How to Deal and Negotiate With Car Salesmen

Buying a new car SHOULD be fun and enjoyable. However, because of the high-pressure tactics used by some sales people, the process can be riddled with pitfalls. If you're lucky enough to find a trustworthy salesmen, good for you. If not, here are a few steps you can take to make sure you don't get duped.

Instructions

1

First, take a moment to step into the sales person's shoes. Think about WHY they resort to high-pressure, often ethically questionable tactics.

Answer: Their income depends on you buying a car, TODAY, because they work on commission. If they let you leave without getting a sale, the odds of you coming back are very slim, and their cut of the sale is lost.

Keep this in mind as you deal with the salesmen - knowing their exact motivation helps give you the upper hand in the situation.

2

Next, RESEARCH. Being well informed is absolutely key in dealing with car sales people.

Once you decide which vehicle you're interested in, research it as much as possible. Use the manufacturers website, as well as sites like Edmunds, KBB, Cars.com, etc. Also, Google the name of the car and see what comes up. You may find blog posts that mention recurring problems, reviews, what other people are paying, and lots more.

This way, when you talk about the car, you'll sound informed, which will let the sales person know that you won't be easily pressured.

3

Know the "real" price of the car you're looking at.

MSRP is the absolute HIGHEST anyone would ever possibly pay. But you should be aiming more for the invoice price - this is (sort of) what the dealership pays for the car. Especially in today's economy, most dealerships will actually be offering prices at or below invoice.

(They will still make money even if you get your car for under invoice - there is something called "holdback" that contains their profits.)

4

One step that may be hard to follow: ALWAYS be ready to walk away.

No matter how fun that new car is to drive, or how shiny and cool it would look in your driveway, NEVER fall so in love with it that you're not willing to walk away and come back the next day.

Like I mentioned before, the number one goal of the car dealer is to get you to buy TODAY. If you're truly ready to walk away at any point, you take away a lot of their leverage.

5

Trust your gut.

Sometimes, the moment you shake hands with the sales person, you'll sense that something is not quite right. If this feeling only increases as you chat with them, save yourself a LOT of time and politely leave the dealership. You could try to start over with a different sales person, but often times, if a dealership will hire one slimeball, they're hire a dozen.

6

Shop at multiple dealerships.

Not only to find the best price, but also to find the one you're most comfortable dealing with. You may even find yourself wanting to pay a little bit more because you feel much more comfortable with one dealership over another. That's okay! In the long run - taking into consideration the hassles you may run into with a shady dealer - you'll probably come out ahead anyways.

7

DON'T be fooled by these commonly used (and often untrue) stories salesmen will use to get you to buy TODAY.

1. "I just need one more sale before tomorrow to get that big bonus that I really could use." (Too bad - what does that have to do with me being comfortable during this sale?)

2. "My manager says this offer is good for today ONLY. If you come back tomorrow, I could maybe only offer you half that discount." (You almost surely CAN get the same deal the next day, if the car is still on the lot.)

3. "Just put a deposit down and I can lock in this price for you. But if you don't put a deposit down, the offer is off the table." (They push this "deposit" so you feel like you're committed to the sale. Again, even without the deposit, you can almost surely get the same deal the next day if you just play hardball.)

4."We can't go as low as you're asking - we wouldn't make ANY money on this sale." (Response: "Okay. Thank you for your time." As you get up to leave, they may suddenly agree to your price - magic!)

5."These cars are selling so fast, we don't really negotiate price on them." (Again, as you politely leave, the negotiations will magically begin!)

There are too many of these stories to mention them all. Just know not to take anything they say at face value.

8

Watch out for overpriced add-on accessories that the dealer pre-installs.

Things like puddle lights, door edge guards, and fancy floor mats. Don't let them use these to make you think you're getting a great deal.

Even if you want them, you should be able to negotiate the price of them down, or have them thrown in for free even.

9

ONLY talk about TOTAL cost when negotiating with the sales person.

Do NOT allow them to talk only in terms of the monthly payment price. If you deal in terms of the monthly payment price, even a seemingly small jump in the monthly payment can mean you're paying thousands more overall.

10

NEVER buy anything that the salesperson tries to "add on" at the last minute, unless you have THOROUGHLY researched it and actually want it.

For example - underbody coatings. The salesperson may make wild claims that your underbody will rust away to dust unless you get the coating. Most online sources, however, say it's a waste of money.

So, be equally cautious of ANY and ALL other "add-ons" they try to sell you. If you research it and end up wanting it, you can always go back in later and have the dealer install it.

11

Don't ever let a salesperson make you feel guilty about ANYTHING.

The car buying process is all about YOU, and making sure you get a fair deal that you're comfortable with. They may try and make you feel bad about not buying, about not buying a more expensive car, or even for not buying immediately. They'll talk about their kids needing to eat, the bad economy, etc.

Just remember - it's all about you, not them.

12

If you're financing, ask the dealer early on what their current financing rates are - and check the automaker's website make sure they match.

Even if the sales person quotes you a fair, low interest rate early on, after they check your credit, they may jack up the rate SKY-high without telling you. They'll just come back to the table, show you what your monthly payment will be, and hope you DON'T know what it SHOULD be. So, make sure to ASK specifically what rate they are giving you before you sign anything.

Or, they may make up some excuse as to why they can't get you the lower rate - IE, you don't have enough "credit history." This is usually just a tactic - tell them your bank can get you the low rate, so you'll be financing there instead... suddenly, your light credit won't be a problem and you'll get the lower rate! (This happened to me - my rate went from 4% to 8% back to 4%!)

13

Finally, just because you're done with the salesperson doesn't mean you're in the clear yet - the finance person is often even slimier than the salespeople!

Don't buy ANY extra warranties or insurance from the finance person, unless you've had time to research them thoroughly. They'll try to sell you all sorts junk, and add years worth of premium payments to your loan amount, all up front. So not only would you pay for overpriced warranties and insurance, you also would be paying interest on the amount!

One specific trap is GAP insurance. While it's not bad insurance per-se, it's almost always overpriced at the dealership. Large insurance companies, like USAA, offer GAP-like insurance for as little as $15 every six months - a fraction of the cost at the dealership.