This is extremely stressful. What most people don’t realize however, is that “the grind” you go through is a tactic dealerships use, on purpose, to maximize profit from you!
As an ex-car salesperson (or is it a reformed car salesperson?) in Phoenix, I know the verbal tactics dealerships use during the car negotiating process to create confusion and diversion – designed to get you to say “yes” to buying that shiny new vehicle for the absolute most they can get out of you!
Here are the three most common verbal tricks salespeople use during car negotiating to confuse you and maximize their profit.
Verbal Trick #1 – “If I Could Get This Vehicle In Your Price Range”
Phrases like this are better known as giving you “hope for gain.” You hope that the price is right. You hope the payments fit your budget. Whatever your trigger is, the salespersons job is to focus in on that and give you hope that it can be achieved.
For instance:
Good news! You’re looking over the lot and you see the perfect truck. It’s low miles and clean inside and out. Bad news! It’s about $2,000 more than you’re budgeted for. The salesperson sees that you’re in love with this truck, so they ask, “if I could get this truck around the price you want would you buy it today?”
Naturally you think that the salesperson is offering to discount the vehicle. But pay attention to the words, “if I could.” A promise was NEVER made to discount the truck. In fact, nothing has been promised at all! You were given hope that the truck will be discounted to fit your budget, but never actually promised anything. And this is before any car negotiating has truly begun!
How To Counter This:
First – Know what make, model, year, etc. you are looking for and basic prices by shopping online first. Better yet, work through one lender and a trusted dealership. Get the vehicle you want without having to shop all over town. If you’re looking for a used car know the approximate resale values by looking in Auto Trader or at dealerships inventory online.
Just keep in mind – if one dealership is advertising a particular used vehicle for thousands less than their competitors there is probably something wrong with the vehicle! It’s either really scratched up, has high miles, or has had a hard life prior to trade-in. This is the ONE vehicle to avoid!
Second – Get pre-approved! This way you will know your budget and the salesperson won’t be able to convince you to purchase a higher priced vehicle.
Third – DO NOT walk on a car lot assuming that the dealership will come down by $3,000 or $4,000 dollars during the car negotiating. Most cars today are not marked up that much. Ask for a discount of $1,000 to $2,000 and you should get it. This will leave $500 to $1,000 profit for the dealership (that’s reasonable) and you’ll get a good vehicle for a fair price.
Verbal Trick #2 – “If I Can Get Your Payments Around Where You Want Them Will You Buy Today?
This “hope for gain” tactic usually happens during the second or third pass in the car negotiating process.
For example: You are budgeted for $500 payments and tell the salesperson that up front (bad move by the way. Discuss payments LAST not FIRST when car negotiating).
The salesperson presents you with payments at $750 a month. You tell him that you can’t afford the car at that payment and reiterate your $500 budget. If you hold your ground during one or two more passes attempts to bump you by the salesperson they will usually ask, “If I can get your payments around where you want them will you buy this vehicle today?”
Once again, listen to the words. A promise is NOT being made to get your payment exactly where you want it. Any good salesperson will tell you that the term “around” means $50 to $100 a month higher than you are asking for in payments!
How To Counter This:
First – Get pre-approved! Then crunch the numbers and see how much vehicle you can purchase to fit the payments you want BEFORE you go shopping. Why? Because by shifting interest rates or stretching payments the dealership can usually get within range of what you want for payments without discounting (or minimally discounting) the vehicle.
Second – During the car negotiating process take each element of the sale piece-by-piece. Get them to agree to a purchase price FIRST. Then a trade-in value and finally lock in the payments – which should be easy if you are pre-approved.
Third – Never talk about payments until the very end of the car negotiating process. If a salesperson asks you “how much you were hoping your payments to be?” don’t answer them. Just keep focused on the price of the vehicle. By diverting you to payments the salesperson can take your focus OFF how much they are charging you for the vehicle, the REAL value of your trade-in and the interest rate they are charging. Through interest rate manipulation, stretching payments or talking you into more money down they can reap a larger profit for themselves!
Verbal Trick #3 – We’ll Pay Off Your Trade!
The final hope for gain tactic during car negotiating goes something like this: “OK. Mr. or Mrs. Smith. Here’s the price of the car, and with your trade-in, tax and documentation fees, paying off your trade, your payment is $700 a month.”
Often you hear this phrase “paying off your trade” used in advertising. “Bring in your car – no matter what you owe – and we’ll pay it off!”
This word trick is designed to make you think the dealership is offering you exactly what you owe on your trade-in vehicle. No matter what it’s actually worth! So, with a subtle phrase they leave you with the impression that if you owe $14,000 on a car that’s worth $10,000 they will still give you $14,000 for it anyway.
Here’s what they are really saying: Your trade-in will be paid off, by using what they give you in trade, and rolling the remaining amount into your new car loan. When the money comes from the lender for your new vehicle, the dealership will “pay off your trade” by mailing them a check!
How To Counter This:
First -
Know what your trade in is worth. A simple visit to Kelley Blue Book or Edmunds will give you an approximate value of your trade-in. Keep in mind that these are estimates only and actual values may vary by market. But if during car negotiating the dealership is offering you thousands less than Kelley Blue Book says your vehicle is worth walk out of that dealership – fast!
Second -
Keep focused on the price of the car and the actual amount they are offering you for your trade while car negotiating. Instead of focusing on payments, which can be manipulated based on lowering the interest rate and stretching the payment out, negotiate on the price and real trade-in value.
Third -
Get pre-approved. This way you know exactly how much you can spend on a car and what your payments will be. It takes THEM out of the drivers seat and puts you in it!
So now you know the three most common verbal tricks that salespeople use to confuse you and take your focus off the price of the vehicle and the actual trade-in value of your car during car negotiating. Don’t be fooled by these word tricks! Listen to what they are saying and get everything in writing!