Back in my early twenties, I had such a comically bad day at a car dealership that it motivated me to develop a side gig helping others survive the car buying process.
To date, I’ve helped about 100 people in acquiring a new car and getting a great deal at the same time. I typically save them a few grand, but more importantly, I step between them and the dealers’ most insidious sales tactics.
Are car dealerships really that bad, you ask?
No, I’d say 40% of the dealerships I’ve worked with are honest, professional, and efficient — and I cherish them and send clients their way all the time.
But the rest of the time, I end up intercepting multiple sleazy sales tactics that would’ve cost my clients thousands.
And now that it’s a sellers’ market — and the sales team is viciously vying to sell what little inventory they have — the tactics are getting nastier.
So, if I had a loved one walk into a car dealership without me, here are five things I’d want them to know first.
What’s Ahead:
1. Try pre-negotiating a purchase price
If you walk into an auto dealer without a pre-negotiated price, you might as well be Bambi’s mom walking through the woods of West Virginia.
I know that’s a grim analogy, but seriously — if you walk into a car dealership without a predetermined price, you’re painting a target on your back for all kinds of psychological artillery.
To their credit, most dealers will negotiate with you on the phone. It’s not their preference, since it’s easier to manipulate you in person, but they’ll do it.
Simply pick out a model you like from their online inventory, and ask for their best out-the-door (OTD) price (more on that in a minute). Mention casually but confidently that you’re simply calling around multiple dealerships to get the best OTD price.
That will likely get you a better deal.
Source: Tenor.com
If a salesperson refuses to discuss pricing over the phone, kindly ask to be transferred to someone who will.
If nobody at that dealership will discuss pricing on the phone, they’re basically admitting that it’s their policy to manipulate customers onsite.
Yeah, no thanks. Call another car dealer.
2. Flip the script in negotiations
When you’re on the phone discussing price, they may emphasize monthly payments — not the actual price of the car.
Dealers do this because it sounds cheaper, and the opaqueness of monthly payments gives them the opportunity to slide in more costs.
For instance, instead of saying: “The moonroof option costs an extra $1,300.”
An experienced salesperson will say: “You can add a moonroof for just $21 a month.”
Oftentimes, you’ll hear this old chestnut: “How much are you comfortable paying each month?”
Your response to anything mentioning “monthly payment” should be “let’s focus on the out-the-door price, thanks.”
3. Stay fixated on the out-the-door (OTD) price
So what’s this “out-the-door price”?
Some context first:
Car dealerships aren’t carmakers. They’re totally separate businesses and they often don’t even get along.
Case in point, dealerships are gouging customers with dealer markups in 2022. This causes hair-pulling anxiety for carmakers because it tarnishes the brand and sends car buyers into the arms of the competition.
Worse still, carmakers aren’t seeing a penny of that profit; so it’s a lose-lose for them.
Car dealers when they hear the manufacturer’s suggested retail price | Source: Giphy.com
Now, dealer markups certainly aren’t new. Even the Nissan Sentra sold for a markup in 1984.
However, there’s a new tactic surrounding them that I want you to be aware of.
Believe it or not, a dealer will agree to a “price” with you on the phone. Then, when you show up to buy the car, they’ll tack on thousands, sometimes tens of thousands of dollars worth of ridiculous fees. Things like:
- “Market adjustments” aka greedy dealer markups.
- Pointless extended warranties.
- Overpriced extras (a $75 ceramic coating for $1,000, a bogus “GPS tracker”, etc.).
I mean, I guess this tactic works for them?
I guess somebody saw $12,000 worth of these “gotcha” fees and went, oh, you rascal, you! And just signed on the dotted line.
Otherwise, why would they pull these shenanigans if it never worked?
How dealers think we’ll react to $7,823 worth of last-minute markups | Source: Tenor.com
Either way, these “gotcha fees” are why you always want to talk in terms of the out-the-door price. “OTD” is dealer-speak for the absolute final price for you to drive it off the car lot — inclusive of everything: tax, tag, title, and all the other silly charges they try to save until later.
Plus, once you get an OTD car price signed by the sales manager, you now have something to bring to other dealerships and ask:
“Hey! Can you beat this number?”
4. Dealers will play mind games
A few months ago I got a call from my friend Kayla who was car shopping and already at a GMC dealer in town. She’d arrived unarmed — without a pre-negotiated OTD price — and soon realized she had made a mistake.
So I jumped in my car and arrived at her dealer within minutes, happy to help — but also harboring morbid curiosity for which common bad deal tactic we’d be hit with; especially since women get treated worse and pay more at dealerships.
My answer came quickly.
The salesperson who was helping her had apparently vanished over an hour ago. Worse still, he’d taken the keys to Kayla’s trade-in, leaving her stranded.
Kayla just assumed they were backed up appraising her current car. But we were the only ones in the showroom, and most trade-in appraisals take 15 minutes.
I explained to my poor friend that we were just getting hit with a classic, two-pronged manipulation tactic:
- Take the car buyer’s keys so they can’t leave.
- Force them to wait, running out the clock and lowering their defenses.
Once again, I’m astonished that this tactic ever works. But it must, or else they wouldn’t do it. Anyways, I whistled my way over to the receptionist and politely asked for Kayla’s keys back.
“Y’all need to be patient,” she snorted. “They’re back there looking for them.”
“Do you think the police could help? They’ve got flashlights.”
Kayla’s keys then magically appeared within 30 seconds and we left the dealership soon after.
Three days later, I helped her get a Mazda CX-5 from a good car salesperson buddy of mine who has, you know, respect for her customers.
5. If you feel uneasy for a second, leave
Needless to say, never, ever give a dealership your keys or mention your trade-in until you’ve negotiated the OTD price. With less incentive to mess with you, the appraisal will take the appropriate 15 minutes.
But even when you have your keys on you, don’t hesitate to dip out if you feel uncomfortable. You don’t owe the dealer anything.
Tired of waiting? Feel free to walk out.
Feel like you’re overpaying? Don’t fret, walk out.
Feeling discriminated against based on race and/or gender? Both are valid reasons why you should leave that dealer pronto and never return.
I’ve regretted walking into dealerships plenty of times, but I’ve never regretted walking out of one. And if you feel bad ghosting the salesperson helping you, just shoot them a text saying you had to leave.
And to send you the best OTD price.
Summary
Car dealerships — with their unsavory sales tactics, price gouging, and gender discrimination — may one day go extinct.
Still, not all dealerships are bad and many times you can get a good deal on a car, depending on the quality of the dealership — by following these tips.
Knowledge is power against dealerships, so be sure to check out one of these articles next time you’re in the market for purchasing a car.
Featured image: My Ocean Production/Shutterstock.com
Read more:
About the author
