Ex-Car Salesman Tells All: How to Beat the Auto Dealerships at Their Own Game

In February 2004 I worked one educational month as a car salesman. I learned you don’t need a full set of teeth to be a winning car salesman and the nicer a salesman is to a customer, the more that customer overpays. I also learned the car salesman’s playbook. And of course, I’m willing to share. If you want to protect your wallet when you’re buying a new car, here’s how to beat auto dealerships at their own game.

Be Prepared

Even if you deflect the sleaziest sales schemes dealers dish out, you can’t get a good deal without some homework. Don’t step into a showroom without reliability, safety, and pricing information (try Edmunds.com). You should know the mark-up of the car’s sticker price and how much the dealer expects to profit. It makes it almost impossible for the dealers to bluff when you already see their cards.

Call First

Auto makers and dealers do everything in their power to make car buying an emotional experience. They have you sit in plush new leather, soak up new car smell, and punch the gas and hug the turns on the test drive. The salesmen hope, by the time you talk price, you want the car so badly you’ll okay the first number thrown at you. But, ask for the dealer’s best price over the phone, you axe their edge. Lucky enough to snag a telephone quote? It will almost always beat a quote from the showroom. But be warned: Good dealers will smooth talk you into making an “appointment” at the dealership without giving a price.

Hide Your Trade

If you plan to trade in your existing vehicle, don’t let the dealership know it until you have agreed on the price of the new car. Tell them you definitely don’t have a trade-in and then act like you changed your mind. The reason? Dealers use their profit margin on the new car price to make it seem like they are paying thousands of dollars more for your trade-in. Only when you handle the new car and the trade-in separately can you get good deals on both.

Talk Price, Not Payment

“Payment” is a car salesman’s favorite word-and not just when it refers to his commission check. Dealerships love to quote cars in terms of the monthly payment, leaving the purchase price out of the equation until the papers are signed. In the negotiation process dealers try to lower the monthly payment by extending the loan term rather than cutting the purchase price.

Be Patient

Negotiations are tests of will-power. Who will cave first? Dealerships make you wait to get you dreaming about your new wheels. Why not bite back? Car salesmen’s commissions are based on volume. They want to sell lots of cars fast. And unless you’re shopping for a rare model, there will plenty of cars left tomorrow, but with every day that goes by the dealer will grow anxious wondering whether you changed your mind or found a better deal. Use time in your favor to get dealers to provide even more price concessions.

Go Rate Shopping

You wouldn’t negotiate with car salesmen without the car’s average price; you shouldn’t negotiate an auto loan without information, either. If you can, get your credit report before buying a car. Then check a site like BankRate.com for average interest rates for borrowers with similar credit scores. Apply for an auto loan from your local bank or credit union and take the approval with you to the dealership. You may get an even better rate from the dealer. Worried about too many credit applications? True, multiple credit inquiries can negatively affect your credit score. The good news? Credit bureaus now count multiple inquiries within a month as one.

Don’t Be Upsold

If you think the battle with the auto dealership is over once you sign the purchase and sales agreement, think again. The dealership will trap you in a small office for another hour or two while you finalize the paperwork, including financing. They’ll also try to sell you a grab-bag of overpriced services like extended warranties, unnecessary insurance policies, and even virtually worthless add-ons like window etching and paint protection. Just say no to everything. If you must have something they offer, remember that it too is negotiable. Add-on services are almost 100% profit for the dealer, so you can often get them for less than half of their starting price.

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