Car dealer's selling tactics

hugoti · 04-02-2009, 04:04 PM

Guys,
Been viewing a number of cars from various car dealers, I've noticed they've always ask what is my budget or how am I paying for it. My question is is it wise to let them know what your budget is or how you paying (either finance or cash)? I've always thought car salesmen use this information to get the maximum value of the cars their selling to us. I prefer to not tell them what is my budget but not sure if it matters if they know I'll pay cash or use finance loan - does it may a difference in the selling price?
What are your opinions on this?

Cheers.

blueoval · 04-02-2009, 04:18 PM

you can usually bargain a little harder if you say you have cold cash (i.e. no finance) They are somewhat willing to negotiate a cash settlement as I think there is less paperwork to deal with, and they can get the dollars in quicker than waiting for a bank to cough up a bank cheque and waiting for it to clear.

I could be wrong on this though, and happy to be corrected on it.

This is my negotiating tactics in the end, and it has helped in making them come to the party to some respect.

Nappa · 04-02-2009, 04:59 PM

Now days the price is not any different whether you’re financing the car or paying cash. The reason why they may ask about your budget is usually to try and qualify you into the right car, , I don’t think it has anything to do with them trying to jam you.

Asking about finance is part of the sales process. Most dealers now offer finance and the sales team are encouraged to offer the dealer finance.
It also can give an indication as to what stage of the buying process you are up to. If you have already had your finance approved then the dealer knows that your probably ready to do a deal.

whales · 04-02-2009, 05:04 PM

I never tell them what I'm willing to pay in case it's above what their minimum sale price is.
I put the ball in their court by asking them whats their best price and if it's in my range then they have a sale, If it's above what I want to pay I walk off and wait for them to contact me with a better price(hopefully)

Smoke Pursuit · 04-02-2009, 05:08 PM

The reason they ask if you want finance and push it is because they make money out of it, and lots of it!

On average they make between 2 - 4 % of the vehicles purchase price if they finance it!

So if you buy a $50,000 car on a chattle mortgage they are going to make $2,000 out of the finance alone, that is providing they can make it fit at 4% brokerage.

XDV800 · 04-02-2009, 06:52 PM

Your best bet is to not disclose what your budget is, it is a selling tool for them, and gives them the upper hand, guaranteed. Simple sales technique.

If you want to get the best deal, firstly you need to know what vehicle you want with what specs. He who ventures into a dealer and just wants any car for, say, 10k, is not going to get the best deal.

An astute buyer that has researched online beforehand, and knows what they want, can focus their attention on 1 or 2 particular vehicles at a specific yard. Then bargain the sale price with the yard across the road on the similar stock.

Secondly, if you are requiring finance, get it approved from your preferred financier first. Then when offered finance from the dealer, check it out and see if it can beat the terms from a non-motor finance lender. If it's a better package then sign up.

Now the buyer can use tactics as well.
Imply that finance is not needed, you will be paying the full purchase price for the car when selected with cash/cheque/etc.

Refuse to finalise the deal that day when pushed, take a day or 2 to think about the deal and compare to others, you are not obliged to sign anything immediately. If pressured, WALK AWAY.

If indeed you did need finance after you have struck a good deal, just point out that you have lost the funding in some way (I'd say something like a distant relative past away and i need to help fund the funeral, but thats a bit dramatic, it would be a brave soul that questions the legitimacy of that story but! Use your own imagination, fibs are OK) and that finance is the the only option now. If the deal is pulled then WALK AWAY.
Plenty more car yards around. Remember that especially nowadays, car yards simply want to move as much stock as quick as they can. That is the #1 protocol. Sales.

Couple extra tips;
-Shop around toward the end of the month when salespersons are trying to make their quotas for commision, a better discount could be negotiated. End of financial year is even better.
-Imply that you have a freind or 2 also in the market for a vehicle and that you would profusely recommend they shop at said dealership.
-Get warranty thrown in for FREE, the best they have. I would not expect this on a vehicle for less than $5000 or older than 6 years though.

hy_boi · 04-02-2009, 07:35 PM

Lying just leads to more lying which leads to getting caught.

Know what you have to spend.
Don't walk in expecting to get a 7k discount on a focus,corolla whateva...thats just stupid.
Be polite, and the same will normally be shown to you. dealers get rebates from there in house financer, eg. TFS, Ford credit etc.And sometimes can be used directly on the deal or used to help get that deal over the line.
Never disclose a price another dealer has given you, its better to keep that secret.

There are more tips I'm sure. Buts just a couple to help out.

OZQUAD44 · 04-02-2009, 08:40 PM

What is happening when a salesman says that he has to check your offer with his supervisor?

I've always suspected that the salesman just wanders into his bosses office, talks about the cricket or whatever, and then comes back with a counter offer!

Is this just sales technique or is it dinkum?

TS50 · 04-02-2009, 08:48 PM

When I traded my BF F6 for the FG F6, they asked what i wanted to pay changeover, my reply was $5.00
Thats what i wanted to pay,what i was willing to pay wasnone of their buisness
I said , give me your best changeover price, to which i laughted and laughed
see it works both ways
Dont give too much info, but as someone else said, do your homeowrk, and be prepared to fight it out over dats or weeks
If you cant get the price you want, dont settle
either look elsewhere, or wait tiill they come back to you

ZA-289 · 04-02-2009, 08:51 PM

I've had them take my keys to "inspect my trade in" and not give them back when I didn't like the car I was looking at after the test drive!!

Alanbxr8 · 04-02-2009, 08:54 PM

Quote:

Originally Posted by bfiipursuit

The reason they ask if you want finance and push it is because they make money out of it, and lots of it!

On average they make between 2 - 4 % of the vehicles purchase price if they finance it!

So if you buy a $50,000 car on a chattle mortgage they are going to make $2,000 out of the finance alone, that is providing they can make it fit at 4% brokerage.

Correct they do make money from you using their finance Co.use it to your advantage, look for other finance & tell them you are.

I never tell them how much I'm prepared to spend, I just haggle the price of the car I want. Getting up & walking out also works. Telling them you are prepared to make a deal today will also get their attention.

geckoGT · 04-02-2009, 09:04 PM

Quote:

Originally Posted by OZQUAD44

What is happening when a salesman says that he has to check your offer with his supervisor?

I've always suspected that the salesman just wanders into his bosses office, talks about the cricket or whatever, and then comes back with a counter offer!

Is this just sales technique or is it dinkum?

Checking the cricket score.

It is all just an act, the salesman has already been given clear indication of their room for movement during the sales meetings. They do that to make you think they are really pushing the limits for you, when really they probably have more room for movement.

Auslandau · 04-02-2009, 09:28 PM

Don't sell cars but bought a bloody lot of them and been involved in sales roles for 25 years. When I buy one I am always happy with the deal!!

1: I always disclose what my budget is ....... if you have done your homework, you know what you should pay and what you can afford. In selling I ALWAYS ask what the customers budget is. Saves wasting my time and theirs. If a customer says $5.00 and says .. "Yes I am serious .... " with a smurk, retail book comes out straight away. Its not a case of I win seller lost .... takes two to make a sale.

2: A visit out the back to check the price isn;t just going to check cricket scores. Done for two reasons (usually)...... to actually check what price it can go for ....... money waved in the face can change the mind of the sales manager from the meeing in the morning, and to give both seller and buyer a chance to have 5 minutes time out to think about the negotiations or the purchase.

3: Be polite and dont be a S **** ...... you don't get the deal you want because the sales person is scared of you or thinks your a twit!

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TEKILA · 04-02-2009, 10:38 PM

Quote:

Originally Posted by auslandau

Don't sell cars but bought a bloody lot of them and been involved in sales roles for 25 years. When I buy one I am always happy with the deal!!

1: I always disclose what my budget is ....... if you have done your homework, you know what you should pay and what you can afford. In selling I ALWAYS ask what the customers budget is. Saves wasting my time and theirs. If a customer says $5.00 and says .. "Yes I am serious .... " with a smurk, retail book comes out straight away. Its not a case of I win seller lost .... takes two to make a sale.

2: A visit out the back to check the price isn;t just going to check cricket scores. Done for two reasons (usually)...... to actually check what price it can go for ....... money waved in the face can change the mind of the sales manager from the meeing in the morning, and to give both seller and buyer a chance to have 5 minutes time out to think about the negotiations or the purchase.

3: Be polite and dont be a S **** ...... you don't get the deal you want because the sales person is scared of you or thinks your a twit!

im in the car sales business myself, and all of that is true.
if you're a smart *** then your only going to get a similar response.
Help us help you. At the end of the day, i want to sell a car, you want to buy a car. Shouldnt we work together and be polite about it?
Being a smart *** is only going to get you no where

Quote:

Originally Posted by TS50

When I traded my BF F6 for the FG F6, they asked what i wanted to pay changeover, my reply was $5.00
Thats what i wanted to pay,what i was willing to pay wasnone of their buisness
I said , give me your best changeover price, to which i laughted and laughed
see it works both ways

the salesman would ask you what you are willing to pay because his next question would be something like "if i can get it to that price, will you buy it today?"
like i said before, help us help you.
there's no point throwing out best prices if your not going to be buying it. we're not here to help you buy a car cheaper elsewhere.

Gobes32 · 04-02-2009, 10:56 PM

I bought a car without even meeting the salesperson until the day I picked it up!

I was aware of what a Territory was worth with the options I wanted. Lets say it was $32457, I then e mailed the 5 local dealers within a 120km range stating I am buying a car this week, these are the options I want, and this is what I am hoping to pay (30k). All wrote back saying cant do it for 30 but can do it for X amount. Chose the cheapest quote and said if you can knock x amount off then we have a deal. It took me four days and maybe 20 e mails but saved me a lot of travel and heart ache. First time I met the salesmen was the day I picked the car up, inspected the car, dealer had fitted all the extra's I asked for, so I handed over the cheque and was on my merry way. Who said buying a new car is hard?

XDV800 · 04-02-2009, 11:05 PM

Quote:

Originally Posted by Gobes32

I bought a car without even meeting the salesperson until the day I picked it up!

I was aware of what a Territory was worth with the options I wanted. Lets say it was $32457, I then e mailed the 5 local dealers within a 120km range stating I am buying a car this week, these are the options I want, and this is what I am hoping to pay (30k). All wrote back saying cant do it for 30 but can do it for X amount. Chose the cheapest quote and said if you can knock x amount off then we have a deal. It took me four days and maybe 20 e mails but saved me a lot of travel and heart ache. First time I met the salesmen was the day I picked the car up, inspected the car, dealer had fitted all the extra's I asked for, so I handed over the cheque and was on my merry way. Who said buying a new car is hard?

Sensational. Well done to you.

geckoGT · 04-02-2009, 11:08 PM

Buying cars in the information age.

The days of having to talk to the salesman about what the car offer are just about over. When we bought the Mini I did not need to hear much about specs and features, I had already researched that. I just needed to talk about the financial aspect of it.

I am now looking at the new family car, it is the same situation. I mean lets face it, I have done so much research on the short list, I probably know more about specs and features than what the salesman knows.

I agree with knowing your price and being honest with the salesman, I am not there to waste his time just as I do not want mine wasted. However I do not tell him my bottom line without hearing what he is after first. Once we have a staring point worked out, then the negotiation begins until we are both happy. As for the theatrics of "checking with the boss", I do have insiders in the industry that have admitted that most of the time it is just that, theatrics.

b2tf · 04-02-2009, 11:12 PM

Quote:

Originally Posted by Gobes32

I bought a car without even meeting the salesperson until the day I picked it up!

I was aware of what a Territory was worth with the options I wanted. Lets say it was $32457, I then e mailed the 5 local dealers within a 120km range stating I am buying a car this week, these are the options I want, and this is what I am hoping to pay (30k). All wrote back saying cant do it for 30 but can do it for X amount. Chose the cheapest quote and said if you can knock x amount off then we have a deal. It took me four days and maybe 20 e mails but saved me a lot of travel and heart ache. First time I met the salesmen was the day I picked the car up, inspected the car, dealer had fitted all the extra's I asked for, so I handed over the cheque and was on my merry way. Who said buying a new car is hard?

Thats a good way to do it.

The one thing that bugged me when I was doing the rounds looking at FG's was the lack of product knowledge from sales staff. Maybe it's a sideeffect from being on the forums so much but if I am looking at a car I want to know what it has and what it doesnt have, and it does not make me happy when I have to correct the salesman and I end up telling HIM more about it than what he can tell me. ****es me right off and it's seemingly very common.

I bought my ute from a dealer, quite literally rang them out of the blue, said I want xxxxxxx car with xxxxxxxx options, get me a driveaway price. No worries I'll ring you back - 10 minutes later he rang back with a price, nup no dice because they pushed me to sign on the line right there and then. Over the course of a week I spoke to 5 other dealers, 1st dealer rang me back just to see if I had found one yet, I said no, they said leave it with us, rang me back we have found you a car. Asked them to do the numbers, said no to 3 quotes from them and eventually agreed on one only after I said they could keep the car - amazing how the possibility of walking away from a deal makes them actually LISTEN.

cycle myth · 04-02-2009, 11:30 PM

You will be able to achieve a better deal with using their finance rather than cash. (its another avenue of income at risk for them and another sales member who has a vested interest).

When the sales person goes into the sales managers office they are talking about the deal and the next approach to take with the customer to see how they can get you to commit at the best price.

Asking your budget lets them size up what is available and let them put in perspective how real you are.

Talking repayments allows them so see if you are cash or finance while at the same time working out what you can afford and how flexible you might be to walk up to other things (higher spec, accessories, aftermarket).

I would suggest that you are frank, consistent, and reasonable on any amount that you discuss - even though you can spend x it doesn't mean you aren't looking for value and a deal.

**Silver Ghia** · 04-02-2009, 11:30 PM

It has really bugged me over the years when salesmen ask me how much I have to spend. I tend to get turned off by that salesman and say that it all depends on the car.

It really depends on what cars are available at that dealership, and whether I have that warm feeling toward a particular car. Certainly I have an amount in mind I plan to pay but I dont want to be restricted by that if I find something much better but more expensive. I am looking for the best car for myself at the right price, not what the salesman thinks I might want. They tend to waste my time when they carry on about a car I dont really want.

I rather just like to look around myself and see what catches my eye.

DayTE · 04-02-2009, 11:37 PM

Quote:

Originally Posted by OZQUAD44

What is happening when a salesman says that he has to check your offer with his supervisor?

I've always suspected that the salesman just wanders into his bosses office, talks about the cricket or whatever, and then comes back with a counter offer!

Is this just sales technique or is it dinkum?

As GeckoGT said it is an act. Well actually it's a bit dinkum, but mainly technique. It does depend on the yard as well on how they play it. Where I used to sell cars we had no idea on how much the boss would move on price.

We also used to "haggle" on behalf of the customer over the phone to the boss in front of the customer. We were trained to say things in the customers favour, such as they like the car, they are ready to buy, can't you do a bit better than that for them?, aww come on just a little bit better etc..... This 'gave' the customer confidence the salesman was doing the work for them. But in reality, it was all a lot of stuffing about... The customer offered, the salesman went into bat for them *cough*, the boss come back with a counter offer, then the customer counter, counter offered etc etc... until a deal was done or the customer walked.

And as some one else mentioned "cash" doesn't really mean much these days. There is more money in financing the customer. Well actualy in the current market "cash" probably does mean a bit!

In reality there are lots of different techniques, but at the end of the day if your happy with your purchase and happy with what you paid for it, it's all good. If not well, it's probably your fault!

Enjoy the game.

Gobes32 · 04-02-2009, 11:51 PM

I will also admit I am hopeless with negotiating and at the end of the day I knew I really wanted a Terry, what color, what extra's etc and I knew what they went for. E mail seemed like an easy option because there is no face to face interaction. Also, being 24 at the time, I knew I would not be taken as seriously.

The dealer and especially the salesperson who I did end up with were absolutely fantastic and if anyone is looking to buy a new car in the Geelong/Melbourne/Ballarat area then you are welcome to PM me for details.

Auslandau · 05-02-2009, 12:00 AM

Quote:

Originally Posted by Gobes32

I will also admit I am hopeless with negotiating and at the end of the day I knew I really wanted a Terry, what color, what extra's etc and I knew what they went for. E mail seemed like an easy option because there is no face to face interaction. Also, being 24 at the time, I knew I would not be taken as seriously.

The dealer and especially the salesperson who I did end up with were absolutely fantastic and if anyone is looking to buy a new car in the Geelong/Melbourne/Ballarat area then you are welcome to PM me for details.

If you know a good dealer you have dealt with it would be good to share. Everyones very quick to name those that don't do the right things so good ones shouldalso be noted! Last few cars I have bought have all been through Freeway at C'bourne and find them great to deal with.

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Gobes32 · 05-02-2009, 12:04 AM

It was Eclipse Ford in Sebastapol, just before Ballarat. They tend to sell a lot of Ford employee cars because everyone is disgruntled with the Geelong Ford dealer. lol

westoftown · 05-02-2009, 12:24 AM

at the end of the day you just have to know what you want, because a indecisive buyer leaves more magic to be woven on the sellers part!

gtfpv · 05-02-2009, 12:59 AM

I ALWAYS KNOW MY BUDGET AND WHAT I WANT BEFORE i speak to a sales guy. my 1st asking is usually for a test drive . if i get one, i decide if i like the car or not . then i have a figure in mind . i usually tell the salesman that i have figure in mind,and i'd like there price offer 1st. if they come in too high i let them know , i'll just walk without an offer , because i actually dont like knocking them down a lot, that just means that they will rip off a buyer . i prefer for them to give me a price which i think the car is worth , and if it's close to my thinking , then deal done. if not i wont waste their time negotiating . . if they ask i may tell them what the price was i want to pay then i walk, or get a sale . cash talks . show them your deposit , and tell them you already are in a position to buy, if they can meet your price range on the vehicle .
the key is respect . they may not be able to meet your price , thats ok. i'll buy elsewhere and they will sell to another . it's all ok. we all know that i wont pay to much and they wont sell without making something .

RATT · 05-02-2009, 08:22 AM

Quote:

Originally Posted by auslandau

Don't sell cars but bought a bloody lot of them and been involved in sales roles for 25 years. When I buy one I am always happy with the deal!!

1: I always disclose what my budget is ....... if you have done your homework, you know what you should pay and what you can afford. In selling I ALWAYS ask what the customers budget is. Saves wasting my time and theirs. If a customer says $5.00 and says .. "Yes I am serious .... " with a smurk, retail book comes out straight away. Its not a case of I win seller lost .... takes two to make a sale.

2: A visit out the back to check the price isn;t just going to check cricket scores. Done for two reasons (usually)...... to actually check what price it can go for ....... money waved in the face can change the mind of the sales manager from the meeing in the morning, and to give both seller and buyer a chance to have 5 minutes time out to think about the negotiations or the purchase.

3: Be polite and dont be a S **** ...... you don't get the deal you want because the sales person is scared of you or thinks your a twit!

Spot on.

colossus · 05-02-2009, 11:04 AM

I've always wondered what percentage car dealers add to the price of their new/used cars that they are willing to knock off for a sale - I'm sure it depends on model, market situation, time of year ect?

Would it be unreasonable to offer $36K on a used car advertised for $42K for example?

Nappa · 05-02-2009, 11:23 AM

Quote:

Originally Posted by geckoGT

Checking the cricket score.

It is all just an act, the salesman has already been given clear indication of their room for movement during the sales meetings. They do that to make you think they are really pushing the limits for you, when really they probably have more room for movement.

i dunno where you've heard that, in the four dealerships i've worked for, all the pricing power is held by the manager. I have a small idea of what we can sell a car for, but whenever i check an offer with my boss, i wait while he does the figures and then he either gives me the go ahead or i need to go back and get more money. If a salesman knows exactly what's in a car it can hurt their chances as all too often they give the farm away straight up and then have no room to move.

EgoFG · 05-02-2009, 11:46 AM

When you tell them your budget they always show a car that will bargain down to about 5%-10% dearer than your budget.
So I understate by 15-20%

Also after you agree price they always come and offer the add-ons (paint protection etc). I always decide in advance what add-ons I want and include them in the bargaining process.

With a New car - Asking "What colour" is a control technique - attempting to move you on to finalising the agreement - I have even had this asked when I had stated the colour up front. Its purpose it to make the car seem more real to you, and then you get caught up in the fervour and excitement of your purchase.