Buying a car can be scary, especially when financing is involved. I personally had a lot of misconceptions before I worked in car sales. Before I ever stepped on the lot, the dealership put me through a three-day boot camp to learn the tricks of the trade.
After leaving car sales, I learned that my behind-the-scenes experience and knowledge of potential sales traps were extremely useful in getting the best deal. And while they will not put you in a Mercedes for $99 a month, they can help you get the best price and payment in your budget.
Do Your Homework on Yourself
When I in was sales, I found the easiest sales were to people who thought they were the toughest customers. People who came in with heads filled with prices and figures from the Internet often showed their hand way too early.
Instead, do homework on yourself. Before you arrive at a dealership, know what you can afford, what kind of down payment you are comfortable with, and exactly what kind of car you want. The first two you never tell the truth about. The third should be your sole focus. Everything else will be handled once you are sitting down to negotiate.
Be Realistic
I have dealt with many customers who walked in with unrealistic expectations. As an example, one man believed he could get into a $30,000 truck with no money down and only pay $200 per month. He was extremely firm in his position until I did the math for him. Over 60 months, a $200 per month payment would total $12,000. He lost his confidence and began to concede far more than he had to.
There are a lot factors that go into a payment, but make sure the payment you are comfortable with is compatible with the car you are interested in. This will help you remain the one in control during the deal.
Go Big
Prior to working for a dealership, I wrongly believed that smaller dealers would be more willing to cut corners to get me to buy a car. I also believed that bigger dealerships would not care about selling one economy car.
The reality is that the bigger the dealership, the better the potential deal. The potential increases again if it is a regional or national chain.
These are the dirty secrets your dealer will not tell you. First, the more cars a dealer sells, the less they have to pay the manufacturer. So while the individual deal may not be profitable, large dealerships know it will be down the road. Large dealerships also are able to lean on lenders. Lenders will take riskier deals because they know many more secure deals will be coming. In this case, bigger is truly better.
Be a Buyer
One of the greatest misconceptions is that dealers will work harder if they think you are not interested. This is absolutely untrue. Every sales manager I have ever worked with has been far more flexible with customers who want to buy. Those who act as if they could take it or leave it often get put on the back burner.
Focus Wins the Shell Game
When it comes time to crunch numbers, there are two schools of thought. Most dealers present you with three totals. These are the price of the car, the sum of your trade in and cash down, and your projected monthly payment.
Some dealers use these numbers like a shell game. They bounce your attention from one number to another in order to confuse you. Others will focus on the one number that they feel sounds the best. But you can use the latter to get the best deal.
If you focus on your payment, the other numbers will work themselves out. This creates a pathway for the dealer to get you where you need to be. In many deals, I have seen the sales manager cut the price for a vehicle or overpay for a trade-in to make a deal work. This also gives the manager the ability to make the sales contract appear more enticing to a potential lender.
Information Is Power
The last rule of thumb is simple: Never ever tell a salesman what you can actually afford. When discussing payment, always start $50-$75 below your target payment. If you have money for a down payment, either do not disclose it or only admit half.
Dealers have a method to their initial offers. They initially put high numbers out to intentionally shock you. Do not let this move your expectations. You know your expectations are realistic, and they know you will sign if they can make you happy. You will be the one in control.
In the end, you should end up with a shiny new car and a payment you can live with.
