10 Tips For Dealing With Car Salesmen to Make Sure You Don’t Get Hosed
Posted on Tue, 12th June, 2007 by Jeremy
Most people are probably familiar with the typical car salesman based on the stereotypical image portrayed on TV and in the movies. They are often shown as sleazy men in horrible outdated suits that will do anything to close a deal. While they may carry a bad image it is more of the exception and not the norm.
Even though you may not be dealing with Slick Willy when you purchase your next vehicle it is important to remember that they are still in sales and it is their job to sell you something. Purchasing a vehicle is a big decision so it is to your advantage to know what to expect and how to deal with salespeople in order to make sure you are really getting the best deal and being treated fairly. A few tips to consider:
1. Be Prepared. The best thing you can do is to go into the vehicle buying situation with information. Make sure you clearly understand what type of vehicle you want and what features you need. Are you looking for a new car or used? If you are considering used make sure you understand that they will try to offer you many add-ons such as extended warranties, roadside assistance or a number of other services and determine what, if any of those you may be interested in.
2. Don’t Provide More Information About Yourself Than You Have To. People in sales are trained to learn about a customer in order to tailor their sales tactics. So the best thing you can do is provide the least amount of information about you and your situation as possible. Maybe you just totaled your car and need to get a new car this very same day, don’t let them know that. They don’t need to know if you plan on buying a car today, this week or next week. If they sense urgency they will immediately realize they have some additional bargaining power.
3. Use the Buddy System. When shopping for a vehicle don’t go alone. If you are married you will likely take your spouse anyway but even if you are single it can be worth it to bring a friend or two or even a relative with you. People are more vulnerable under high-pressure when alone so having others there with you can reduce the chances you rush into a decision. This can also help to ensure the salesperson is completely forthright.
4. Understand the Salesperson’s Motives. If you are using the phone to call around with questions during your preliminary shopping it is the salesman’s job to get you into the showroom. They may lure you in with specials or deals that may or may not exist so it is up to you to do your due diligence beforehand and strictly get the facts you are looking for. Once you are in the showroom it is their job to send you home with a vehicle. Not only do they want to put you behind the wheel of a car they want to entice you to upgrade or at least pay as much as possible for the car you are interested in. Make sure you know exactly what you want and stick to it.
5. Whoever Speaks Next, Loses. When negotiating it is important remain calm and to avoid rushing into decisions. When the dealer presents you with an additional feature or service simply take a moment to pause and think about it. They will present it to you in a way that sounds as if you must have it, but if you don’t immediately respond they will have to come back to you with a question or more information. They want you to make quick decisions, but instead lead them into providing more information. Even if you know the answer is “no” immediately give it some time or ask further explanation. A quick negative response will only lead to a barrage of further sales tactics.
6. Be Nice. Let’s face it, people enjoy speaking with and dealing with others who are polite and respectful. If you come into the dealership with an abrasive attitude you won’t get very far with a salesperson. If you are polite and treat them with respect you will likely see them return the favor. This alone won’t stop you buying something you don’t need but it will make the negotiations go much more smoothly.
7. Don’t Show Enthusiasm. People in sales would kill to have a customer who is excited and enthusiastic about an upcoming purchase. This behavior puts dollar signs in their eyes and this excitement can blind you to reality. Maybe you just found a car you’ve been looking for, it has every feature you wanted, it is the right color and the price is right. Don’t sit there with a big grin on your face or jump with excitement, but simply ask for more information about the vehicle and even continue to look at other vehicles even if you know that is the one you want.
8. Keep Your Trade-In a Secret Until a Final Price is Set. If you are planning on trading in your old car to help with the purchase of this new vehicle make sure you don’t let the cat out of the bag until the end. The salesperson will certainly ask if you will be trading in but you don’t have to tell them yes or no, maybe you are considering it. Either way, if they know you will be trading in they will use this to their advantage in the negotiation which will undoubtedly become more confusing and potentially cost you some money in the process.
Once they know you have a vehicle to trade they will try to get one of their appraisers to go check it out immediately while you continue to negotiate the purchase. Once they come back the pressure is on you to go through with the sale since they have already done the work. So, come up with a bottom-line figure for the price of the car first, and then determine what trading in your old car will do to the bottom line, not the other way around.
9. Seek Financing Before Shopping. This doesn’t mean you need to have a loan already secured and ready to go, but check with your bank or credit union and see what type of rates are available to you and whether or not you would be approved for a loan in the estimated amount that you expect to need. Remember, most dealerships and salespeople don’t make much if any money on the price of the vehicle. Most of their commission comes from the in-house financing and extras sold with the vehicle. If you can find a better rate and terms with another lender before going to the negotiation table you can omit that discussion almost entirely.
10. You Have the Upper Hand. The most important thing to remember is that you have the upper hand. You are the consumer and you have a vast number of car buying options available to you. Don’t be fooled into letting the dealership make you feel that you need to rush into something or that you need to deal with them specifically. While car buying may not be the most pleasant way to spend your weekend you have to keep in mind that it is an important decision and if one dealer is difficult to work with or won’t accommodate your needs you can simply walk away.
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I especially like your tip #9 Seek Financing
Before Shopping. Oftentimes at the dealership, you’re asked how you’ll be financing the sale. If you’re pre-approved for a loan at your credit union or bank, simply tell them that you’re paying with a certified check unless they can propose something better. This way, you’ve set the stage that you don’t need their financing, but you’re open to alternatives.
What do you do if they offer an extended warranty on a used car?
Under #1, Be prepared, you should also add to know how much you should pay. Itis very good to go into the dealership with pricing information from Edmunds, Kelly Blue Book, NADA, etc. This is for both the vehicle you are purchasing as well as your trade in.
In regards to an extended warranty, you have to be very careful and understand exactly what it covers. Most dealerships will provide this warranty through another third party so the actual parts/services covered may vary.
There are cases where the extended warranty can be beneficial and it really depends on how comprehensive the coverage is and for what price in relation with what your needs are.
And Patrick, that is an excellent point. I had thought about that after I posted this. But yes, part of being informed is knowing what a reasonable price is for the vehicle you are looking to purchase as well as any potential trade. Thanks for pointing that out!
Great post. I sold GM cars for about a month before I realized how nasty of a business it really can be.
You should also avoid the whole use of the Four-Square worksheet. If the salesman comes back to you with that sheet, he’s most likely trying to misdirect you. I can’t stress that enough. A lot of times that sheet is used to get people hung up on the value of their existing car.
Most people over-value the car they’re driving now (sometimes by several thousand dollars) so the salesman will use the worksheet to get you to haggle about the value of your used car rather than the value of the car you’re going to buy. That’s part of the reason why you should not mention a trade-in, like it says above.
Most of the time, the value you get in your trade-in actually comes from paying more money for your new car.
Also, be aware now that most companies don’t offer the 5 year warranty on new cars. Most companies offer a 3 year warranty and charge you extra for those 2 additional years. Hey, any way to make a buck. So when you are figuring out the value of the car, be prepared to spend extra for those additional years of protection, if you want them. For example, we bought a new Honda Odyssey last year, and it cost us $1200 for two extra years. Not a whole lot of extra money, but if you finance it, you’ll feel it in your payment.
And finally, most importantly, you should always be willing to walk away. Always always always. Anything that costs this amount of money you should take a day to think about. Most likely the car will be there tomorrow.
Cheers!
Edmunds had an excellent article on the behind the life of a car salesman that I read years ago…http://www.edmunds.com/advice/buying/articles/42962/article.html
check it out too…its great to learn how they think
I like the general idea of ragging on companies and salespeople; my blog is basically about just that. However, I think it is also important to know that, when dealing with a quality professional salesperson you want to do the opposite. Especially the “information” piece, because salespeople are basically supposed to make your life better. If you keep everything a secret then the salesperson becomes nothing more than an adversary. I agree that this is the unfortunate truth sometimes, but it should be otherwise.
Like your other commenters, I think being prepared on the financing side especially is good. A car is a large and complicated transaction that can be arranged in many ways, so spend some time on thinking of the best arrangement.
A car is a strange item because in my opinion it is almost total luxury. The basic transportation component is so small compared to what most people buy so the increment cannot really be analysed or sold on the basis of benefits. That means salespeople are always going to be trying to shame you or excite you into spending.
Number 9 is really the most important- the salesman many make a couple hundred dollars off selling you a car- it’s the F&I guys you need to be aware of- thats where car dealerships make their money. So if you really want to piss them off and get a good deal- get your financing in place first.
I would also add- never ever trade in your vehicle- you will never get the amount of money you could if you sell it yourself- no matter what they say.
IMHO, it’s better to pay cash if you can and buy from a private seller.
RE: Extended warranties. Know that these are negotiable. We got quite a bit knocked of the price of ours. Funny enough, our salesman told us this before talking to F&I.
Here’s what I did to get a car for $750 under invoice. I just got my 2007 Corolla last week.
1. Get invoice price from edmunds.com. You need to know exactly what you want and what you dont need.
2. Email several dealers with this info.
3. Confirm price, availability, taxes, everything important in email.
4. Got preapproved car loan from credit union.
5. Once you have everything negotiated “in writing” in your email, print it, and call and meet the guy.
I was in a car dealership 20 years ago. He was selling Ford. I bought a new top of the line Ford truck with trade in for 13,700. I went to another Ford Dealership. The guy was offering me 2,000 more for the pay off on my truck and jacking up the price of the new truck to 18,000.
I bought the truck from the first guy. He told me that there weren’t any cars on the lot he couldn’t sell for 13,000 and this included mustangs in 1987.
the number one mistake people make? negotiating the monthly payment instead of the final price. Research the total cost you can afford first. if you go in and say I want my payments to be x amount a month, you will find yourself upside down on the loan!
I also never ever ever take the loan from the dealerships finance services, use your bank or credit union to get the amount you want under the terms that work for you and pay the dealership outright. Dealerships make most of their money through financing and service, FYI
Personally, I don’t like buying cars from a dealer. I’ve always bought online or directly from the seller and have always had a good experience - got a better deal too.
The car I drive now was purchased 7 years ago. It’s a salvage title car that was rebuilt before I bought it. It’s been a great car and I saved about $5000
maurice reeves your an idiot,It really is amazing how many “experts” there are out there, considering most people only go out to buy cars once or twice every 2 or 3 years, while the dealerships do this everyday. Who do you think is going to win? You sell cars for a month and you think you know the business? you have no clue. I see a lot of advice of doing most of the deal thru emails,and internet. People will generally over educate themselves (the smarter they make themselves,the dumber they get). Best advice- Know what the vehicles involed in the deal are worth and respect the folks that are helping you and they should return the favor, it’s common sense.
#8 is a surefire way to tick off your salesman. Not only is it rude, it’s dishonest. If you are trading in a vehicle, be up front about it, but firmly ( and politely ) explain that you want to negotiate the price of the new vehicle first, before discussing your trade. Just because some salesmen are dishonest / sneaky / whatever, does not make it OK to be dishonest with another.
Great tips! I’d like to emphasize more on #6. Be nice. I’ve witnessed this experience with my sister a couple of years back. Unfortunately, my sister was such a snub when dealing with sales people; and it turned out we could never get a good deal. A friend of mine tried the same dealership; she got a great car with a good deal and my sister was all the more pissed.
I really like tip #6 about being nice.
I have sold Chrysler Jeep Dodge’s since 2001. I am a family guy with a wife and 2 young sons. I am a member of the local church and do alot to support the local community. I don’t deserve to be treated like the scum of the earth, and just like the article says, people don’t get far with me when they do. Like my grand mother always said, its better to treat with sugar than vinegar. It’s very true. I will work twice as hard to get you a great deal on the car when I am treated with respect. I will try to burn you as much as I can when I am cursed at, and treated like a dog. It is human nature!
Treat your saleman with respect. If you run into a salesman that doesn’t deserve any respect because he doens’t give you any, then ask for another salesman, or leave and go to another lot. There are bad guys out there for sure, but I’d say the majority of us are pretty good guys.
Lets face the facts. Everybody knows that we are on commission. The more money we make the dealership, the more money we make for ourselves. The dealer is going to make money, they can’t stay in business if they don’t. This website will help you make sure they don’t make enough to take their family on vacation to Disneyworld for a week, but still make enough to take the family to Mcdonalds for a meal.
Great stuff! If you do decide to trade in your car, get the Black Book value of your car! Its what most dealerships use.
Better yet, ask to see the sales managers Black Book, if he says they don’t use it, get up and leave.
I am a finance manager at a GM store. I have to disagree with #9 based on the fact that we have better interest rates on our certified pre-owned vehicles than you could ever get at a credit union. I like an informed buyer, the more educated the customer is the more pleasant the transaction can be for everyone. The guy who wrote this article stated that salesmen make more money when the customer finances but that is completely false. Most dealers pay the F&I manager separate from the salesman so everyone has initiative to make money for the dealership.
I do agree with #6. You can be a hardnosed customer while being nice at the same time. Acting like a jerk will not only make the experience worse for everyone involved, it will also reduce the quality of “service after the sale” greatly.
I agree i think number 9 is very improtant. It is somthing you need to know to get a good car at a good price. It may depend on a used car that may have problems and may not be great for you so i agree with Dan.