As much as cars can be a PASSION for some people, they’re also very clearly a business. And salesmen know just how to get you on the path to spending more and driving home with less. Below you’ll find insider secrets and tricks that salesmen employ to get their commissions up! Keep an eye out for these.
1/11 Be Careful What You Say
During negotiations on price they will need to take a call and leave you in their office to discuss while they take the call elsewhere.
Reality...he just put the phone on speaker and is listening in to your conversations from the outside phone.
2/11 They’re Only As Smart As Your Phone
As a former car salesman, our greatest fear was your smartphone. If we gave you a number and you had a smartphone in your hand with Autotrader or some other site pulled up, we were neutered.
Also, salespeople have little to no power. The sales manager is the person you want to speak to. As a basic salesman, I just want the sale no matter what. The manager is actively keeping us both from what we want.
3/11 Salesman Aren’t Even The Real Enemy
As a former car salesman, it's the sales manager that makes these decisions. You won't believe how many times we were told what to say to a customer. I started hating myself. I even started smoking and my anxiety was through the roof. I got fired because I wouldn't get a customer out of their car to come inside.
4/11 I Thought ‘Four Square’ Was A Children’s Game?
This isn't so much a "don't tell you" thing as it is a word of warning:
If they draw a box and divide it into 4 quadrants... LEAVE.
5/11 Death Of A (Creepy) Salesman
I used to be a car salesman, I was 23 at the time. Most of my clientele were people around my age or younger because none of the other salesman gave them the time of day. Well they did to the women... but not to their faces.
6/11 That is NONE Of Your Concern!
NEVER answer the question "how much do you want to spend per month" - You are basically saying you don't care what the final price is, or the interest. If you say "I want to spend $100 a month" they will sell you the pinto for $45,000@ 30% interest with a 50 year loan.
ONLY tell them what you want to pay for the car. The monthly payments are then calculated off that amount, factoring in down payment, length of loan and interest rate.
7/11 Reduce, Reuse, Recycle
I have a couple of buddies who are new car salesmen and here's the thing they really do NOT want you to know: You can buy a late model used car for a lot less than a new car and get a much, much better deal.
8/11 Study For It Like An Exam
Former car salesman here:
Print out an appraisal of your trade in from both KBB and edmunds. Be honest with the assessment.
Now print out an appraisal of the desired used car, from both KBB and edmunds. Wait until they give you a written offer on the trade in as well as a price on the car. Chances are they will value their car at KBB (which is always inflated) and yours at Edmunds (much more realistic).
Show them the quotes and explain to them how it's not very fair to for them to quote KBB for their car price and yet for some reason they won't use KBB to value your vehicle. Serve them the Edmunds suggested retail price and tell them to match it as best they can.
Ask them if they plan on re-selling your vehicle or wholesaling it. If they plan on reselling it there's more room in the trade in price, since they are the ones appraising and paying for the car. If they are wholesaling it, most of the time they can only offer what a buyer is offering.
If the revised price of their car and the value of your trade in are really good, take it. Most of the time there will still be wiggle room, don't be afraid to thank them for their time and then leave. They will almost always call you back. Another thing you can do: When you are looking online for used cars, if you see one you like, print off the page and write the date you found it on. Dealers won't tell you how long they've had a vehicle on their lot, because the longer it sits there the less bargaining power they have. They hate it when cars sit around for a long time (6 months to a year) and will start to be more willing to move the car for less if they're sitting on it. You still need to show them you know this information or they'll deny or try to re-direct conversation.
Make sure they show you a CarFax of both the vehicle you are buying and your trade. You can to check to make sure that:
A) The vehicle has a clean title
B) It has not been in any accidents
If it doesn't have a clean title, I don't recommend buying it unless you're paying in cash and can actually perform work on the vehicle. Getting financing for a car with a salvage or similar title is really difficult. If it has an accident, you can use this as a negotiation point. If it has frame damage or an airbag deployed this will strengthen your position.
Always ask them to show documented proof of any repairs to the vehicle done as a result of accident damage. The CarFax for your vehicle is important, because they will jump at the opportunity to use a documented accident to de-value your car. Make sure they can show proof. That's about all I have for now.
9/11 The Trap Of The Four Squares
Ex car sales guy here. It's been a few years, but I've got some stuff:
When that little four squares box its out on paper, notice how the box of the total price never really gets changed.
Its also better if you buy a two year old vehicle under warranty, by a long shot, but the loan will be at higher apr. Get pre approved through your bank to check the numbers.
More money is made on used cars being sold.
Ding insurance and scotch guard service is a rip off.
Buy wheel upgrades later.
We're screwing you on your trade in if it's in decent condition.
Staying silent and waiting for you to speak is a tactic that gives us an advantage so be aware.
Sometimes our apr rates are better than your banks.
You really shouldn't buy a new car if you can’t put money down unless it's 0 apr and it will be paid off by the time it increases.
The percentage of cash gotten to us is based off how many cars we sale that month, so always go into a lot the last week of the month and during the day Monday through Thursday. String them along and make it take forever. They will become more desperate to make the sale. They don't want all their time wasted and they want the sale to get them bumped up the the next tier for their monthly percentage. They might get 10 percent of profits from their sales of 1 to 5 cars sold that month, but if they sale 6, they get 15 percent on all of them. 10 sold can get them 18 percent etc.
Almost forgot. If you're having your car inspected for trade, or traded, they will get your keys from you. Often times they will dump the keys off at their managers desk to "trap" you there until a deal is made. Get your keys and possible trade in car back before you sit at a desk to make a deal so you're not stuck there while they "go get your keys"
10/11 The Only Way To Save?
The one thing I've seen car salesmen fly into a rage over is comparison shopping, where customers call up and say they have other offers on a car, what's your best offer... and basically the customer actually makes the dealer give the lowest out-the-door price they're willing to, or the customer never even comes in and gets in a high pressure sales situation. Salesmen have to do it in a lot of situations, making a sale is more important than maxing out profit, but boy do they hate it.
Since I never see them rage against other car buying tactics that supposedly save money, like people who come in at the end of the month or right before the end of the year, and I've used the tactic myself for the best deal I've ever gotten, I really think that aggressively comparison shopping is the one technique that really saves you money.
11/11 Laying Out The Tricks Like A Pro
I sold cars for about 2 years - starting at Mitusbishi, and ending at Mercedes-Benz. I'll tell you that I'll take Mitsu customers 100 out of 100 times. Screw social climbers. I was fortunate, because I had a GREAT General Manager, who empowered his sales people to negotiate price. But his thing is, if you've got a price customer, there's not much you can do to make them happy. They'll shop you, and if you know how much you have in the car, that's your bottom line. Anything you do above that is the gross profit, and it's YOUR responsibility as a salesman, to make that money by selling the car. If you want to "drop your pants" or basically give the car away for nothing, that's fine - just don't expect to make any money on it. It's a "mini-deal" or basically, $100. If that's all you care about, cool. But price shoppers are inherently disloyal, and often dissatisfied with the car. Remember - you're a salesman - your job is to get people the RIGHT car, and make sure they're happy about it. See, the thing is, there's a technique called PACERS - which any decent salesman will tell you about. It's basically finding out from you, the customer, what you want in a car. A lot of people come in on the sports car, and leave with a sedan, because it's really what they needed for their lifestyle. They may come in on an SUV, and leave with coupe. It's because you asked them questions. If they made up their mind before walking in, it's up to YOU as the salesman to find out. If they've been to other places, if they've shopped around, if they've already been given a number - YOU have to find out by asking questions. Too many people rush right into the office before actually finding the right car. Payment shoppers are actually one of the easiest people to work with. They know what they can afford, and the rest is just helping them fall in love with their purchase. If they're going to be stroking a check every month, it's gotta mean something. So you spend the time. At least an hour. Maybe more. You're asking questions constantly, and measuring their enthusiasm. You have your primary, your switch car, and your alternative to everything else.
Here are the tricks that we're taught:
NEVER SHOW MORE THAN THREE CARS. YOU WILL WEAR THEM OUT. (Customers, if he's hopping you from car to car, it's because he's not paying attention to you)
Use the numbers. With good credit, every $10,000 equates to a $200 a month payment. So if you've got a $20,000 car, it's generally a $400 payment with nothing out of pocket for 60 months. You can extend the terms to drop it, or put money down, but that's your basic benchmark. If they have poor credit, it goes up. If they have terrible credit, manage their expectations. DON'T BLOW SMOKE UP THEIR ASS. People hate being lied to, and if you're doing that as a salesman, you'll never last. Slash and burn works if you have no integrity and never expect to get a repeat customer again. I can tell you that if you're up front with someone, even if it's not something they want to hear, they WILL come back to you with a parachute to make the deal work, whether it's a trade, some money down, or a cosigner. The fact is, you are not just selling the car, but yourself. Be a product they believe in.
People who shop on the internet are not stupid, but they're also not as smart as they think. You have the invoice price. Great! I do too. Wanna see it? I'll show the actual invoice. See the gross profit? It's 1.5%. That's it. The dealership makes "hold back" which is about $300, but they pay taxes on what they call "the floorplan", which means that the longer a car sits on the lot - the more money they're losing. So if you want to work strictly from a numbers game, I have no problem doing so on an aged unit. My manager will love me for blowing out a car that's been on the lot for 200 days. He'll throw a parade. It's a mini for me, but I just stopped the bleeding.
There are things called stair-steps for all salesmen. On new cars, it sometimes comes from the factory. On used, or a mixed lot like I used to work in, it can be either. The fact is, I'll take a mini on a new car to make the $400 bonus for the stair step. The gross profit is not the only motivator. Usually there is a board showing sales - if you're a customer, LOOK AT IT. THIS IS YOUR ACE IN THE HOLE.
On new cars, know your rebates. Research them. Ask the sales man. If he says there are none, confirm on KBB.com. There are education rebates. There are military rebates. There are brand loyalty rebates (all very common with Mitsubishi). Take advantage of them!
Four squares are for suckers. Ask for a linear breakdown. Full disclosure. If he's closing you on a price, ask for the line items. If he's closing you on a payment, ask to see the math. If you're a cash buyer, you are a god and deserve to have your taint licked. You are my favorite people in the world.
If a manager is letting you go, he's going to "blow your foot off" before you leave. That means, hit you with a price or a term that's ridiculous, to make sure that you can't "walk to another dealership". So if you do go, and you make it to another dealership, you tell them what he told you, and they either drop the price to match / beat, or tell you it's not possible. This is a game that dealerships play against each other. It's not personal. You're just the way they f*** with each other. USE THAT KNOWLEDGE TO YOUR ADVANTAGE. Don't lie, but understand that if the manager is dropping his pants, he's ready to deal and there's no going back.
Be prepared to spend 2 to 4 hours shopping for a car, per lot. If you only budgeted 30 mins, you're not going to get far. Paperwork alone takes about an hour, and that's if you're a god and there's no one ahead of you.
There are actually two salesmen you'll deal with. One is the guy on the floor, the other, is the F&I manager. He lives in "the box." Some places like to close deals in the box, because they think their sales people are weak dicks. Some places let us on the floor do everything, and just let him do his thing. Either way - the dealership makes money off the financing, insurance, all that jazz. This is called "the back-end". Most interest rates are .25 to .50 less than what they're selling you. You can negotiate this! Please do! This is called "holding points".
If you feel like you got a good deal, liked who you worked with, and felt like you were treated well, SUPPORT THAT SALESMAN. It's a 75 / 25 douchebag to awesome guy ratio. The 25 percent need your loyalty and repeat business. They need your referrals. And you need to make sure that they are the successful ones, not the ones who slash and burn. They usually blow out in 3 months. The lifers go in a 4 to 6 year cycle. If they make it that long, it's because they're DAMN good. Please make sure they stick around.