Traditionally, car salesmen have a reputation for being slightly sneaky and while that’s really not the case, there’s no doubt that they are out to get the sale for as high a value as possible. After all – it’s how they make their money!
Many people are too unwilling to question or negotiate when buying a car, believing that – like shopping in the supermarket – the listed price is set in stone. It is easy to feel that agreeing to everything the salesperson says is the right route, but being a little firmer and finding room to negotiate can save thousands of pounds on the cost of a new car.
Car sales is a big business – there is a lot to be made being the middleman between the end buyer and the manufacturer, but there’s no reason to just give that money away as profit to the dealer without question.
There’s built-in profit for the dealership with the MSRP (Manufacturer Suggested Retail Price), often as much as 25%, plus there are other financial incentives offered by the manufacturer for the dealer when selling a new car.
A dealer can make thousands on a new car by simply selling it effortlessly at the listed price.
Of course, when buying a used car, the difference between the price paid and the eventual sale can be astronomical.
Remember that there is always room for some sort of negotiation, and if you feel uncomfortable in one dealership then you can always go to another. When buying something with the financial impact of a car, it really does pay to shop around and stand firm.
Here are four dealer tactics to look out for in your search for the best deal and make that dent in your bank account just a little bit smaller:
Used as a strong tactic across the globe, almost every desk in a dealership has a photo of the salesperson’s family rather than photographs of cars or anything else.
The salesperson wants to put themselves forward as your friend – it is inevitable that you will end up chatting while the initial quote is prepared or while searching for a suitable test drive date. It is here, midway through the negotiation, when the salesperson will bring up his family and make subtle hints that it is very important that he gets the commission as it is needed to pay for his daughter’s upcoming university years, or essential dental treatment for his son.
Making you feel like you are a friend will entice you to want to help the salesperson with his life – including upping his profit margin.
Come to the dealership prepared to spend half the day, or you may find yourself paying top whack just to get out of there and on with your life.
Car dealers are trained to prolong the day in order to tire you out and lower your defences – all in a bid to get you to agree to whatever their price and demands just to move on.
Then, of course, once you think you have negotiated well and secured a decent offer, they tell you that they need to run the deal past their manager. Out comes a second professional salesperson with a desire to hold on to as much profit as possible.
It’s no surprise when you want to just sign on the dotted line.
Remember though, there are multiple dealerships and even if you are determined to get a specific car, there’s always someone else out there who will be happy for your business. If time starts to drag and you believe you are being run through the delay tactics, simply stand up and explain that you are going elsewhere. It’s surprising how quickly things can come around once the threat of a no-sale is hanging over them!
And if you suspect the salesperson is going to defer to his superior eventually anyway, make that call for him early in the proceedings and ask to speak to the manager as soon as his preliminary work is done.
There’s a huge amount to be gained with a test drive – enabling you to really get a feel for the vehicle before shelling out thousands, plus it’s a ton of fun! Don’t let your enthusiasm get the better of you, though.
If you start showing an absolute love for the car to the salesperson, you have played right into their hands. After all, it is their job to get you emotionally attached to the car to make it a must-have purchase for you.
Do your best to hide any excitement over the car, take a breath and discuss the competition. Ask the salesperson to justify some of the decisions made in the car’s design when compared to another vehicle in the same class and put them on the back foot. It’s better to make them feel a little vulnerable.
It is easy to lose sight of the final value once the discussion regarding finance and the various options for monthly payments sets in. Dealers are quite happy to add a layer of confusion over the total price of the car (and thus, their profit) by breaking the amount down to ‘easy’ and ‘affordable’ monthly chunks.
It’s much easier to encourage someone to commit to a few extra tens of pounds per month than a few hundred or even thousand onto the full price of the car – after all, what’s the loss of a takeaway or few coffees for all the advantages of more luxury trim or additional technology?
Keep your mind focussed on the final sale price, and remember that any monthly payment scheme is going to add interest to the whole purchase. Keep bringing the conversation back to the overall cost of the car and dismiss any thoughts of ‘just a few extra pounds a month’.
Only after the total price of the car is settled and the extras and options defined should you go near the conversation of payment alternatives.
Remember, the dealer's job is to make as much commission as possible on the cars they sell and no matter how friendly and welcoming they seem, they’re not your friends and they really don’t have your best interests at heart. As soon as you’ve left the showroom with your new purchase, you are back to being a statistic – hopefully, for them, one who has been swayed with all their tactics.
By following these few tips and keeping mindful of your end goal, you can make sure that you hold on to the advantage and get a really good deal.