Why We Hate Salespeople..."Negotiating Smarter"

...not harder...

Published on April 3, 2004 By Sean Conners aka SConn1 In Business

Negotiating for a car can sometimes be one of the most frustrating experiences we go thru. But it doesn't have to be. Knowing a few things and being prepared as well as negotiating withthe right people can impressively reduce your time and stress.

The first thing to know when going into a car negotiation is that all car dealerships are measured in monthly increments. Since most managers in the industry are more cunning than they are smart, the systems are usually rather simple. The lat day of a month, or the last day the dealership is open at the end of a month is the end of teh period. All their bonuses and incentives generally run on these parameters. Some manufacturers do give a "fast start bonus" to try to boost sales throughout the month, especially in the 1st week. But on the whole, most of their money is made in bonuses at the end of the month.

Therefore, unless you are in a desperate situation, or you are looking at a rare, hot car, never buy a car belfore the last day of business in a month. You can look before that, and you should. gather info, get quotes, make an impression with the manager to ensure follow up. The best place you can start however, is the internet.

You can literally do it all on the net. But for most, making the decision to buy a car has to entail some physical contact. That's ok. You can still do everything else before you confront the sales force and go in prepared.

On the net, there are scores of sites that can help you asess the value of cars, what you should pay, what your trade is worth and where does one qualify for financing if needed. Kelley Blue Book is about the most famous, followed by sites like N.A.D.A.'s website and Edmunds.com . Use all of these sites and compare numbers. You will see variances, but by using them all and putting accurate information in, you can get a good idea of the costs and values you are working with.

Also, if you really want the scoop on what the dealer paid, there are a few consumer oriented sites that provide that information at a small cost. Knowing the invoice will help with getting a good deal, but in some cases, it is useless.

If you are buying a Saturn, for example, or a car that doesn't get discounted. Either because it is a hot model or the line of cars traditionally doesn't bend much, like a Benz. In those cases, knowing the invoice won't do you much good. You can know every number and still not get a discount. Don't waste your time or money with invoices if you are buying something like this.

If you are buying a more negotiated for car, like a Dodge or a Chevy, knowing the invoice may help out. If it is a car where the brand traditionally or commonly sells for around or at or below invoice, knowing that cost will only get you some piece of mind. The dealer's numbers should reflect the numbers you got from the net. If there is a discrepency, it is usually small and due to a fee not being figured in or a cost adjustment which happens quarterly in most cases. The sites sometimes arre not completely up to date, but they should be close, within reason, at the very least.

If it is a car that generally sells well, and isn't "whored out" at an invoice price usually, knowing it then could be your best ammunition. Cars that would currently fit into this category are Hondas and Toyotas and other upper line, but still mass produced cars. This is also where the "end of the month" strategy plays in.

If a dealer wants, they can sell any car on their new car lot for invoice and make money. Now on a Caravan, which traditionally sells at or below invoice for as much as 1000 below invoice, getting the car at invoice is paying too much. But on a Sienna, an invoice deal would be great. But in order to do that, you need to know what you are doing and be patient.

Let's say you went out and ot the invoice price on a Sienna equipped ideally for you, and you were able to find, thru net searches, several that would meet your needs. You have also gotten comparative trade info, and have secured a 3.9% interest loan for more than the amount needed. Next, go into the dealership, do your mandatory test drives. Avoid falling in love and get out of each with as much info as possible. Then wait.

Let's say you gathered your info on the first week of the month, then did your visits on a Saturday, somewhere in the middle. It is now the 21st of the month, and the good salespeople will be calling you. And rest assured, if you introduced yourself to the manager, he will make sure you get those calls. As long as you didn't come off as an unqualified customer. They will ask what it will take to earn your business and so forth. Maybe not right away, but soon enough. When they do, make sure you make it clear that you have not decided on what to go with yet, and won't be able to decide until the day before the last day of the month. Of course, don't say it like that. Use the date as if you have no idea that is the day before the monthly tallies will be counted up and bonuses handed out.

When the time comes, you should be able to take the upper hand at this point. When asked now what it will take, answer, "sell it to me at invoice, plus incentives, and we have a deal." Some will laugh at you. But if you've played your hand well, at least one of them will be that magic card away from a payday. It may be the manager's bonus. It may be a salesperson "volume" bonus for hitting a certain number for the month. It may be the owner wants that free trip being offered from the manufacturer and your purchase is the difference between winter at home or in the tropics.

Sometimes you will run into a wall, but if you stick to your guns and have the luxury of being patient, sooner or later, you'll get your deal. This will also come into play with trades and financing rates. They will be more willing to take that skinny or break even deal at 7pm on the 31st than they will be on the 14th during a busy Saturday.

Over the years, I have seen people do their darndest to get better deals. Some do well, and do many of the things I suggest. Some don't and follow bad advice and end up either mad or frustrated or both. Often times, they end up paying more too.

One big mistake people make is trusting their friends in pricing information. Here's a newsflash...when asked "what did you pay for it?" which is the inevitable 1stor 2nd question someone asks you when you have a new ride, the owner always lies. That may be slightly hyperbolic, but on the whole, it's true. No one ever wants to admit what they really paid, because they know that they need to show the other one that they got such a good deal that the other can't come back with "you should have seen this guy,,,he would have gotten you the same car cheaper" or something to that effect.. Plus no one want s to even hint that some lowly car salesman got the best of them in a negotiation. So if the car was 20,000, they say they paid 17K. No matter what they paid, the number admitted to will always be less.

I would experience this 1st hand when the referred customer would come in demanding paying the same as their friend did. When I would get the numbers the person was under the impression that their friend paid, I would know that they B.S.'ed the number to save face. But hell, if someone told me that Sean would sell them a 20000 dollar car for 15000, i would run over there too. Unfortunately, the false impression given by the 1st buyer only served to frustrate the 2nd.

So when getting pricing info, trust the net before your trust the people around you. You will be glad you did and have real information to use.

Also, never just make up numbers to see "if they will do it." All you will do is create a bad faith relationship with the salesperson and everyone will walk away a loser. Remember, most salespeople enjoy helping people meet their needs, making a living from it isn't necessarily devious. Work in good faith with them and you will find that the process will go better. Don't blindly believe them on everything, but if they answer your questions well, and show a genuine interest in helping you, they generally are not looking to rake you over the coals. They want to sell you a product you like and have you send more business to them. The best way they can do that is working with you as honestly as possible and being an advocate for you.

Don't try to haggle on the unhaggleable. If you are trying to buy a Viper or a Vette or a car that demands a premium, don't try to get it for invoice and act like a jerk to whomever tells you no. All cars have a gerneral "going rate" like most products do. IF the market value is sticker, and they can't keep em in stock, don't expect them to drop their pants. At the end of the month, you can sometimes get in there for a little less, but it's going to happen on a car that is at least readily in stock. Not the special edition that they have 2 of all year.

But again, good research and checking message boards where other consumers comment on things in their buying or owning experiences should help you be more informed on what cars are dealable and which few aren't. It should be mentioned that few cars are undealable, but they do exist. Some people claim "everything is negotiable" and I can say from the inside perspective, "no, they are not."

Also, don't lie to salespeople about your credit. Salespeople want to get you approved and in a car you can afford. If your credit is weak, be up front about it. If they have something you like, and it can be made affordable, the salesperson and the F&I manager will do everything possible to get you approved. Sometimes that may mean you helping them with references or money down, but there is no incentive for them to have you turned down. If loans are turned down, the iron doesn't move, and no one gets paid, is their perspective.

With proper preperation and a focus of buying when the incentives are on the dealership's personell, you are closer to getting a great deal.

stay tuned...

for more on understnding how to get a better deal,,,go here and check out my "Why We Hate Salespeople" seriesLink

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