quits on you? What if the master cylinder goes out, the battery proves to be moribund after two days, if all the tires go flat at once? Will the dealership help you? Will they come get the car? What about a loaner? Before you buy, that’s the time to negotiate all these little extras, and get them in writing.
If you’re buying a used car, you may want to know who owned the car before, what kind of problems they had with the car, and did they furnish documents to validate the repairs they say they made? Tell them firmly that you want your mechanic to check the car out. If they won’t cooperate, go elsewhere. Look for a dealership that will give you at least 30 days to determine if the car is a lemon.Ã?¯Ã?¿Ã?½


The way to ensure you get what you want is to know what you want before you go shopping. What’s important to you? The price? The make? The model? The year? The mileage? Write these things down in their order of importance, then make another list of what you don’t want. What are you willing to accept and/or reject to get a lower price? You may end up having to do this, so it’s best to be prepared in advance.

If the salesperson gives you a bad time about any of your demands, or if you just get a bad feeling about him – would an honest person wear an orange tie with green ducks all over it? Don’t let the pushcart peddler pressure you into buying a car you don’t want, a higher-priced car you can’t afford, or some “demo” you don’t care anything about. If the pressure gets to be too much, start backing away from him or her, and ask the sales manager for another, or go elsewhere.Ã?¯Ã?¿Ã?½

Okay. You’ve found the dealership you want to work with, a nice salesperson and the very car you want. The next question is:Ã?¯Ã?¿Ã?½


That depends on whether you’re buying a new or used car, but either way, the price must suit you. If you think it’s a good price, go ahead and buy it. If you don’t, don’t. The salesperson will craftily question you to find out if you enjoy negotiating or if you’d rather watch the alien autopsy again. They’ll proceed accordingly, offering you a price that is high, saying that’s “the best we can do.” If you resist, they’ll go back to the sales manager and come out with a (slightly) better deal. They’ll try their best to convince you that this is it. If you disagree, stand up, shake their hand and walk out. If they let you get out the door, that was it.Ã?¯Ã?¿Ã?½

The difference between the “invoice price” (what the dealership paid for the car) and the “sticker price” (suggested retail price) should give you some idea of what you will end up paying for the car. Do a little research and find out by what percentage the car you want usually earns over invoice. When I was selling cars, a Ford Escort would generally bring around 4% over invoice, while the Explorer often sold for 8-10% over. If the car is a popular model, you can expect a higher percentage.
A similar process will point you to the right price for a used car. Check out the Kelly Blue Book,, or invest in a car check at to get a fair price. Two prices will be listed: the wholesale price and the retail price. Again, try for a price between the two.�¯�¿�½

The dealer of course will want to give you the lowest possible price for your trade in.�¯�¿�½


If you’re buying a used car, research the Kelley Blue Book price for the car. There should be two Blue Book prices: the wholesale price and the retail price. The dealer probably paid a little less than the wholesale price. You should shoot for a fair price between the wholesale and the retail price.

If you are trading your car in, the dealer will want to make the highest possible profit on your trade-in. If you plan to trade your car in and you still owe money on it, call your finance company or bank and find out what it will take to pay the car off right now. Add this sum to the cost of the car you want to buy, then subtract the wholesale value of your trade-in – this is the dealer’s cost in this transaction.Ã?¯Ã?¿Ã?½

An example: let’s say you’re contemplating a used car for $8,000. The value of your trade-in is $2,000, and you owe $1,000 on it. Thus $8,000 plus $1,000 – $2,000 = $7,000. This is the way the dealer will view the situation. The top few thousand will probably be his profit, so you have some room for negotiating.Ã?¯Ã?¿Ã?½

If you are not offering a trade-in, the process is even simpler. Find out the invoice price (if you insist, the dealer may show you the invoice), then add to it whatever you want to pay or can pay, over invoice.


With but a few exceptions, you will not get your money back if you later sell your car. If it’s a used car and you have rebuilt or replaced the engine, or if it has low mileage, or is a popular make (Porche, Corvette, etc.) you may come close. But with a new car? Never. Unlike a house and property, cars do not appreciate much. Instead, they depreciate – lose value – 20-40% the first year, 15% or more on average. That means that if you paid $20,000 for a new car, in the second year it will probably be worth around $13,000. That’s $7,000 lost in two years.
Are you sure you need a new, or almost new, car? Would it be cheaper to fix up your old one? No? You’re determined? You will go through with it?Ã?¯Ã?¿Ã?½

All right. It’s your decision. If you are set on buying, the next question becomes:Ã?¯Ã?¿Ã?½


Some people will simply plonk down the cash or a handful of plastic, take the car and drive away. But most of us will need some help with the financing. When you take into account the costs of owning a car after you have driven it off the lot – including repairs, maintenance, insurance, plates, taxes, shelter and registration, you can see that you’re going to be investing – no, not investing, throwing a lot of money at this car, just to keep it going.Ã?¯Ã?¿Ã?½

If you’re still convinced you need a new car, call your banker and find out how much he’ll give you for a new car. Chances are the banker has done this a LOT more times than you have, so listen to what he or she says. They may even help you determine how to get the best interest rate, what your monthly payments will amount to, how long the loan should run, etc. Try a credit union, ask your dad. Shop around until you find the financing plan that’s right for you.Ã?¯Ã?¿Ã?½


Surely, most or almost most, car dealers are honest people. But the more tricks you know about, the more easily you can recognize them, right?�¯�¿�½

Right. So beware of these tactics:�¯�¿�½

If you resist the pressure coming from your salesperson, and decide at length to abandon the project, you may find that the keys to your trade-in have vanished. This serves the same purpose as a bear trap: it’s meant to keep you where they want you. Take two sets of keys with you when shopping for a car and if your other keys “turn up missing,” just take the other set out of your pocket and tell them you’re going past the police station to find out. Magically, your keys will appear.Ã?¯Ã?¿Ã?½

If you accept the dealer’s financing plan, demand to see the details. Make sure you know all you need to know about the transaction, especially any “add-ons” the dealer is trying to add on.Ã?¯Ã?¿Ã?½

If they require you to sign any kind of an “arbitration agreement,” get up and walk out.Ã?¯Ã?¿Ã?½

Keep in mind that the dealer and their lender may be working together to up the price or interest and wrest money from you. Better to arrange your financing in advance.�¯�¿�½

Dealers have been known to forge their customer’s signatures, so examine every document before and after you sign.Ã?¯Ã?¿Ã?½

Don’t pull out a wad of cash and tell the salesperson, “This is what I have to spend.” A less-than-honest salesperson will immediately try to separate you from it, perhaps by saying, “Well, isn’t that a coincidence! That’s the price of the car you were looking at!”Ã?¯Ã?¿Ã?½

If you are foolish enough to ask the salesperson what they know about the car’s background, don’t expect to hear the truth. Use instead.Ã?¯Ã?¿Ã?½

Don’t mention your trade-in until the negotiations are complete and you have “real” rather than inflated prices.Ã?¯Ã?¿Ã?½

The more you know about this process, the better off you are!

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