Last Updated on December 31, 2022 by Bernard Juchli
Howdy, Driver? Of course, you can beat the car salesman to buy a car at a cheaper cost. It is fairly easy to outsmart a car salesman while bargaining, but incorporate the strategy in this article.
A professional car salesman, except a car salesman man with no experience, undergoes weeks to months of salesman training course, typically 3 months. It prepares them to identify your weaknesses and rip you of your hard-earned money.
The average salesman is considered a liar, but not a curbstoner, they are after the commission with no consideration for consumer interest.
So, you are responsible for safeguarding your interest by talking down the car salesman, securing the best deal, and saving more money.
Trust me; a dealer is so good that they can talk you into paying a huge sum on a less valuable vehicle. However, I encounter excellent bargains most of the time with lots of positives against dealerships, which I am sharing with you today.
Below are the tested-working tips to beat the car salesman:
Learn the Dealership Terms
The dealership has its vocabulary used often to intimidate buyers and get away with selling with excessive profits.
Dealership terms related to buying a car that you should note include the following:
- Dealer holdback (a payment from automakers to dealers)
- Dealer invoice
- Dealer incentive
- Destination charge
- Documentation fee
- Dealer prep fees
- Extended warranty
- Sticker price
- MSRP (Manufacturer Suggested Retail Price)
- Rebate or cash back
- Trade-in value
Some of the dealer terms above are negotiable, thus, reducing the amount of money you will pay for the car. The non-negotiable terms include dealer incentive, destination charge, extended warranty, and rebate. However, you can negotiate the dealer prep fee, sticker price, MSRP, and trade-in value.
When you become acquainted with these car buying terms, it makes it simpler to negotiate the final cost of a car and beat the car salesman in their game.
Note the Lending/Renting Terms
If you intend to buy the car on loan or rent from the dealership, it is important to be familiar with the following terms:
- Annual percentage rate
- Acquisition fee
- Capitalized cost reduction (if you are trading in)
- Closed-end lease
- Disposition fee
- Early termination fee
- Excess mileage charges
- Excess wear charges
- Prepayment penalty
- Termination fee
- Walk-away lease
While acquainting with the terms above, write out the negotiable terms because you will beat down the cost with the dealer to reduce the final cost of acquiring or renting the vehicle temporarily.
Make sure to put down a large down payment to eliminate the possibility of a default and reduce the monthly payment.
Also, find out about the actions the dealership will take against you if you default.
The excess mileage charges apply when you rent a vehicle, but you exceed the specified mileage. Find out what the dealership charges, but it is not likely that the dealership will allow you to negotiate the charges.
Moreover, the dealership will activate the excess wear charges, which you should try to negotiate on a rented car to avoid overpaying for damages.
Prepare and Research Preferred Vehicle
After you understand the lending, renting, and buying terms, make your budget to keep a salesman from manipulating you to purchase or finance an expensive vehicle.
If you are financing the car, decide on a monthly payment you can afford to pay and note that you will pay more than the value of the car since you are financing it.
If you intend to buy the car outright, decide on the maximum price you can pay comfortably.
Next, research the vehicles within your budget. Of course, you do not want to walk into the dealership with no clues regarding what vehicle to buy, except you just want to test drive a car without buying it from the dealership.
Some of the good resources for vehicle research include the following:
On the research site, input your preferred vehicle model and filter the search result to your budget.
After seeing the specifications of the vehicle, you want to know the problems of the vehicle by accessing real consumer reviews/reports on the vehicle via any of the following sites:
Note that a used car is not price-specific like a new car. So, do not expect the used car pricing online to be similar to the dealer’s sales price.
Call the Dealer First
The best avenue to negotiate and outsmart a car salesman is over the phone. Of course, they are not there to manipulate with their body language and they hope you check into the dealership the next minute to complete payments, while they earn a commission.
Nevertheless, a smart dealer will keep the price from you until you arrive at the showroom.
To talk down the car salesman, call during the end of the month and at the closing time of the day on a dull weekend.
If possible, the weather should be unfriendly at the moment; it tempts the dealership to close the day with one last sale – good, fair, or bad.
The dealer wants to wrap up for the day, so they almost careless about maximizing profit.
Use Automaker Pricing
When you identify the vehicle you need, visit the manufacturer’s website for the MSRP.
I recommend negotiating using the MSRP standard. For example, the MSRP cost of a VW Passat is $23,995. While negotiating the cost of the vehicle with the salesman, you are supposed to maintain the MRSP by pricing something like $20,995 or cut down the final 3 digits (995) to values like 450.
If you round the figures like $21,000, it is difficult to save additional expenses on the car.
If you intend to trade in an existing car for a new car, do not tell the dealership yet. Otherwise, the dealer will use their profit margin on the price of the new car to make it look like they are not gaining from your trade-in.
Do Not Mention Financing
Do you intend to finance the car? Then, you do not want to inform the car salesman. If the salesman knows upfront that you want to finance the car, he has a slim chance of making a decent profit from your financing.
After the negotiation, you may use a third-party lender with better rates to finance the vehicle. Meanwhile, I have written an article that discloses how you can return a financed car with no penalty.
A rebate is a buying discount offered by a manufacturer or the dealer to promote sales. Make sure to conclude on the price of the vehicle before applying the rebate, which helps to outsmart the car salesman and reduce the vehicle price.
If the dealer is stagnant with the price, it is best not to fall for the trap. Leave your contact number with the vehicle salesman and walk away.
Yes, the salesman will call you after measuring the positives in the deal and, of course, their commission.
Negotiate Calmly and Tip the Salesman
Your sales guy is prepared to pitch the life out of you and recommend even the weirdest vehicle in the showroom. However, you can control the atmosphere by bringing the salesman to a halt frequently.
Employing calmness in the negotiation works well on salesmen that tend to rap their way into manipulating a buyer. When you take the time to say your mind, you are talking down the car salesman that may feel daft at some point.
The next thing is to tip the car salesman. Funny, right? But most of the time, tipping the car salesman serves as an inducement, especially if their commission from the sale of the vehicle is low.
Look Out for Payment Packing and Prep Scam
Another way to outsmart a car salesman is to make sure there is no payment packing scam. Outside the important add-ons, a scrupulous dealer may include irrelevant charges to the sales contract, thus inflating the total payment.
Packed payments would typically include prep fees, pinstripe charges, high-cost insurance, and unnecessary dealer documentation charges.
Prep fee is a legal fee, but some dealers can inflate the cost of preparing the vehicle or include services that are not necessary. Make sure to negotiate the prep fee or reject the prepping services.
Negotiate the Doc Fee
Most dealerships charge for documentation, which is legal. However, a dealer may charge excessively and it causes the purchase price of the vehicle to increase. Go through the list and tell the salesman that you are not paying the doc fee. They will hesitate because it is illegal for the dealership not to charge you the doc fee despite charging other buyers. Ask them to include it in the final payment as an additional discount since they cannot omit the fee.
How much can a car salesman take off?
A car salesman takes off at least 2% above the invoice price for an average vehicle.
Is it illegal for a car salesman to lie?
It is not illegal if the salesman lies professionally, like in the case of pricing, to manipulate a buyer. However, it is illegal if a used car salesman lies about the condition of a vehicle. For example, if the odometer was changed, the car was stolen and legalized, or the title was washed, the salesman is supposed to inform the buyer. Otherwise, it is illegal and you should report the dealership for auto fraud.