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Auto dealers do not play these games for fun, they play them for profit. You do not have to play the game, but you should definitely know the rules. From the minute you set foot on a dealership, sales personnel will start playing a game called "the steps to the sale". It begins with the "meet and greet" and continues with "building rapport, gaining trust and qualifying" right through to the "demo and write-up".
The game is putting you on this path and keeping you there until you drive away in their car. Your best chance at getting the vehicle you want, at a fair price, is to get off, and stay off, this well rehearsed path. Knowing the rules will save you time, aggravation and, most importantly, money.
Rule # 1: Do not tell the salesperson anything but your name. Believe me when I tell you that every single piece of information that you give your salesperson will help to lead you down the path to profit. Any good salesperson has been highly trained to probe for "hot buttons" and to use trial closes. The salesperson makes his, or her, living asking you questions. Do not play this expensive game.
Rule # 2: The salesperson is NOT your friend. Do not buy into this trick for even a second. Every salesperson has been trained to do whatever it takes to convince you that the two of you are best buddies. The belief is that you will be more willing to follow your new buddy down the path to a sale. No salesperson gets paid to make friends, they get paid to sell you a car and they get paid a percentage of the profit. The higher the profit, the higher the commission. If you really do like your salesperson, you can become pals AFTER you buy your car!
Rule # 3: Do not feel bad about "misleading" your salesperson. If you remember rule # 1, then you know not to tell your salesperson anything, especially how you intend to pay for the car you decide to buy. ALWAYS act as if you intend to pay cash (or write a check) for whatever car you decide to own. This is critical and might be the single most important piece of advice to follow. Once you find the car of your dreams, negotiate with the assumption that you will be paying cash for the vehicle. Not until you have settled on a price do you announce your intent to finance. This strategy keeps the focus on price and off of payments. Everything about the negotiation process is designed to get your attention off price and onto payment. This is absolutely a game you can not afford to play. Do not feel bad if your salesperson accuses you of being "misleading" because he certainly has no intention of apologizing for any attempts to "mislead" you.
Rule # 4: New car buyers have to know about every rebate available. Once you have decided on the new vehicle you want to purchase, ask to see the dealer invoice. And in case you're wondering; in my 30 years in the business I have never once seen a fake invoice. Once you have the invoice, make sure you know what, if any, consumer rebates you qualify for. Besides the advertised rebates, most manufacturers also have a number of unadvertised rebates, such as; loyalty, military (active and retired), vendor (affiliates and suppliers), associations (farm bureau, national education assoc., etc.) and even employee discounts (some manufacturers apply these discounts to immediate family members). The dealer should be willing to give you information on any of these unadvertised rebates, but just in case he does not, you should be able to find them through the manufacturers' website or by checking with the regional sales office. Once you have all of the consumer rebate information you should find out if the dealer has a rebate coming. Known as dealer cash, most manufactures reward their dealers with incentives to help move aging or slow selling inventory. You can find these rebates in The Automotive News (The central branch of my city library has a subscription and I can find issues in the reference section) or at Edmunds.com. You should be able to combine any rebates, consumer and dealer, to make your best deal. If you are financing for more than 2 years and the rebate is a choice of cash back or a low interest rate, be sure to do the math before deciding which offer to take. Do not always assume that the cash rebate is the best way to go.
Rule # 5: Used car buyers should ignore the window sticker or asking price. You do not need the dealer to tell you what a used vehicle is worth. There is so much information available on the internet that you should know exactly what any vehicle you're trying to buy, sell or trade is really worth. If a dealer is asking more, it simply means he paid too much or is set on making a substantial profit. You can find values at KBB.com, NADAguides.com and Edmunds.com, to name just a few. Most will give values for a number of scenarios; KBB gives a trade, private party and retail price. A fair market value would be something between trade and private party. Auto Trader magazines are a good source of comparables and employ a mix of dealer and private ads. The asking price will not be much help though; you should call and see what a vehicle sold for to get a sense of the real market value. Ask to have any vehicle you're thinking about buying inspected by an independent mechanic; if a dealer has a problem with this, find a new dealer.
Rule # 6: If you're financing, make sure that the interest rates and loan terms you sign up for are the best that you really qualify for. If you have good credit, get yourself pre-approved before you get to the dealership. Check with your bank or credit union as well as online lenders. You can find a list of online lenders in my book and on my website. If you get to the dealership and find lower rates available it's still your option. If you have poor, or no credit, you are at the greatest risk of paying too high an interest rate. You will most likely be offered what is easiest or most profitable for the dealer. While a bank or credit union probably will not be much help (unless you have a very strong co-signer) there are still many options available on the internet. Again you will find a list of online lenders in my book or on my website.
Rule # 7: The Business Office is not just the place where you sign your paperwork. The real function of the Business or Finance office is to sell you products and financing. The dealer can make significant profits marking up the interest rate, so ask to see the approval from the bank. Products offered will range from warranties, window etch, interior and exterior protectants to Gap, credit and life insurances. Many dealers make more profit in the Finance office than they do selling the cars. Be careful here and do not fall for common tricks such as "menu selling" (products are presented as packages and you are given choices of packages that you can afford), and "payment packing" (the payment you agreed to in your negotiations is more than what it would take to just buy the car, leaving room for the products presented by the Finance manager to seem more affordable). The best way to see the real cost, or payment effects, of any products or packages offered is to have the Finance manager print a contract with NONE of these present and then another contract with the added products.
Make sure the vehicle price, interest rate and loan term are the same on each contract. (It's easy to trick someone into believing that a product or package adds very little to the payment by extending the loan term or lowering the interest rate) Remember also, that while banks will finance these products and packages, they are NEVER required to obtain an approval and DO NOT affect the interest rates or terms. If your finance manager implies that purchasing ANYTHING offered will increase your odds of a loan approval or will lower the interest rate, he is committing a crime. If this happens to you, have the finance manager write this out for you and take it to the owner of the store and ask for your name to be added to the sign on the building. Big No No.
There is so much more specific information for you to know before you purchase your next vehicle, much more than I could give you in this short space. I encourage you read my book or visit my website to prepare yourself completely, and save yourself thousands of your hard earned dollars, each and every time you buy a car.
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Source: http://ezinearticles.com/?Games-the-Auto-Dealer-Wants-to-Play&id=2197147
