MoneyUnder30.com
MoneyUnder30.com

Ex-Car Salesman Tells All: How to Beat the Auto Dealerships at Their Own Game

One month in auto sales taught me the dealership’s playbook. Here are their secrets.

I once worked as a car salesman. I learned you don’t need a full set of teeth to be a winning car salesman and the nicer a salesman is to a customer, the more that customer overpays. I also learned the car salesman’s playbook. And of course, I’m willing to share. If you want to protect your wallet when you’re buying a new car, here’s how to beat auto dealerships at their own game.

Be Prepared

Even if you deflect the sleaziest sales schemes dealers dish out, you can’t get a good deal without some homework. Don’t step into a showroom without reliability, safety, and pricing information (try Edmunds). You should know the mark-up of the car’s sticker price and how much the dealer expects to profit. It makes it almost impossible for the dealers to bluff when you already see their cards.

Call First

Auto makers and dealers do everything in their power to make car buying an emotional experience. They have you sit in plush new leather, soak up new car smell, and punch the gas and hug the turns on the test drive. The salesmen hope, by the time you talk price, you want the car so badly you’ll okay the first number thrown at you. But, ask for the dealer’s best price over the phone, you axe their edge. Lucky enough to snag a telephone quote? It will almost always beat a quote from the showroom. But be warned: Good dealers will smooth talk you into making an “appointment” at the dealership without giving a price.

Hide Your Trade

If you plan to trade in your existing vehicle, don’t let the dealership know it until you have agreed on the price of the new car. Tell them you definitely don’t have a trade-in and then act like you changed your mind. The reason? Dealers use their profit margin on the new car price to make it seem like they are paying thousands of dollars more for your trade-in. Only when you handle the new car and the trade-in separately can you get good deals on both.

Talk Price, Not Payment

“Payment” is a car salesman’s favorite word—and not just when it refers to his commission check. Dealerships love to quote cars in terms of the monthly payment, leaving the purchase price out of the equation until the papers are signed. In the negotiation process dealers try to lower the monthly payment by extending the loan term rather than cutting the purchase price.

Be Patient

Negotiations are tests of will-power. Who will cave first? Dealerships make you wait to get you dreaming about your new wheels. Why not bite back? Car salesmen’s commissions are based on volume. They want to sell lots of cars fast. And unless you’re shopping for a rare model, there will plenty of cars left tomorrow, but with every day that goes by the dealer will grow anxious wondering whether you changed your mind or found a better deal. Use time in your favor to get dealers to provide even more price concessions.

Go Rate Shopping

You wouldn’t negotiate with car salesmen without the car’s average price; you shouldn’t negotiate an auto loan without information, either. If you can, get your credit report before buying a car.

Apply for an auto loan online or from your local bank or credit union and take the approval with you to the dealership. You may get an even better rate from the dealer. Worried about too many credit applications? True, multiple credit inquiries can negatively affect your credit score. The good news? Credit bureaus now count multiple inquiries within a month as one.

Get Free Price Quotes at Edmunds.com now

Sponsored Offer



ZIP:
About David Weliver

David Weliver is the founding editor of Money Under 30. He's a cited authority on personal finance and the unique money issues we face during our first two decades as adults. He lives in Maine with his wife and two children.

Comments

  1. Sound advice! My dad told me about “hiding your trade” years ago, and it was the best car-buying advice I ever got. Never would have figured it out for myself! You can get a good idea of the value of your trade-in by doing some online research, too. Carmax is a good resource for that.

    • this is a crock you should tell the sales man up front becuse you are tacking on another hour to your stay at that dealership they give you the same amount eather way i know becuse i was an appraser at a dealership this artical writen by David Weliver is just the rant of a scornd man nothing more so if you find truth in this artical you are as dumb as a car saleman who was employd for a month

  2. My Dad also told me about he hide you trade thing. Get a price first with no trade and then come back and talk trade with those numbers. Great advice! Found your post through the Group Writing Project at ProBlogger. My How To is up also.

  3. Good post, I hate car shopping. I love picking out what I want, but hate the negotiating thing…my husband had not one but two aces up his sleeve when we went. I was impressed…he wouldn’t even share those aces with me prior…we hit a price…great rate…very low interest..he was saying no money down, and no extra…we start to draw up the contracts..and he had GM money and big downpayment after they wrote their price down…the look on their face…they were begging us to get the glass etching..anything! Glad I have him on my side! I smiled in my new car all the way home.

    • 1 month? in the business? you have no clue.. This is america, and there is nothing wrong with profit, that makes the economy go around.. and keeps peoples jobs. apparently, you couldnt make it in the car business and you are upset at your short comings…do you have a job now?? amazing..if you do. MADMAC

      • Too funny he’s knows what he’s talking about hahahaha…r u offended lol….I just went to a dealership and they r so fraudy it like wow…. I played their game and won…. treat me like a dumbo ha

        • Its our job to make you think that you’ve won. We’re not all out there to get you

  4. Definitely. DH is in the car business and he’d say the same. Our how-to is up as well if you’d like to check it out!!

  5. Great list! I’m learning a lot of useful things from the problogger project. I’ve been an easy mark for car dealers before, but didn’t even know it. I’m good on the research end, but didn’t know anything about how the rest works. Whew, thank you!

  6. Great ideas. I usually cut through the crap and try to get the best value for my money. As far as I’m concerned, as long as the money is in my pocket, I’m safe and hold the keys. There’s always another dealer.

  7. How about no trade. You will always lose when you trade your vehicle in, instead of selling it yourself- not matter what they tell you. Also, you should always go in armed with your own financing- then you cannot over spend, you know what your payments are ahead of time, and thats where they make the most money off you- F & I. I feel a blog comign on… lol

  8. I went to 5 dealers and dealt with them on the phone. I got a quote from the first one, reduced it by $5 and asked the second one to match it. The kept doing it till I went through all 5 of them. Then called the first one back (now $50) less per month and started over until they started dropping like flies saying that they couldn’t match it. Went with the last one to stay in…..over $100 less a month than the first offer I was given.

    • you wouldn’t be able to do that with our dealership. We’ll never give you our lowest price over the phone. NEVER

      • But it doesn’t matter what YOU do. There is always *some* dealership out there somewhere that will. You don’t get the sale. Simple.

        • d-dawg is correct. I just bought my car and got the deal done over the phone. told em what my creadit was and told em what i wanted and the guy told me he could do the deal. Was 3k less than the same company dealer an hour away. I told the guy if he wanted the sale he had to deal over the phone. he did and he got the sale.

  9. “Do Car Salesmen Go To Heaven” is the best book you will read on the workings of the car business.Its all over the net!!

  10. It’s funny how a guy with one month expirience is a proffessional in the car business now. He has good idea’s, but if you have to hide your trade and stuff, don’t use that dealer.

  11. Its funny how people do not want to pay for what they want. I agree on the interest rates, get as low as possible with your own financing. But if you are looking for a car that is 20grand, and try to get it for 15grand. You are out of your mind. Buy a used one instead! Capitalism, every single one of you would buy a car for as little as possible, but given the chance, you would sell it for more than you paid to your neighbor if they would buy it. This world has problems!

    • Capitalist Pig says:

      Dont like “capitalism?” Then maybe you will like “spreading the wealth” instead?
      Gee, maybe you would rather live with Winston Smith under the Party in 1984. No capitalism and all poverty!

    • That’s not true. I sell my cars at what they are worth or reasonably less if I want a new toy fast. People who think like you are dealers. The majority of us are not like you. That’s why we have an issue with people like you.

  12. Dear Tony,

    The problem is with car salesmen, as a (non-auto) salesman myself, I understand how to creatively massage a deal to provide the customer with a good deal and myself with a good commission. I also know that the nicer the customer, the better the chance of a fair deal for both. The mean customer usually gets a slightly better deal because the salesman strips off the nice talk and looks at it as a quick (but skinny) deal and chalks it up to volume. Car salesmen, on the other hand have gotten it to such an extreme that there is a VERY wide rage of prices paid for the same car, and no-one trusts what anyone is saying. IF they preserved pricing structure, they would all make more money, while selling the same amount of cars, would be trusted more and save themselves, their competition and the prospective customers all the negotiating nonsense – we call it “the race to zero”. They might even find some customer loyalty!

  13. It seems like something is missing, no?

  14. patty magliochetti says:

    car dealers lie to people alot,My husband went looking for a car after his broke down,we have bad credit and have no money to put down.so we went to a car dealer,and he said we will have a car tonight ,call later to found out what time to pick up car.we call back and they said sorry ,cant these car dealers be stopped from doing this

    • you know you cant buy nothing if you dont pay nobody what make u think u going to get a loan. please pay firt what you old and then go look for a car

  15. Gamer10 says:

    Customers lie like crazy and tell sales people, ” I don’t want to play games…”, yet they are generally the ones that start the game! Gimme a break. How many of you have complained about paying for the wrapper when you buy a loaf of bread? Try going to Burger King and telling them,” I know it only costs you 83 cents to make a whopper…I’ll give you a nickle over your costs!” Get real people. Decide what you want, shop around if you must, AND THEN PAY FOR IT! BTW, ever wonder how much the guy in the seat next to you in the plane paid for his ticket? I’ll bet its less than what you paid……why didn’t you negotiate that? You know there are a lot of decent people in the car business. If you can’t find one after visiting several dealerships…maybe the problem is not the Dealerships. Maybe its YOU!

    • Dealerships are full of Pukes. Google Denny Hecker for the ring leader.

    • Amen. Stereotyping has never gotten anyone very far and to classify all salesmen and dealerships to one category is ludacris! I agree with this comment.. You cannot go into Walmart and tell them you want to pay $1 over cost for the gallon of milk and you cannot go to the gas station and expect to pay cost for the gallon. Everyone has to make a profit in order to survive and I wouldnt go into your job and have you work your butt off and expect you to receive minimum wage. Check out the listings on Craigslist and the classifieds. Asking prices on most vehicles are outrageous. Be smart with what you buy but you have to pay for what you want and if you cant afford it then look at something else…

      • Yeah, but you’ll never get talked into buying a gallon of milk for $6,000 over invoice. Car dealers are looking to make as much as they can possibly wring out of you. If you walk in like a sucker, you’re going to pay out the yin-yang. Most of these guys have no conscence, because the way they look at it, if you’re willing to pay it, they’re willing to take it.

      • n kelly says:

        You can if the wal-mart down the street will beat their price.

    • This from the one whose name is “GAMER10″ haha. I have yet to meet an honest car dealer. Although all of them are quick to tell me they are one. psh. They want every dime they can squeeze out of as many pockets as possible. Well, atleast ALL of the several that I have met, and that includes friends who are car dealers. So, NO, I DON’T know any decent people in the car business – you’re wrong. Hurry, rush in to try to save the reputations of the handful of elusively honest car dealers. It IS important to do your homework and know the game of every trained car dealer before walking into buying a car, or else, you walk right into their web. When a 5’2″ 115 lb. woman walks in talking circles around the “dealer” regarding a vehicle they are trying to sell, THEY are the ones who are impressed. It is a bargaining chip, for the GAME. The way you talk, you sound like you are a car dealer trying to sell, er, I mean, TELL consumers to leave their chips at home, trying some jedi mind trick on unsuspecting folks, smh (something like this, “car dealers are honest, pay asking price, it’s worth it” – haha). Yea, your trick worked, NOT! Now, back to studying before I go out to buy the vehicle that is overpriced, from the dealer who is dishonest and over-charismatic, at a lot that is overstocked. By all means peeps, do your homework and DON’T pay asking price. Ignorance in this gets you nowhere but broke. BTW – grocery store clerks don’t work on commission, and neither do fast food places, or else I would bargain over the cost of everything I bought there – just FYI *rolling eyes* poor analogy.

      • Then you haven’t met us. Everyone that sells used autos are not crooks. We put our price on the auto and that’s the price, Period. We know what it takes to stay in business and pay our employees. If you where the owner you would be out of business before you started. So don’t think everyone is out to get you. A lot of dealers still believe in God………..!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

    • You are really right. That was a great way to put it. However, I think that people who sell bread don’t try to jack UP the price before you buy it, to see if they can make something EXTRA off of you. I think that is the nut of the problem. Yes, there are some people who are straight shooters, but not many people that I have come across that sell cars for a living are like that. It’s just that plain.

    • I concur 100%

  16. Gamer10 says:

    And Patty, how in the world do you expect a car dealer to solve YOUR personal problems….Would you loan money to someone with bad credit and no money? C’mon. Car dealers didn’t cause your problems. Now go get a job…

  17. Gamer10 says:

    And Tony, you want us to preserve the pricing structure? Then stop threatening to go to the next town to buy your furniture, your cars and your high end audio equipment. Dude, if we let every customer leave without negotiating we would never deliver anything…we did this to ourselves I know, but customers just don’t feal like they have gotten a good value unless the ‘beat up’ their salesperson. We once had a customer offer a salesperson 100.00 after a deal was delivered and apologized for being a jerk….unbelieveably, she turned it down and said,” If I didn’t earn it before, I certainly don’t deserve it now.”….OUR OWNER GAVE HER 100.00 IN THE NEXT SALES MEETING AND THANKED HER FOR HER EFFORT.

  18. Gamer10 your an ass. Patty wasn’t ask the dealers to fix her life, But they shouldn’t promise what they cant do. And considering that your in the dealer busness you know what I am saying. Plus why are you telling her to get a job? she might alreadt have one. And her post was back in Jan which means she most likley will never read your post.
    But I agree with the fact that people do not need to be jerks to dealers, They need to make money to. But it is good to know some tricks to save a few bucks.

  19. Joe Dasher says:

    I can assure you after having been in the business for over 28 years, customers lie alot more than car salesman. Most of you, the customer depends on your company to make a profit or you won’t get a check. If it was left up to you there would be no profit, but you would still want excellent service after the sale. Get real people!

  20. I’ve went to several dealerships and even had all paperwork completed but when I mentioned the trade-in, they were upset but hiked the monthly payments over $150. However, after several weeks – I reached a deal with a dealership on price vehicle. I showed displayed my credit scores and reports to him (723, 719, 729) from the exp, equi, and trans – he ofcourse ran the report himself and told me I have too many inquiries and the two dealership shopped my applications to ALL the banks – which makes it harder for him evern though your credit score is good – I will need to ‘take a hit on the interest rate (15%) and you can refinance later. I walked out the dealership – is this true? Did I shoot myself in the foot for placing online auto-loans and visiting dealerships and never closing a deal? Please let me know.

    My lease is coming up next month -

    Look forward to hearing from you or someone for insight.

  21. First of all, I’ve been in the car business for 4 years and I just read this. Its all a load of crap! Don’t hide the fact that you have a trade…Sales people (not just salesman btw) usually know that you have a trade even before you supposedly surprise them! Obviously, you didn’t walk or ride your mountain bike to the dealership. Yes there are sometimes when you are buying a car for the first time or adding a 3rd car to the family but for the most part, most people have a trade..Plus, you should drive the car before you get to numbers not so you can fall in love with the car (we don’t care about your emotions) but just to make sure you like the way it drives and handles before you get to price. Why waste your time and the sales persons time if you don’t even like the car. Plus you are spending a lot of money and you want to make sure you are buying something you can live with for awhile. Thats why you should test drive the car before you get to numbers. And to the people with bad credit (like Patty M) Its not the car dealerships fault that you don’t pay your bills on time and have bad credit. Finance managers try to get people approved but it could take a few days to get this done and they are at the mercy of the banks so its not the dealerships fault..Here is a thought, PAY YOUR BILLS ON TIME!!!!!!!!!!!!

  22. This is the funniest load of crap ever, and it’s true, how are you a pro after a month? haha
    I like how people always call the dealer liars and trick artist, when a ton of customers go in every day and bluntly lie to a salesmans face about a ridiculous offer they got at another dealer. If it was so good why didn’t you buy it there after your 5th stop and nobody could do it? Also if you have bad credit and you know you have bad credit and you are looking for a certain payment, please oh please do not negotiate on the most expensive vehicle on the lot. A salesperson does this for a living, not to waste countless hours of their time because you are too stubborn to realize your credit situation doesn’t allow you to get that leather interior.
    As far as shopping rates, Give your credit info to every dealer and believe me, you will be financing at a way higher rate than the first dealer you went to because everyone submitted your info, and don’t think just because you have a 700+ score that you can buy everything you want. A credit history of just a credit card with a $2000 limit for 2 years won’t get you that lowest interest rate on that $30k car. Heck 9 times out of 10 you need a cosigner. If you are on a budget Be up front to your salesman, tell them exactly what your budget is, and they will find you the vehicle that fits your budget and actually try and help you.
    AANNNDD…
    PAYING CASH DOES NOT MEAN YOU CAN GET A LOWER PRICE ON A VEHICLE. Countless people throw out the ” oh im paying cash, can you lower it another $2k?”
    NOOO.
    Just because you pay cash, doesn’t mean the cost on the car is going to lower. The Cost will remain the same!!!
    Happy Shopping.

    • BEHONEST – Your obviously a salesman or saleswoman or share some kind of kindship with one to have such a ignorant way of looking at this. There should be no shock as to why Customers are weary of Car Sales Reps. They have been known to Lie, Mislead, Decieve and sometimes Con someone into buying a vehicle for more than what it’s worth. This is a FACT! It’s happening right now at this moment while I type you this reply.

      This article is not bashing on Car Salesman, it’s simply giving a tool or guide to be better informed. Knowledge is key in any situation.
      And to those who are using bad metaphors like “The car lot is our office. What if someone came into your office and ignored you?” My answer: that wouldn’t happen because this is a OFFICE! This isn’t a market where goods are being exchanged and deals are being wheeled here and there. In an office I’m not selling anything so your using the wrong metaphor. It would be better if you used something like a market atmosphere like a Grocery store. And the same thing applies, no customer likes being bothered while they look at the merchandise deciding what they would like to pick. Which is why most Grocery employees don’t bother customers..because they know this…unfortunately dim-wits like yourself are clueless to this simple fact.
      And Yes, some customer do in fact play games and there are car salesman who do no take you for a ride…financially. ha-ha. But they are few and far between. The cold hard truth is something you need to get a big wiff of and that is that Car Salesman are like any salesman…they’re out to make that commission because that’s there bread and butter. It’s so much better when they’re not on commission because it cut’s out all the hogwash.

  23. Buyers are the liars..we all know that. They waste salespeople time,dont want to test drive,dont want to give their phone number, and half the customers have a bad attitude. Picky people with bad credit is another one. Your options are limited if you have bad credit. The lot is our office folks. What would you do if I walk into your office and not even acknowledge you are there. Customers do this a lot. They run away from the salesman and many times are rude.

  24. I like this article. I work for my Dad who owns a car dealership and I have worked here for a decade. I agree with both sides. There are Dealers out there that are out to get a quick sale, tell the customer whatever they want to hear, and deal with the problems afterwards. That is WRONG! BUT, for customers to assume all dealers are the same, is ridiculous. I love when I spend the time to try and connect with someone and figure out what is their best option based on their scenario, then about 2 hours later of hard work, they tell you you’re out to lunch on pricing, all your cars are repaints, they are previous rentals etc etc. People assume dealers don’t know there own product, far from it. If you feel that way, fair enough, but do some homework prior to going to a car dealership and throwing out ludacris comments that don’t make any sense. I love the opportunity to find anyone the right car, but I don’t hesitate to walk away from a deal if I don’t like the taste in my mouth, we don’t have to sell you a car, there are plenty of other buyers out there looking for a great experience, salesman want to enjoy the process as well. Next time you go looking for a car, find out if the salesman are flat rate commission, get a carproof, and please for the love of god, tell us you have a trade! We will lower our commission to close the deal and when you throw in the trade, you will hate the trade value, because the OWNER not the SALESMAN determine its value so we can recoup some of the profit that was supposed to be made on the car. Our job is our livelihood and for people to say we are liars and cheats is a horrible feeling. Next time you go to buy a bed, or furniture or anything, give the person who is trying to help you the cold shoulder and a rude remark and see how long they hold their tongue or their patience. I guarantee no where near as long as car salesman have to!! Happy shopping everyone! P.S. after one month in the business, you know nothing about the business! I have been in it for a decade and am learning things everyday, its a process that takes pain staking years, not a month!

  25. Hiding the trade is great advice. But a better one is try to sell the car on craigslist the dealers will not give you to much for your trade. You will have better chances getting what you want if you bring the buyers to you.

    Thanks!

  26. I still love the whole hide the trade deal,lol. Salesmen are liars….Well is the customer just beating the salesman to the punch then? Any salesman worth his salt acts as if there is a trade on every deal…Remember you want to be treated with respect and not to be lied too,correct. Well then you should do the same! 12 years of automotive sales exp. and still going..A good deal is only a state of mind!

  27. Instead of wasting your money on some “ex car salesman book” go online and educate yourself! Edmunds , KBB and NADA are all good sources they show you what a fair deal is to you and the dealer! Keep in mind the dealer needs to make a profit to stay in business, employing usually 50-100 people paying high taxes and one of the largest donors to charitable organizations in YOUR community!!! I’ve seen way too may times a person will drive 2 hours to save a hundred dollars not even giving the local guy a chance! Dont confuse paying a profit with getting taken on a car deal!

    • 2/8/11: I’ve recently done my homework and went to battle ready with a fresh credit report and “Hid my Trade”. I got to a fair price on the new car and then sprung the trade on them.
      The salesperson looked annoyed, the sales manager disappeared from sight and I was offered $2000+ below the trade-in price quoted in KBB and NADA. They refused to acknowledge the data I brought and told me I was simply incorrect. My car has LOW mileage is super clean and is well maintained and optioned. They always focus on what your car DOESN’T have and just refused to offer a fair price for my trade. This happened at about 6 dealerships in my area.
      I still have the car.

  28. The Oil Barron In Training says:

    Another good tactic that I did not see while skimming is when to buy a car. One of my best friends was a car salesman all through college and he let me in on this. As mentioned above, salesmen get paid by moving quantity and a small commission on each sale. So to give them a stable flow of income most dealer employ a “wash”. The pay their employees a set amount at the beginning of the month. Then as they sell cars their commissions are paid back to the dealership until they “beat the wash” aka paid back the dealership, and then everything beyond that is their to keep. In the interest of increasing profits, dealer usually set high numbers for each sales man.

    Why is this important? You want to buy your car at the end of the month, especially on the last two days! Most salesmen are usually still trying to beat the wash and eager to sell, and sell fast. The upside for the
    buyer is two fold:
    - the salesmen needs to sell that day. The tables have turned!

    - they won’t waste as much of your time because they need to make multiple sales in a short time!

    If you can put on a good pokerface and tell them “I don’t need the car today. But if you bring me your best price and don’t waste our time, then I am willing to deal. But, waste my time and I will find some else who will not.”. I have used this technique several times and it has always worked well.

    Also as to see the dealer invoice for the car. They will bring you the MSRP sheet. Then tell them, no I want to see the dealer invoice ( what they actually paid). Then be rational, they are not going to sell a car for less than they paid. Make them a reasonable off like 500 or 1000 over invoice. If they say they can’t do that then walk towards the door. Before your hand hits the door they will stop you and fold like a cheap lawnchair.

    • Thanks for the great input I will use it! I was just wondering if I would ask for the dealers invoice will that stop them from making up an invoice with a fake dealer price? I want to say I went through this with a Ford Dealer on a F150. At then end I just got some extras for free and the 0% APR for the loan.

      Do you have any suggestions on the extended warranty? I don’t think there is a basis price for warranties. Heck for all we know they double the price and by the time you get them down your paying at full price, and you think you feel good because you think you got a deal? Thanks!

  29. The Oil Barron In Training says:

    It would be pretty hard for them to be able to make one up on the fly. As far as extended warranties go, most have a preset cost and some are from outside companies. Again, consider it part of the cost and therefor part of the negotiation.

  30. I can tell you all as a lifelong car guy from a lifelong car dealer family, do not take car buying advice from a guy who sold used cars for one month. The shady practices of old are all but gone with the FTC regulation of the car business and the advent of the internet. Todays car buyer is more educated than ever and anyone can get a good deal if they do a little homework. It’s funny because we have a saying in the business that “buyers are liars” and I can tell you from many years of experience that it is true. “Hiding” your trade does not help you in the least.

    You want to get a good deal at a car dealership? Here is my advice. Do your homework and figure out what you can afford before you go. $350 a month does not buy a $30,000+ car. So don’t waste your time. There is not a car dealer in the world that can defy the laws of math. Be truthful and upfront about your intentions. Believe it or not car buying is not a game (as the author mentions) that has an imaginary code to crack like many of you believe. It’s a major financial decision that most dealers want to help you make wisely. Remember that where you buy your car is very important. I would always recommend buying a new or used car from a franchised new car dealer. You are also going to get more professioanl sales people at higher end stores than you would at lower end stores. Like shopping at Walmart vs. Barneys NY. I can tell you we are here to help and there are many many many good, honest people who make their living in car dealerships across America. That being said there are also many bad ones. If you don’t like the way things are going all you have to do is leave. There are no shortage of dealers who would love to earn your business and go about earning it honestly.

    One more little secret is that it is far more important and profitable for a dealer to retain you as a service and parts customer for the life of your car than the initial sale of the vehicle. If I had my choice to sell someone a car that will never be back as a service customer or gain a service customer who just bought their car elsewhere I’d choose the latter all day. Contrary to popular belief, profit margins on new and used cars are smaller than ever. Sales People and Sales managers in most stores are paid on the profit margin between “invoice” and MSRP. “Invoice” does not represent what the dealer bought or owns the car for but in most cases is it what the decision maker gets payed on. So unless there is advertised factory incentive money don’t bother offering much under invoice because the answer is usually no. We are in business to make a profit after all.

    Next, lets talk trade-ins shall we. Your trade-in has no bearing on what we will sell you a car for and in some cases we don’t even want your trade. It also does not matter what Edmunds, KBB or any of the other “expert” sites told you your car is worth. None of them actually buy or sell cars, dealers do. There are also significant reconditioning costs that go into making your trade in legally and desirably re-sellable. We have to pay people to remove dents, replace tires, fix and replace cracked windshields, remove smoke smell, clean upholstery/carpets, paint scratches and smog and safety check the cars. Do dealers offer less for cars than private party buyers? Yes. But we have to recondition the car and offer it at an attractive enough price to attract the next buyer. If we paid you retail blue book value for it then paid to recon the car we’d own it for over retail market value and therefor have to ask over market value for it. Not only will a customer not buy that car but the bank won’t buy that loan because of the loan to value. So don’t be so surprised next time the dealer offers under wholesale value for your trade. If you’d like to sell your car privately that’s fine. But keep in mind you will have many yahoos come to your home to look at it and we’ve all hear the horror stories. Sometimes the convenience of a trade in at a dealer can offset your lost revenue from the sale. We also do all of the DMV work for you.

    That’s my two cents. Be honest, be nice,be forthcoming and you should have a good car buying experience. Don’t waste your time with a sleazy salesman. Chances are there is a good dealer and salesman right down the street.

  31. Take advantage of dealer incentives and rebates. Right now I’m buying a new truck. MSRP-$32,950; Price from the dealer- $26,955. Getting $7500 for my trade-in which is more than what KBB valued it as.Putting $1,000 down. After all the taxes I will be financing 20K. 32K down to 20K = Awesome. Talked to numerous dealers and it came down to the guy who listened to what I had to say and who found the truck I wanted, not the the one he wanted to sell me.

    the only question I have is that I’m having to wait for the truck to arrive from the factory and from processing..is it possible to get the dealer to throw in free options (window tint for an example) because I have to wait a week?

  32. learning says:

    I bought a car last year & paid wayyy overprice for it. The dealership has been nothing but rude to me & has treated me like a dumb girl everytime I go in for maintenance. I’m currently trading in my car at a different dealership for an upgraded model of my current car. The salesman said they could give me 9k for my trade in & no more even though I still owe 12k. After a days wait they bumped it up to 10.5- I only walked away because it was to late in the day to continue. I’m a nice & sweet girl & walked into the dealership w/ the best of intentions but I feel completely taken once again. I’m going to shop around, be reasonable but at the same time if they bought the car for 10k & put 600 into it, no I’m not going to pay 16k for it & then another 4k for all the “extra fees”. I’m all about profit & economy boost but there comes a point where its plain stealing – simple as that.

  33. I’ve been in the business for 10 years and i must say that I have heard it all. First off, these days it is so competitive out there and I am aware that people are educated on there car buying skills before I greet them. So, I do not treat customers as dopes as most of you may think. Customers always say they dont want to play games, but somehow thats exactly what happens. they lie and lie about there quotes, meanwhile I know that we all pay the same invoice for these cars. So when they say they got a quote for 1500 under invoice elsewhere and I ask to see it in writing…they get offended..lol..such a crock of bull. I do what ever it takes to earn someones business, which it why i have a client base of over 1500 repeat buyers. Ive worked with the scum of the earth and I wont deny that they arent everywhere, but to act like all car salesman are the same is just ridiculous. There are true professionals out there that are fair and deserve to make a profit because they give you the ultimate car buying expierience. So do us all a favor, and stop your BS. If you want something, than educate yourself on what the range is of what the car is going for and stop nickel and diming the salesman that truley wants to earn your business through knowledge and superior service. Remember, your car salesman has a family too and everyone has to eat! For Patty….You have no right demanding answers when the truth of the matter is that no bank in their right mind would finance a pack of wrigleys for you. Dealerships do everything in there power to get bad credit approved or else we wouldnt be in business. Try having a little patience…it does take days to get a loan approved when the credit is bad. Thats the problem with 500 credit scores. people expect the world, but dont want to pay for it. Pay your bills and live within your means and stop buying overpriced vehicles if you cant afford it.

  34. I meant 150…not 1500..

  35. This is hilarious! People, pay attention! The best deal that can be made at anytime will be the best deal. No dealer is going to take a bath on any of it’s inventory. No consumer is ever going to get an Escalade for 20k, and bad credit is bad credit no matter how you try to present it. If you have bad credit DON’T try to buy a car. It will kill you financially. You are at their mercy when you have a poor credit score. I agree with some of the sales types, quit trying to get a bentley on a yugo budget! that dog won’t hunt!

  36. Why do we put up with this archaic way of doing business? When will our statesmen approve a one-price-for-all policy? When will our representatives secure a 3-day return policy for used or new car purchases? Why is it that I can buy a toaster and return it if I want to, but a car dealership is protected by state law? Even if they lie, cheat, screw you, or push you and the car off their property, it’s yours. This is heinous! Wake up everybody –make this an election issue. The internet is overflowing with sad tales of thousands of dollars lost, and no one will help the consumer? Bull! Start now by calling your state representative or congress person–we will all benefit.

  37. This is ridiculous…. I’m all for people getting a good deal on your purchases, but a lot of what a lot of you people are saying is ridiculous. Let me ask you a question, you buy this pretty brand new car and you have a problem… Yes it’s fixed under warranty, but what if you had to drive 2 and half hours to get it fixed? If you take all of the money out a dealerships pockets, how can they keep the lights on to serve you in the future?? Scenario #2: I want you to go to work, whether it be a factory job, sales job, etc…. Deal with the most difficult customer/client/whatever for a long and tedious time, then not get paid or get paid far less than usual for the time spent. How do you feel? Now those customers/clients/whatevers are being taught how to make every day you have like this…. How is your job now?

    I don’t know when you were in the car business, but I know that 1 month won’t teach you much except the basics. There are honest dealers out there. If you want one ask around. The dealership I work for, Dave Arbogast Buick GMC, has a great reputation and plethora of repeat business. We always go for the best interest rates, offer all the incentives we can (including dealer cash that you aren’t even supposed to be told about), and automatically give all customers the GM Preferred price (formerly GM Supplier Pricing). On top of that you get free car washes for life! If everyone tried to take every penny out of our pockets we’d have to shut our doors.

    A lot of car dealers don’t play games and we just ask the same!!

  38. HAIRY CLAM MEAT says:

    Here is the bottom line. If the MSRP is over $20000 Take the MSRP and subtract $5000. Then take the NADA trade value and add $1000. Example my 2005 Civic trade value is $3800 and the 2012 Civic I want is $24,750. Take 5K off sticker – that is $19,750 – then subtract your trade value plus $1000 which is $4800, the remaining figure is $14,950. That is where you start – you can buy the car for $1000 from that figure with your trade. The dealer will tell you impossible but mention the dealer incentives & holdback & 25% markup that you are aware on the MSRP. If they don’t take your offer, walk. They will call you in a day or 2 to re-negotiate. I did it twice- worked both times. You see the guy before you and the guy after you will pay full sticker price so they will make up the difference on them 2 suckers. Your sale racks up points on their numbers game which gets them millions at the end of fiscal year for quantity of cars sold. (That is the Dealer Incentives) . Give it a try, if you don’t get the deal I’ll buy you the new car.

    • You’re an idiot….. there is no way that there is $5000 in markup in a civic. FYI, there is $5129 in markup on a $61k GMC Yukon Denali…..

      and for hold back…. Lets talk apples to apples here. I sold Mazda’s for a while. Mazda 3 iTouring with Moon and Bose Package, a great car. MSRP $21140. Invoice is $19876.11…. $1300 in markup + $208 in hold back. So if you walked in and wanted $5000 off plus an extra $1000 for your trade, you’d never hear back except maybe on a last push to get you to think rationally. Most dealerships that move any nice amount of cars won’t take that deal because it doesn’t make any sense to do so. How does it make financial sense to lose that kind of money on a car?? Trust me, I wish the markup was as much as you think it is, I’d be making a hell of a lot more money than I am. Most car salespeople are paid 25% of the front end gross profit on a car deal, and the average car salesman averages $262/ unit. Obviously sometimes you make more, but to put things in perspective that means most cars are sold about $1048 over cost. I personally have never seen a manager take less than a few hundred under invoice for a deal at either of the 3 dealers i’ve worked for,

      Post your contact info buddy, you’re going to be buying me a car….

  39. i bpught many cars thru one dealership and the same salesman
    kenny the sales man would call me and tell that a car is comming in from a trade
    with low mileage and no more than 3yrs yrs old
    every thing is done over the phone he is honest and fair i even went to son wedding and holidays events
    i have sent mant people to buy cars from him and he treated them good
    he even send me $50.00 for poeple that sent to buy a car

    so not all car sales men are not robbers