Aslmkm & Hi
part 2 & here it goes
Let’s Make a Deal — or Two, or Three
Consumers often allow the many negotiations in the car-buying process to become one big, confusing deal — and that’s a big mistake. Remember that all the different decisions you make represent different profit opportunities for the dealership. Throw them all together into one complicated equation, and you’ll lose sight of what each one is costing you.
The salesperson will ask you right up front if you plan to finance the vehicle or pay cash, if you intend to trade in your current car, and so on. He or she will urge you to settle on monthly payments because, psychologically, anything can be made to sound affordable if broken down this way and spread over a long period. It also combines the aforementioned deals into one and obscures increases in the purchase price, loan rate and term, and other aspects.
Most consumer advocates recommend that shoppers refuse to discuss monthly payments and instead focus on the sale price. Put off all questions about your other intentions by saying you don’t know what you’re going to do with your current car or whether or not you will finance — with the dealer or elsewhere — or pay cash. Answering those questions complicates matters and helps the salesperson to qualify you or determine what you can afford (as opposed to what you want to pay).
Things that don’t matter in your price negotiation:
the car you drive now, whether it’s paid off and if you plan to trade it in
whether you plan to pay cash, lease or finance
if you’re “ready to buy today”
service contracts, rustproofing, fabric protectant or other “add-ons”
if you have kids
How stunning you look in that dress
How the local sports team is doing
Things that do matter in your price negotiation:
It’s not in your best interest to be rude. Establishing a rapport with the salesperson is beneficial to you. Salespeople may say they want to discuss monthly payments because they want to help you make sure you can afford the car. Explain that you’ve done all those calculations and you have everything under control. If you come across as knowledgeable about the products and process, then the salesperson should be all business as well.
There’s a hitch to this approach. Dealers attempt to combine the different deals into one because they “just want to make a profit” somewhere, as is their right. A bargain on one deal can cost you in another. So if you go in and say you have no trade-in and you already lined up your financing, the salesperson will assume that — unless you go for a service plan or some other back-end product or service — the vehicle’s sale price will be the only source of profit and commission. You may not get the lowest price on the vehicle.
If you say, as I’ve recommended, that you don’t know about those other issues but don’t want to address them yet, the salesman may hedge his bets, resulting in a better sale price. If you’ve followed this guide, it will also be completely true! You’ve shopped your trade-in around and compared different financing options, but you do intend to let the dealership try and beat the best offers in both cases — just not now. If you’re in the early stages of shopping around, you might not get to that point yet. You might want to take the quote and move on to the next dealership for another offer.
The salesperson will resist letting you go. The sales team is under pressure to close every deal, and if you walk out, you may not come back. Competition among dealerships is high enough that there isn’t necessarily another customer behind you. In the end, a slim profit is better than no profit in the world of new-car sales. When you stand up to go, two things can happen — possibly both: The sales price will magically decrease, and/or the one salesperson will attempt to hand you off to another. In many dealerships, this is required of the sales team — the thinking being that if one seller isn’t succeeding with you, then perhaps another will.
If you get a magical price drop, write that down too — on the salesperson’s business card. Insist on leaving, and you may be told that the quote is good today only. That’s unlikely. It’s probably another attempt to keep you in the store. Call the bluff. Ask if there are exceptions to that policy, because if not, you won’t waste the time driving back. I think you’ll be told that they can probably work something out . . . for you.
What to Expect
The manners have improved at dealerships, and the pressure may be lessened, but many of the strategies remain. Expect to be greeted quickly by a salesperson, though not necessarily hounded. He or she will seem in a hurry to sit you down at a desk to discuss a deal — a process that typically involves sheets of paper with the sticker price marked boldly and conspicuously, and, in time, lots of calculations that will make your head spin.
You may be negotiating directly with a salesperson, but you will likely find that he or she is often “off to see the Wizard,” as I like to put it. The great and powerful Oz is also known as the sales manager, whom you probably will never see. If the Oz name doesn’t work for you, think of him as bad cop. Dealerships operate a classic good cop/bad cop approach, and the salesperson is the one who gets to know you, poses as your advocate and brings or phones your counteroffers to the bad cop, who “bumps” them up or shoots them down entirely.
There will be some back-and-forth between just you and the salesperson, but a few of those trips to see the Wizard are all but inevitable. Negotiations can take hours. Auto dealers are known for stretching it out, sometimes in a conscious attempt to wear the customer down. You can’t avoid this stuff entirely, but if a salesperson goes overboard with the shenanigans or goes off to the Wizard excessively, then you have options. Say you want to talk to the sales manager — someone who can negotiate directly. If Oz is too busy for you, suggest you’ll find a dealership where the mandated negotiators are more accessible.
Your most potent play in this entire game is to leave — or appear that you might. (Never give the dealership the only keys to your car for an appraisal, because you’ll be stuck.) If the salesperson goes off to see the Wizard one too many times, develop a case of ants in your pants. Get up. Stretch your legs. The salesperson may reappear immediately. If that doesn’t work, or you end up in the same position yet again, take it a step further. Pack up your little dog, Toto, and whatever you might have brought along, and follow the yellow brick road a little closer to the front door. Flying monkeys will drag you back. OK, not really, but the process will probably speed up.
Salespeople are trained to use everything you say in their favor. You can do the same. If you’ve developed a rapport with the salesperson, and he says the boss took his head off for that last offer, tell him in earnest, “Gee, I don’t want to get you in trouble,” and suggest that you’ll stop doing so by going to a dealership where the boss isn’t such a big, bad meanie. Even if it seems to give the representatives great pain to agree to your best offer, they would not be accepting the deal if it were a bad one for the dealership.
If ever you don’t like the way you’re being treated and you don’t want to give up on the dealership itself, you can ask to work with another salesperson. If you don’t want to confront the one you’ve been dealing with, go off to see the Wizard yourself. Oz will set you up with another seller or take you on himself before he lets you out the door. The first salesperson will get a piece of an eventual commission, so don’t feel guilty.
What’s the Rush?
Dealers are in a hurry, for several reasons. One is that the sense of urgency works on buyers’ psyches. If you think you have to act now, then you’re more likely to do so, and with less time to think rationally. This happens from the start, and sometimes in subtle ways. The model or trim level you’ve chosen is “one of our most popular,” which suggests both that you’ve shown excellent taste and that these cars sell fast. The car that meets your exact specifications is “still available,” which means it might not be if you dally. Sales events serve the same purpose — the dealer’s, usually not yours. Some buyers may actually pay more at a sale because they believe the deals are going fast. Unless you want the hot dogs or free balloons for your kids, don’t knock yourself out to attend a “tent sale.” The dealership has full discretion to make you a great deal anytime. Unless the sale is tied to an incentive period, the same prices are available before, during and after the sale.
Caveats and Negotiating Tips
Chill. The second-to-last thing you want to do is get emotional about a car. I know that’s difficult, but emotions lead to hasty and/or unwise decisions. The last thing you want to do is express that excitement to dealers. They’re attuned to such things, and they’ll exploit it. Work on that poker face, and try to keep it up throughout the process. Be clinical, analytical, emotionally detached. If you walk in and say you love the new Miata or that you always dreamed of driving a Mercedes, you are done for.
Be aware of the “bump.” That’s where the salesperson attempts to bump your offer higher, usually by trying to get a range from you. For example, you say you’re willing to pay $13,500 for that Honda Civic. He’ll say, “Up to? . . .” This is where human nature makes us say something like, “Up to $14,000.” Mistake! If he asks, “Up to? . . .”, try this response: “Yes. Up to $13,500.”
Shut up. To inexperienced negotiators, silence is scary. It’s hard to throw out a low-ball figure and let it float there in the silence. Do it anyway. Shut up. Resist the urge to bump yourself when you see the salesperson’s well-practiced incredulous reaction. “Up to?”
“Yes, up to the amount I just proposed. I’ll gladly pay less, not more.”
Guard your personal information. A salesperson may ask immediately for personal information. Like the issues of your current car and how you plan to pay, don’t give too much other info, and especially not your mykad number. There’s no need for it unless you’ve gone through most of the process and are looking into the dealer’s financing options. The MYN is needed to run a credit check, which will determine the rates for which you qualify. If you give it ahead of time, they may run it immediately to help qualify you.
Keep your eye on all the variables. You may set a monthly payment that you’re willing to accept and find out that the attractive loan rate the F&I manager “found for you” came with a longer term, which means you pay more for the vehicle in the long run.
Don’t sign anything until the deal is done. Signatures have power. Even if a random piece of paper would ultimately prove not to be legally binding, a pressured consumer might assume it is or feel obligated. And who wants to bother with lawyers just to get your money back? Many people think they can change their minds after a day or two, but the “cooling-off period” is not a nationwide phenomenon, and it can be messy even where it is law. Avoid the whole thing by not acting hastily and not signing anything until all terms are agreed upon and you’re ready to close the deal or deals. The same goes for deposits . . .
Resist the deposit. Assume a deposit is nonrefundable — even if the salesperson or F&I manager says it’s refundable. If it isn’t in writing, it’s not binding. Don’t be too quick to hand over a check in either case, because it’s seldom warranted. You may be asked for a deposit to prove you’re serious. You don’t have to prove anything. You’re there, you’re prepared and you’ve invested time with the dealership. Of course you’re serious. There are a few cases in which a deposit is justified. One is the case of a “hot” vehicle that truly may be snatched up by another buyer — a car you know is hard to come by and not one the dealer tells you is in short supply. The same goes for vehicles for which you’re put on a waiting list. If you don’t make the deposit, those who do will be added ahead of you on the list, not behind. It’s also reasonable to put a deposit down when you order a vehicle from the factory. Try to write into the contract that the vehicle must meet your prestated specifications exactly, or the deposit will be refunded.
Negotiate with words, not clothing. What you wear and what you drive into the dealership tell stories about you. You can low-ball all you want, but if you roll up in a luxury car or wear your best suit, dress, jewelry or watch, the salesperson will read your appearance, not your lips, when you say you can’t afford his price.
Ambush Charges and Equipment
You must keep an eye on the charges through the whole process. If a number has inflated somewhere along the line, ask about it. Unwanted equipment is something you should not pay for, whether you’re aware of it all along or if it surprises you near the end. For example, the salesperson says he has the car you want with the equipment you want, but the sale price rises mysteriously and/or the vehicle rolls up with dealer-installed accessories you didn’t ask for but are asked to pay for. If you don’t want them, don’t accept ’em. If they’re upgrades that you don’t mind, insist that they either be “thrown in” or removed, or demand another vehicle without them. You’ve come a long way. Don’t give in now because you were almost done and this is the only thing holding it up.
courtesy of cheefarn of rccsg. cheers dog