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Negotiating Tips and Dealer Tricks

Last Modified: January 21, 2015 by Jeff Ostroff  | Originally Published August 4, 2000

Your Negotiating Strategy

Now that you have been able to determine how much the dealer paid for the car and you've figured out your 3% - 5% fair profit offer, you are in a much better position than most new car shoppers. If you know somebody that has recently purchased a car, ask them to share their paperwork so you can familiarize yourself with the buyers form. You will know how the forms work so you won't be intimidated when it's time to close the deal. The dealer's paperwork can be very confusing by design.

Don't Negotiate a Car Deal Based on Monthly Payment

Doing this will open you up to the "Cash Flow Shell Game." You must negotiate the price first, then the financing. Be especially careful when a 0% APR deal is going on. Make sure to stay focused on the purchase price at all times.

When Car Shopping Don't Be an Impulse Buyer

cars on transport truck

If you let your impulses take over at a car dealership it will cost you a lot of money. You can always buy tomorrow or a week from now. Take your time because good things come to those who wait!

Wrap Up the Negotiation with the Salesman Quickly

Try to complete the negotiation in a half hour. Much longer than that and it isn't worth the salesperson's time to give you the best deal since they will end up with as little as $50 commission. Set your "deal timer" for 30 minutes. Tell them if the deal isn't agreed upon when it goes off you will leave.

Negotiate Up From Dealer Cost and Not Down from MSRP

Remember from the last chapter that Invoice Price is not the actual Dealer Cost. In the last chapter I showed you how to calculate the actual Dealer Cost and formulate a fair offer of 3% - 5% above it.

Once You Make Your Offer, Stay Strong

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Use the research in "The Folder" to justify your offer and stick to it (if you offered a 3% profit you can come up to 5%). They'll shout at you, call you names and accuse you of stealing from their kids. This is part of the dealer's game so don't agree to "split the difference." You should never end up more than a few hundred dollars over your fair offer.

Never Negotiate a Car Deal on an Empty Stomach

Before you go to negotiate eat a good meal, make sure you are rested and dressed comfortably (but nicely). Do not go car shopping if you are sick, have a fever or a headache. You want to be on top of your game at the dealership.

Bring Another Person With You to the Dealership

Having a second person on your side keeps the salesperson from being able to intimidate you. Strategically your partner should be a doubting Thomas, devil's advocate, constantly pointing out negative parts of a deal, trying to "talk you out of it," saying you should go back to the other dealer.

CarBuyingTips.com Favorite - The Power of Walking Out

If you aren't satisfied with the way the negotiation is headed then just get up and leave. This is the power that you have and it will panic them once they see you are serious. You might be halfway to you car when they stop you with a better offer.

Never Give a Deposit Until the Deal is Done

Unless you have agreed to everything and are buying the car there is no reason to give any money. It does not "show that your offer is serious," all it does is let them hold your money hostage. If you are ordering from the factory then a deposit is proper once the deal is signed.

Email From a Visitor Shows My Tips Work

To: Jeff

I walked out of the first deal at signing. They called me names, told me I was crazy and no one would beat the deal. I went to another dealer who discounted $1,000 from MSRP. They disclosed everything and exactly how much they were giving me for my lease pay off. They even threw in the floor mats! I drove my new car back to the first dealership to get my deposit back. I loved it!!!

CarBuyingTips.com Exposes Dealer Tricks

During negotiations, they'll pull every trick in the book, it's just part of negotiating. Since you are reading CarBuyingTips.com you won't fall for their tricks. Just because they write something on a piece of paper doesn't mean it is true, so don't believe everything they scribble down.

The Hidden Rebate Tactic

I see this tactic at dealers and in newspaper ads. They list a price that is less than MSRP, making you think it is a good deal. Unfortunately the "prices include the rebate." Any rebates should be subtracted after you negotiate the price. Do not let them include the rebate in their "asking price."

The "Turnover" (Also Called the "TO") Scam

They keep switching salespeople to work on you and wear you down. It's harassment and it's just a waste of time. They have no intention of working with you, they just want to tire you out. Tell the salesman that they should stop this nonsense right away. Tell them you are on to the scam are walking if they keep switching.

"No Haggle" Usually Means "No Bargain"

Many dealers use "No Haggle" pricing to make you think you are getting a good deal. People think these dealers will never negotiate. However, you still hold the power because you can just get up and leave. Sometimes the price at these dealerships will be good but if their "No Haggle" price is more than 5% over dealer cost, then it's not a good deal and it's time to haggle or go somewhere else.

Beware of the Eavesdropping Salesperson!

Don't discuss anything privately if they leave you alone in the office. They could have set the phone to intercom mode and now the salesman and his boss are listening to every word you say.

The Psychology of the Sales Tally Board

Dealers display the tally board or point out your salesperson's totals to condition you to buy. They want you to think that they are giving good deals because they are selling so many cars.

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Here's some lies and half truths they will use to play games with you:

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CarBuyingTips.com Says to Shop Around

Unless they have accepted your fair offer, shop around. Just because they wrote up a deal does not mean you have to accept it. Tell the sales droid that you want to think it over. Ask for a copy or write down as many details as you can, then go to the next dealer.

All the above scams are usually eliminated when you use the discount pricing sites we've recommended.

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CarsDirect.com lists your purchase price online instantly with better prices than dealers and cool 360° views. As you check off options, the screen shows invoice price, MSRP and your low CarsDirect price.
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Getting a Good Deal is Much More than Getting a Good Price

The real scams happen in the finance and insurance (F&I) office. The dealer wants you to let your guard down but you'll be ready!

Go to the Next Chapter: Closing the Deal, Avoiding F&I Office Scams >