When it comes to car negotiating, car salespeople are masters in the art of diversion. Using tricky phrases or writing on paper with arrows and cross-offs, all designed to confuse you and take your mind off the bottom negotiation seminars - the actual purchase price of the car!
As an ex-car salesperson (or is it a reformed car salesperson?) in Phoenix, I know the tactics dealerships use for confusion and negotiation seminars - designed to get you to say "yes" to buying that shiny new vehicle for the absolute most they can get out of you!
So what exactly are these tricks and how can you counter them and keep the control in your court? That's what this article is all about. Let's get started . . .
So, you've found the vehicle you want and you're ready to start the car negotiating process. The salesman takes out a piece of paper and draws a large plus sign on it. This is called the "four square." In the first square he writes the sticker price of the vehicle. In another square he writes your down payment. Then he leaves to "talk with his manager assuring you he's going to work you the deal of negotiation seminars!"
After making you wait what seems like an eternity (another car negotiating tactic designed to make you anxious) he comes back with a big grin on his face and says "good news!" and puts down the paper. The remaining two squares are filled in with the trade value and negotiation seminars.
This is where things quickly begin to go south in the car negotiating process. The trade value is usually WAY TOO LOW and the payments are WAY TOO HIGH.
Don't be fooled! This car negotiating tactic is designed to throw you off balance and make you think the negotiation seminars you want are not obtainable, that you have overestimated the value of your trade-in, so you'd better rethink the down payment or monthly payments. It's a subtle way to manipulate you into doubting yourself and becoming anxious.
The salesman's job at this point is to get a signed commitment "bumping" you up from the original down payment and negotiation seminars you want. Here's how he does it:
You're looking at his sheet and getting nervous thinking you can't afford this vehicle!
Then he asks you, "What payments were you hoping to get?" Or "What were you thinking your trade-in was worth?" These negotiation seminars are designed to plant doubt in your mind. Maybe what you thought your trade-in was worth more than it is . . . Maybe the payments you want are not reasonable for this vehicle . . . maybe you need more money down.
He says your negotiation seminars are $700 and you wanted $500. You think you're miles away so you say to yourself, "Well . . . . I can afford $570 if I budget myself." So, already you've come up a bit more than you already wanted.
Also, during this phase of the car negotiating process he's taken your focus OFF the primary goal - the PRICE of the vehicle you want to purchase! Now, instead of talking "purchase price" - which translates into less profit for him, he's got you looking at "payments" - which translates into more profit for him because he can control those through stretching the term or changing the interest rate, without touching the negotiation seminars of the car you want to purchase!
Taking the "four square" sheet he writes down $570, then asks the next question "Up To?" Meaning, $570 to $600 maybe? So, the salesman writes down something like "I will buy and drive right now for $570 to $600 a month" and asks you to sign it. Then he goes back to "talk to his manager." So you see, already he's bumped you up by $100 a month, and hasn't even discounted the vehicle yet!
You're thinking, well, to get to that payment he's going to have to come up in trade value (which is usually about $1,000 to $2,000 more than he quoted you) or come down in price (which is a last resort). But even if he comes up in trade value, he's low-balled you on it anyway, so he still hasn't LOST any real profit. And the truth is, YOU haven't even begun car negotiating because HE is controlling the entire situation!