It’s time to shop for a new ride, and the local dealership has one you really like. Regardless of whether it’s used or new, to get a closer look, you’ll need to enter the lion’s den.
If you’ve never darkened the door of a dealership (or even if you have), there are some things you should know up front about what’s going to happen. Although every car dealership is different, the sales process usually follows a predictable script.
The salesperson is the single most important person. It is up to them if they are willing to do all of the work to make your experience great-while assuring your vehicle is everything it should be. So make sure you are with someone who is knowledgeable, courteous, confident in their product and their organization.
If you called on the phone before your visit, the salesperson probably encouraged you to ask for them by name when you visit the dealership. That’s because car salespeople typically work on commission—meaning they get a percentage of the sales price. It could be a straight percentage, or it could be part of a bonus plan, but the point is, if they talked to you on the phone, you are “assigned them.”
Car sales are very competitive, and if a salesperson has invested time in someone, they want to protect their investment—in this case that means you.
Selling cars is a tough job stretched over long hours, steeped in pressure, and beset by high turnover.
Ideally, you want to work with a salesperson who knows the product and provides a level of comfort. If you randomly call or walk in, you’re going to get whoever is answering the phone or is “up” on the sales floor. But there is a smarter way.
Start by checking out the Dealership reviews on Google, FB, Cars.com, Dealer Rater are some of the most common platforms to find good quality and honest reviews. Check the dealers website because usually there is a ‘Our Staff’, or ‘Meet Our Team’ tab in the menu.
This will you show you usually a photo/name or a list of salespeople at the dealership. Gives you a chance to catch sight of who you might do business with.
Also, you can check that dealer’s website for faces and titles that indicate longevity. If they’ve been there awhile, they are probably honest and knowledgeable.
Once you are ready to take on your next vehicle it is always best to reach out to your Auto-Advisor in advance.
Everything is negotiable… except it’s really not. Not anymore anyway. Maybe some years ago this was the case. With the internet now many dealers do not look to maximize profit off each unit but to sell volume.
People shop on their phones and computers now & it will not help your business to turn people away from your store by having the highest prices in town.
Most dealers want to appear transparent and may base their entire business model on no-haggle sales: There’s the price, take it or leave it. If a dealer is selling a particularly hot model of car, there may be a shortage of them.
Try to negotiate and the salesperson will let you walk, knowing people are standing in line to buy the same car.
So just understand what type of situation you’re in.
Fifteen percent is the HIGH END of the wiggle room that often exists on car sales.
Keep in mind that dealers also get kickbacks from car manufacturers on new car sales, known in the business as “holdback money.” So, even if the price they show you is “below sticker,” they have other numbers you’ll never see.
If you’re comfortable negotiating the price, try offering less than the asking price, but be prepared for a counteroffer. The salesperson may try to deflect the question by turning the question into, “How much do you want your monthly payments to be?”
Assuming you are getting a loan, this is a fair question, but it is also off-topic. Tell him or her you can talk about the financing later, but you’re wondering about price flexibility now.
They will probably then say, “What’s your best offer?” followed by, “I need to talk to my manager.” They’ll disappear for a while before coming back, or the sales manager may enter the fray at this point.
The other diversionary tactic used in price negotiation is the question of a trade-in. If you want to trade in your old car to the dealer, it will need to be inspected and appraised to determine its value. Keep in mind that no matter what the value of your old car is.. the salesperson cannot offer you that.
They need to get your trade for less so they can fix whatever needs to be fixed and then attempt to re-sell it with the hope that it sells & sells quickly. Be very weary If the salesperson offers you “full retail” for the trade, they hope to make it up elsewhere.
Keep all this in mind, especially if you’re looking at a used car on the dealer’s lot. If the dealer acquired the car on a sweet trade—meaning a low “wholesale” price—the salesperson may be willing to negotiate a better sales price with you, because the business has less invested in it.
Other factors that determine how flexible the negotiations are include how long the car has been on the lot and the overall desirability of the particular model.
The Sales Manager
Say hello to the closer(if the salesperson falls short on getting you to commit to a car)They may ask you, “If we can come to an agreement, will you be buying the car today?” Say you’re “still looking,” and the serious negotiations will stop.
They want a commitment. They will also ask again about financing, and here’s why.
According to NADA, new car sales account for about 2.6% of a dealership’s before-tax profits as a percentage of sales. The finance and insurance operations (F&I) account for about the same number.
If the sales manager agrees to a stupid low number for the sales price just to sell you the car, they may be looking to make it up when you head to your next stop, which will be a visit with the F&I people. Pay the price of the car, the days of getting thousands off should be about over!
Assuming you come to an agreement on price, the sales manager will shake your hand, a sales contract will be signed, and off you will go.
Finance and Insurance
If you come into the dealership with enough dough to buy the car without financing, you are a “cash buyer.” If you are planning to get a loan through your bank or credit union, you will be said to “have your own money.”
But either way, you have to talk to the F&I guy or gal. This is the banker and bean counter of the dealership. They’ll talk to you about down payments, interest rates, and terms of financing the car.
F&I people are generally smarter than the average bear and good salespeople in their own right.
Listen closely to what they say. Even if you have your own money, the dealership usually is able to beat the interest rate—especially if you’re shopping for a new car.
Rebates or cash back may be available, and if you’re buying an electric or hybrid vehicle, you should pursue any available tax credits.
They will also stress the importance of an extended warranty and additional insurance. They are trying to reduce your risk and raise additional profits for the dealership by getting you to pay more money.
In terms of extended warranties, if it makes sense to you to pay the monthly cost of-whatever the warranty breaks down to in your monthly payment, than get it. If you don’t see the value than don’t.
Rust and Dust
As you approach the finish line, the F&I person may have a few more things to show you, or another member of the sales team may show up to talk to you about undercoating, fabric protection, paint protection, and car alarms.
Sometimes referred to as “rust and dust,” these add-ons and extras deserve scrutiny with a careful eye.
Once you have signed title forms, the registration, and any loan contracts, you are done. Find your salesperson, get your keys, and head out into your new automotive world.