Buying a car is a significant investment, which can often be overwhelming. A crucial part of the journey is about negotiating with car salespeople. While their aim is to make as much profit as possible, your goal is to get the best deal. This guide will provide effective negotiation strategies to successfully sail through the process and outmaneuver common car dealer sales tricks.
Understanding Common Sales Tactics
Car salespeople are highly skilled; most have undergone extensive training and gained ample experience in their field. However, it’s worth noting that they often work on commission, which can create pressure to make a sale. Some salespeople may even resort to dishonest activities to reach their targets, resulting in cases of auto dealer fraud, but this is not a reflection of the entire profession. Despite this, they have various techniques and systems at their disposal to persuade potential buyers and close a sale successfully. Here are some tactics to look out for.
They Run Your Clock and Patience
Salespeople often attempt to wear out customers by prolonging the negotiation. Time is on their side, but you may want nothing more than to be done with it and agree to their terms. But this would be a huge mistake! It’s typical for buying a car to take a significant amount of time, but it shouldn’t result in a stalemate or, worse, ending up in a deal that’s great for the dealership but bad for you. It’s okay to take breaks or even resume negotiations on another day.
They Focus on Monthly Payments
One common car dealer tactic is to shift the focus to monthly payments instead of discussing the total cost of the car. While lower monthly payments might seem attractive, they often translate to a longer loan duration and higher interest rates, meaning you pay more in the long run.
They Pressure you into a “Limited Time Offer”
Salespeople often create a sense of urgency by suggesting that a special price or deal is only available for a short time. This move is nothing more than a pressure tactic designed to rush you into making a decision.
Upselling Extras
Dealers often try to sell additional features or services, such as extended warranties, insurance, or accessories. While some of these may be beneficial, many are overpriced and can significantly increase the total cost of your car.
How to Counter Car Salespeople with Your Negotiation Skills
Knowing about car dealer tactics is half the battle. The next step is learning how to counter them effectively.
Do Your Homework
Before stepping into a dealership, prepare yourself with the right information about the car you’re purchasing. Research the make, model, and year of the vehicle you’re interested in. Determine the average market value and understand the difference between the manufacturer’s suggested retail price (MSRP) and the invoice price, which is the cost to the dealer.
Get Pre-Approved Financing
Obtaining a pre-approved loan gives you specific budget information and lets you negotiate from a position of strength. Dealers may offer in-house financing, but this should only be considered if it is competitive with your pre-approved loan.
Don’t Settle on the First Dealership: Shop Around
Don’t limit yourself to a single dealership. Compare prices and offers from various dealers. Online car shopping platforms can also provide a ton of information and competitive pricing.
Focus on the “Out-the-Door” Price
The “out-the-door” price includes the total cost of the car, taxes, and fees. Emphasizing this figure helps keep the negotiation focused on the total cost of the vehicle, avoiding distractions like financing and trade-ins.
Be Prepared to Walk Away
If negotiations aren’t going your way, don’t hesitate to walk away. Walking away signals to the dealer that you’re not desperate and can often lead to better offers. There are plenty of other dealerships and cars out there that are more than willing to take your business. Also, out of desperation, the dealership may come back to meet you on your terms instead of theirs, making it a win for you.
Practical Advice to Follow During the Negotiation Process
Knowing the strategies and tactics is essential, but applying them in the negotiation room is where the rubber meets the road.
Start with a Reasonable Offer
Begin with a reasonable number based on your research, and be prepared for counteroffers. However, stick to your budget and don’t be swayed by pressure.
Keep Trade-Ins and Financing Separate
Only discuss trade-ins and financing after settling on the price of the new car. This prevents dealers from manipulating these figures to their advantage.
Use Silence as a Tool
Don’t feel the need to fill every silence during negotiations. A well-placed pause can put pressure on the salesperson and may lead them to offer concessions.
Read Everything Carefully
Before signing anything, read all the paperwork carefully. Make sure you understand every item, including the terms of the loan, fees, and any extras. If something isn’t clear, don’t hesitate to ask for clarification.
Negotiating with salespeople requires preparation, patience, and a clear understanding of clever sales tactics. But, by doing a bit of homework and knowing what to expect during the purchase of your next car, you’ll feel more confident about having things go your way and landing the best deal possible for your vehicle. Ultimately, the power to make the best decision is entirely up to you.
