I do sales (for another class of industry) and, in the end it is all about proper qualifying. Right in the beginning, I tell them that I work with sales also (you see their face changing immediately, because they know that basic magic wouldn't work). Then, all questions they ask, I answer with "it depends"... So pull the card of payment like this; "I can buy, I can lease, I can finance...it all depends on the total cost and eventual interest conditions"... so this, usually takes them off guard... also, let them know that old game of trying to get me when I leave the showroom, or calling me right after, it will decrease the price we were discussing by X... always, always, ask the "price out of the door"... so no funny games during signing....
Perfect! I told people that I was an assistant to Dale Carnegie, sales training, they changed also. And they asked how they were doing. It was really funny.
@@AshleySpeaks4U agree with you, if down payment ranges from 0 to 100% of the negotiated asset. Last 3 cars, I bought it paying in full after squeezing them to the price I had set. 🤣
Exactly. You know when you walk in the door these folks are trying to assess if you are the low hanging fruit particularly if like me you are an old man. Every one knows this yet the car salesman are allowed to continue with apparently legal protection.
They are trying to take advantage of you in every way they can. If they can't come to my terms I'm walking out of that Dealership. There are a dozen more Dealers in the area & when negotiating prices I'll be more ruthless than they are because its my money ! Agree on a sale price great. Trade in price is just as important. If we don't agree my legs work fine ! Don't ever fall in love with a vehicle. Let them know you'll walk.
I always negotiate the out the door price and trade-in allowance thru email and/or phone before I set foot on the dealer's lot. I do lots of research in advance and know exactly what kind of numbers I need from them before agreeing to a purchase. I always have a pre-approved loan from my credit union and the finance managers usually despise me by the time I leave their office because I NEVER agree to buy any of their inflated add-ons. I don't go to the dealership to make friends and typically leave without new ones, but it's just business.
Overall, very solid explanation. Here's one or two things I learned after purchasing a 2025 Corolla Hybrid just some 6 weeks ago. 1. When comparing dealer and credit union interest rates, remember that the credit union loan package usually offers it's own extended warranty product. Ours cost $800 versus the dealer's $2800 one. Therefore, if the dealer beats the interest by a 1/4 percent, it's usually far from enough. 2. If the dealer offers a killer interest rate, there can be a penalty for paying off the loan early. 3. No matter how nice sales people are in person, they will commit lies of omission to your face. They won't lie blatantly cuz that would be a lie they could called out on. It's the art of lying by omission.
IMHO, if you need an extended warranty to be able to afford a car, you can't afford that car in the first place. In a dozen plus new car purchases, all of them "unreliable" European cars, I have not had a single car where I would not have lost money on an extended warranty.
Pretty good video. A couple other things you can do: 1) If you’re financing and don’t have pre-approval from elsewhere, when the dealer shows you the APR, specifically ask what the “buy rate” is. Often, the dealer makes a lot of money by charging you a higher rate than the bank has said. 2) Always get another quote on your car before trading it in, from a place like Carvana or CarMax. I did that and told the dealer what I was offered ($3600), and they still low balled my trade at only $2000. Of course they listed the $2000 twice to try to make me think it was $4000. I ended up selling it to CarMax.
Dealing with car dealerships is probably the main reason why I buy a new car as rarely as I possibly can. I always buy new and then drive it into the ground. ANYTHING to avoid going to a dealership! If everyone was like me, I'm sure that they would make buying a car a more pleasant experience just to try to get more people to come in and buy a new car more often.
Out of all the car purchasing TH-cam channels I've watched, this 15 minute video was succinct with a clear and concise description of the purchasing process. I'm going to study this video and use it as a guide for additional research. The video comments are also helpful.
My daughter just bought a new minivan and avoided all of the dealership hassles. She had been doing some shopping and narrowed down the field to just one make and model when she contacted the dealership online and asked for the out the door price. After a bit of negotiating she had the price she thought was fair. (No big discounts as minivans are in short supply,) They decided not to trade in the older daily driver and walked into the dealer with a cashier's check for the agreed upon price and drove out with their new car. At one of the dealers that she visited while shopping, she noticed an item on all of the price stickers: ADP. She was told that it was the "Arizona Desert Package" that they included with all new vehicles. ADP = Additional Dealer Profit.
I live in s utah, and checking dealers in utah, Arizona and nevada. Most (maybe all) have all sorts of “dealer protection packages”, there is some negotiation about price but at the end it is a camouflaged price increase. Like a lot of reactions here: car dealers are liars!
I'm a mechanic and if I were given a new truck free and clear I'd sell it instantly. My newest trucks are 2000s on which of course I owe nothing. Paying off my homes and retiring at 47 was much more fun. I could buy new for cash but I do my own wrenching and despise the low quality, anti-mechanic aspects of new vehicles. See the many videos showing why mechanics are quitting the auto industry to be properly compensated for their technical skills.
47! That’s awesome, I thought I was doing good at 55. Yes, I will be keeping my 2006 Silverado along as I can. It’s simple, reliable. Paid for with cheap insurance and registration. I used to buy a new truck every few years until I realized I was being stupid. Now I’m retired early, and not working for other’s profits.
I'll keep this in mind if I'm ever in a car dealership. Every car I've purchased (and there have been many) has been used via private party. Negotiations take less than 5 minutes from start to finish. I'm 54 and have yet to buy a "new" car. This method has also saved me plenty of depreciation. I then drive them until the wheels fall off (occasionally after they do too!) as I was a mechanic in my younger career! The best part is every one has been made via payments...(one)!
Buying used does not save you depreciation. Buying used may result in you spending less money initially to purchase the vehicle. However, in the long run the savings from buying used is largely illusionary. A new vehicle should last longer resulting in you having to replace the vehicle over a longer period.
I don't buy any cars until they are 10 years old, I assess them carefully and then I drive them into the ground while maintaining them. I typically get another 100-200K miles out of them. I have never had a major issue with any car that I bought this way. I have several times gotten great deals on known easily fixable issues for models. I actually bought my last two vehicles from relatives at a good cost with absolutely known histories and maintenance background. It was a good deal for them (vs trade in) and a good deal for me. Unless you need new - and some people do, it makes sense to buy used if you can assess the vehicle well.
@@christopherhaak9824 Typical comment from someone who thinks they are experts at everything but know nothing about anything. Being able to work on your own vehicle is not relevant to the issue of buying used saving you depreciation. If you purchased new and work on your own vehicle that new vehicle will last far longer than that used vehicle. Just the facts.
Good video, with sage advice. I recently purchased a 2025 Honda HR-V, and worked exclusively with different dealership's internet sales managers. We had a suitable 'Out the Door' price before we set foot inside the dealer who offered the lowest price. The car was from incoming inventory. I went by and put some money down. When the car arrived several weeks later we went to pick it up with our trade. At this time I advised the dealer that things had changed, and we would now be paying cash. I could see the salesman's disappointment, however there were no issues completing the transaction, minimal upselling attempted from F&I, and we were done in short order. If you have done your homework and know what you want in a vehicle, perhaps even test-driven the car you want beforehand if needed, I highly recommend attempting to get a firm OTD price before setting foot in a dealership.
I bought a Tesla Model Y last month and the process was a breeze. Walked into their showroom, test drove a car for an hour. The full self driving was incredible! The car drove for 20 miles smoothly and perfectly! Incredible. We bought the car on the spot through the Tesla website. No negotiation. No add ons for undercoatings or extended warranty bs. The different finance plans were published. We got a 0% rate (promo). Plus a $1000 credit from a friends Tesla referral program referral. We got $7500 off from the federal tax credit also. We love the car and the at home charging experience versus having to go to a gas station. The price out the door was UNDER $35k. Our other option was a Toyota Camry. I left Toyota dealer 5 min after realizing the out the door price negotiation was starting at $45,900 and would likely go up after the add ons and the financing BS. It’s no wonder Tesla has the best selling car in the world, their approach is the future. Thank God they are an American company!
Great info! I just bought a new Hyundai and was given the out the door price on the phone which was honored when I got to the dealership. Hyundai has 1.9 % financing for the model and I did all the homework before I called the dealer. I'm not saying I got the absolute lowest price but it was a good price. I agree. we think we have the upper hand but they are trained professionals.
I got held hostage by the loan guy for 2 hours-and I didn't need the loan! Many are savage, very well trained, and quite sexist to boot. I will never go to a dealer alone again.
@@priestesslucy wrong again as usual, Lucy. Try reading what I wrote again. Getting what I think is fair for a trade-in is worth it to me. My time is more valuable to do things I enjoy vs selling a used car for a few hundred dollars extra. I also said if I don't get my price, financing and trade-in value I will leave; I've yet to find a dealer unwilling to meet all three more than two decades. You do you, if you need a few hundred dollars more in your trade-in vs your time and effort to sell it yourself, maybe you should just keep it, and not be buying a new car?
The best time to shop for car is the last day of the month, late afternoon if on Saturday, or in the evening on a weekday. Because they are tired, they want to get out of there and they want to sell another car and put another car on the books for the month. And you don’t wanna be kept there for hours. Before this, you’ve already done your shopping and research, and compared prices everywhere and online from various dealership.
I had very good experience about 33yrs ago when i bought my new car,the salesman was kind and explained everything without any sales pressure.I steered lot of my friends to him they all came out with new cars and very happy with there deals.Btw i still have that car i bought from him,its a ford mustang.🙂
This was a great primer as I will be in the market for a car in the next year. I am financing through my bank and will be pre approved. The idea is to carry the loan for 6 months then pay it off. I already know what make and model and year.....I will research the specific car and will probably be able to wait until I find just the right car w the trim pkg I am looking for. .
I bought 2 new cars from the same dealer. They were not liars and were up front during the buying process. Maybe that's why they are a large and successful dealership.
Just last month, I walked into a dealership thinking I'd get a great deal. Little did I know, they used the 'Four Circle Method' to upsell me on every possible add-on! It's crazy how these tactics can really add up.
When the finance officer says "so, how long do you intend to keep the car (setting up the sales pitch for an extended warranty) I always say "I don't know. Do you have a crystal ball that I can use?"
It is a rough world for car buyers. Most dealers look at a car purchase as an emotional decision. -Don’t do that!- Thanks, Geoff. Here is what I did with the last dealership. Called on a car that was competitively priced. (I was 80 miles away) No trade in, pre approval already given for the car, but they didn’t know it. Took care of the whole transaction via phone, the dealer delivered the car to my house, and the advertised price ended up being the out the door price. My CU financed the car at 2.25% over 6 years, total interest, $2700. Be prepared ahead of time, or just live with your old car. Before you buy, determine the mission of the car. While I don’t own a Tesla, my PHEV just did a trip from Boise, Idaho to Sacramento California, where my fuel economy was 52.7 mpg, and 5.47 miles per kWh when in EV mode. Mission accomplished.
Great post, thanks. A car typically devalues by 8-10% per year, so putting a loan against it at 8-15% each year for the next 5 is absolute financial madness. For financial freedom do not create debt on cars, don’t buy protection plans, refuse to pay add-ons like cleaning or admin fees.
It’s not all devaluation. What you are also losing on resale is the huge profit that was built into the sale. Dealerships, don’t want to talk about that. There are also taxes paid on the vehicle and title fees. There are a lot of junk fees that no one should ever pay.
Not me LOL!!!!! Excellent video. The problem for most people is they live on a payment amount and have no clue what they actually paid for the vehicle.
We avoided all of this by buying our cars through a fax attack. We faxed a whole bunch of dealers and had them bid on what we wanted. We had listed everything we wanted and did not go into the dealership except to pay cash. No trading no financing just the car. We did not listen to the people who said to come into the dealership to talk.
This is needed info for me. I'm getting ready to buy a new or used car next month as an early retirement gift to myself. It's something that I've planned and saved for the past 5 yrs. I'm planning on retiring in the next 1 - 3 yrs, but I want a different car now while I still have some life left in me 😅 I want to buy the car cash (check). The last time I bought a car in cash, I felt like I had to prove to the dealer that I wasn't a terrorist. I've heard they've calmed down about cash purchases but they lose $ with not being able to charge bank loan fees, etc. I'm a woman who can get intimidated when buying a car but my husband will be with me and he's like a pit bull with salespeople. I'm going to ask him to watch this video before we head out to the dealership. Thank you for making this!
Never heard it referred as Four Circle, it is the Four Square sales tactic. Good info in any instance. Consumer Reports has an excellent summary also to avoid getting ripped off.
I did all my negotiating online. I had 3 dealerships competing for my business. I the end, the new model year just came out but I bought the current model year for 4k less. All 3 had the same car in stock. That helped.
Excellent breakdown of the whole process. The shell game analogy is right on point. You nailed the other profit centers in the sale of a car many people don't pay any attention to. When a salesperson uses the 4 square or 4 circle method it indicates lazy selling and a structured scheme in progress. A sure sign that you're being set up is "word tracks" that seem harmless but are designed to steer you in a certain direction. The worst thing you can do is wander into a dealer to negotiate at the desk. Trust me you will usually lose that battle. Test drive a car, then leave. Do all negotiations by phone or email. Only return to the dealer to pick up a car if you have finalized the details remotely and in writing. Any dealer that insists you be in the showroom to negotiate is not the dealer you want to work with. That insistence is an admission that they know you have less bargaining power when you have to deal in person. They negotiate dozens of times a week - you, maybe once every few years.
I do one simple thing that worries them, bring out your own calculator and pen with a piece of paper. Instead of allowing them all to do the numbers you start writing them down yourself. They seem to really hate this, and I find the negotiations go much smoother when your not allowing them to control all the numbers themselves.
Very informative video. I was in the retail automobile sales business when the best %rate available was 17%. Simple interest, but very high. The rates were most people's financing concerns. One question I used to keep food on the table was... "If my boss could, would you?" I floated in and out of that business for 20+ years. I hated it. But loved the pay. It seemed like a lying contest between my prospects and management, with me as the liason. I might return to it once I hit full SS age, and don't have to worry about earning penalties from social security. ABC ... Always Be Closing
Great video. Great advice 👍🏼👍🏼👍🏼 First: always be ready to walk away. Don’t buy add ons. Personally not even gap insurance. I always go all the way until I have to sign. See the out the door price. I get up and set my own price accordingly. If there’s nothing they can do then i go to the next dealership. It takes me less than one hour. Salesperson vibe is very important. I love going to dealerships to play their game. Even when I’m not buying.
Beware of the “ Sense of urgency” sales tactic, particularly if you’re looking at a used car. The sales person will attempt to get you to believe that you need to buy ASAP because there will be someone else that will purchase the car in the very near future.
I do not consider myself a strong new car negotiator but one thing that I have found useful is taking my trade-in to Carmax before going to the dealer to buy a new car. In every case Carmax has given me a better buy price (good for 7 days) than the dealer ever offers me for the trade-in value. Of course, it probably does not help that I usually pay cash which - as I have learned from this video - makes it much less likely for the dealer to negotiate the trade-in value. From now on I do not divulge cash purchase until I get to the finance guy.
I had a pre-negotiated out the door price with a car buying service. It was itemized including tax. Salesman at the dealership was great over phone and with approvals and I only spent about 10 minutes with him when I went to pick it up. Until the finance office. They played every trick possible. The most egregious was when he prepared the final invoice. He had rejiggered all the numbers so my out the door price was now my pretax total, and then applied the sales tax to it. I called BS and almost walked out. He said it was an "honest mistake" but that took way too much work to be either mistake or honest. I got the agreed out the door price but the back office shenanigans were infuriating.
So how much did you pay that car buying service? One thousand is common. Seems foolish to pay someone to do something any reasonably knowledgable person can easily do for themselves.
Last car i bought (beginning of 2023) i walked in pre qualed from my bank. They asked me if i was going to finance and i told them we would talk about how to pay after we discussed otd price. We negotiated price (about 10k off list). After that, went into thenfinance managers office. I showed them my pre approval. They couldn't even come close to what my bank offered me and were up front about it. In and out in 45 minutes total. I know they made profit but i didn't pay their asking price.
We research the trim levels and then view price using Edmunds. We call the dealership to confirm the numbers and watch for any markups such as market adjustment. It the numbers are right then we make an appointment. Often the salesman is not there when we arrive. We wait for the sales manager and ask for confirmation with the finance guy. If the nums are good, we can do the deal. Note, we do not ever test drive the new car because that emotion clouds our judgement.
The problem in my region, its still a sellers market unless your buying a Chevy,Ford, or other below average quality brand. Those dealers were begging me to buy and dropped the price on my initial visit 12 to 15 percent. I told them that I had pretty much already made my mind up but was curious to see what deals were available. The quality models that are in short supply aren't budging and most have 2 to 12 week waits.
I read reports and evaluate mileage, cost to insure, reliability, etc. I try to be informed but still get frustrated. I buy new and drive a car for years and years and years! I decline all dealer add-ones; these are expensive costs and not needed. I get the lowest interest rate just in case of emergency and then quickly triple my payments as possible tp pay it off super early. I never buy emotionally. I am practical and buy based on realistic needs. A car is transportation and that is all it is. My husband sits back and lets me do the deals. So funny when they try to appeal to him but he tosses it back to me. He and I always discuss costs, etc. before we even get to a dealer.
Another area the dealer tries to make money is miscellaneous unnecessary upgrades…better floor mats, upgraded trim, pin stripes, seat scotch guarding and unnecessary undercoating etc. Honda dealer tried to pull that trick on my son. It was additional $2600 for what they called their “usual dealer package they do on all cars”.
If you are uncomfortable negotiating, or just very lazy, at minimum use a new car referral service like Trucar or Costco auto buying. It's not the best deal, but it a preset price, and free. At least you can save a few thousand by basically doing minimal work.
Last time I negotiate a car with the dealership, I first went to Car Max first and they gave me a written quote for my car that I was happy with. Once I negotiated the new car price they gave me a trade in quote which was $2,000 less than what Car Max quoted me. I handed them the quote and they agreed to it.
Car Max had a sell-value at $2,500.00 for my vehicle. My dealership sold it for $2,200.00 last week Monday, August 19, and gave me the cash that day. I also bought a used four door vehicle from them last month; low interest rate, low payments, with a great extended warranty through Chrysler, a six-year term but I'll have it paid off within 3 years. I worked in accounting and finance for 13 years, so that helps with understanding what I am up against with payments.
The last four vehicles we bought are from private sellers and a friend. We avoid car dealers as much as possible. There's always hidden charges and fees on top of their listing price.
Over the decades, we consumers have allowed, in fact enabled this to become as complex as it is. The one-stop mentality of letting them sell you not only the car, but the financing, the stupid after market add-ons like extended warranty, paint protection, etc, as well as trading in your old hooptie. Don't do all that additional stuff. Just buy the car from them. Make the process simple.
Its worse here, our economy is like a flailing fish, fighting for its life. The normal state of the U.S. economy is actually very bad. Because of this it goes into convulsive spasms fighting to grow any way it can out of desperation. Tricks, gimmicks, rule changes try to stimulate the economy and prevent it from falling but they only bring temporary relief to people since, when you factor in inflation we are declining.
People believe their currency has the worth it does because they have no other option. Even in a hyperinflationary environment, individuals must continue to use their hyperinflationary currency since they likely have minimal access to other currencies or gold/silver coins.
Inflation is gradually going to become part of us and due to that fact any money you keep in cash or in a low-interest account declines in value each year. Investing is the only way to make your money grow and unless you have an exceptionally high income, investing is the only way most people will ever have enough money to retire.
I've tried investing in the stock market several times but always got discouraged by fluctuations of stock value. I would be happy if you could advise me based on how you went about yours, as I am ready to go the passive income path.!!
My CFA NICOLE ANASTASIA PLUMLEE a renowned figure in her line of work. I recommend researching her credentials further... She has many years of experience and is a valuable resource for anyone looking to navigate the financial market..
Don't go to buy a car without doing research in advance. You are going to overpay, you just don't overpay too much. Spoiler, a car dealer isn't going to sell you a car if they are going to lose money. Imo, out the door price is the very important. If your car is paid off, sell it yourself vs trade in. Lastly, get pre approved for a loan you shopped for the best interest rate... unless you have 800+ credit score and qualify for OEM promotional financing.
My grandfather taught me how to talk to car dealers. i bought a brand new car when i made a bunch of money for the first time when i was young, and we went to the bank first to talk to them about a loan. i also had the cash to pay outright for the car. the bank offered me a .1% interest rate. so i had my options before i went in. lets just say, i realized they were willing to do what i wanted because they wanted the sale. at first they were offering a good amount for my trade in, when negotiations were over, they didnt want my trade in.
Last time I bought a car was 2005! and that was only because I got rear-ended TWICE over 1-month that 'totalled' my little celica. I guess I might go shopping, but...we'll see. My Acura TSX still solid as a rock. This is excellent advice video, I'm sure.
I never understood “negotiating” for the price of a car. i have a budget. I know how much I’m willing to pay for a car out the door-the total cost. I also know how much I think my old 😅car is worth. If I can buy the car at a price I can afford and get what I feel is a fair price for my current car I will buy the car. And I always pay the out-the-door price with the money I’ve withdrawn from my savings or get a low-interest loan from my credit union. I’m 75 years old and have purchased 7 cars in this way. I also purchased my first car with “payments” as I didn’t know any better. Negotiating with sharks when you’re a goldfish usually doesn’t pay off for the goldfish.
Every car I have ever purchased, I negotiated the price, and then paid for it in cash. The hard part is to get these dealers nailed down on the Out The Door price, since initially when I first started buying cars, the dealers would drag us through all these finance people that tried to add costs onto the car. More recently, I've just emailed these dealers, told them I wanted this particular model of car with these features, and what is the best Out The Door price they can offer? Literally Out The Door price, not a penny more or less. If they screw around, I'm out the door.
For those of you who arrived at the dealership in a car, don’t forget you can also leave in it. And” is this car so crappy that I need all these protection packages?”
Great video … lmao 🤣 Years before the Internet I was buying a new work truck for cash. I had got 2 other prices with all the accessories. On the way to an appointment with my wife, I was passing another dealership. I told the salesman that here is the vehicle I want to purchase. I explained that I only have limited time and I am only interested in the bottom line. The salesman started to go through his Stck and I said please I have to leave soon so what is the best price. After his third attempt to tell me all the usual BS, I took my wife arm and said let’s go. The salesman looked surprised and asked why we were leaving. I smiled and said, well I told you exactly what I wanted and you began to jerk me around. This salesman called me for 3 days trying to get me back, I told him sorry Pal you had your shot at the sale but only wasted our time. You’re totally correct, they are not your Friends…. Lol
Agree, you can make more money if you don’t sell at wholesale, but you are paying for convenience. Dealers make it easy to trade in your vehicle, handle the title, etc., and you don’t have to deal with strangers coming to your house to test drive vehicle.
In my state (Nebraska) you pay sales tax on the difference if you trade in at the dealer. If you don't trade in, you pay sales tax on the full amount. This can make a sizeable increase in the sales tax that you pay.
It depends. It can save you sales tax and the hassle of selling it yourself. If you have a high demand car in excellent condition, you can probably do better selling it yourself. If you have a car that has significant mechanical problems, you're better off trading it in.
I bought a new car once. Now I buy from individuals. They can lie too but are usually honest about the car. And they aren't trying to make a profit or an income. They just have a car they no longer want.
All of this just discourages me further from ever buying new again. And of course I would never finance a vehicle again. I did that for the final time 22 years ago.
Dealers make money on your financing. If you plan to pay cash, accept their financing wit a lower out the door price. Then pay off the loan after a couple months.
I was Realtor in Ohio 1993/2001. Sold 400 homes. Moved to Naples, Florida 2001. Applied at a large Ford Dealership in Ft. Myers for Sales job. Accepted for there 2 week training course. Left after 1 week. Training bordered on fraud. How to steal the trade, How to stretch out the payments to meet there monthly payment maximum and on and on. Basically, shove that car up there you know what. Whatever it takes. Disgusting. I took a job in another field. There could Dealerships for a good reason.
Another factor is the trade in value in many states is subtracted from the purchase price for sales tax computation. So if the sales tax is 7% and your trade in value is $10,000 that’s $700 less on the out the door price. It’s a sad incentive to trade in rather than sell the car yourself, but should be factored in. Surely this was passed by auto dealer lobbyists
I bought in 2021. The price was set before I stepped on the lot. I got $500 trade-in on an 17yr old car on its last legs that I was considering donating to charity. I considered getting it there under its own power a big win. Payment, they asked? My answer, "Don't care. All I care about is interest rate." I got 2.7% for 75 months, which was my "big" mistake. I could have gotten close to 2% for 60 months, on a note I ended up paying off in 2 yrs. It took over 2yrs for the online offers from places like Carvana to drop below what I paid out the door. This is the 4th car I've purchased in 35yrs. You really want to save money, get off the car merry-go-round. Buy a car and drive it until it dies (costs more to fix than it's worth) or keeping it running starts costing somewhere close to a car payment.
Last time I bought from a "stealer-ship" was 2001. Actually, I did buy my motorcycle from a dealer in 2009, but the transaction was on Ebay. They were still suffering from the recession and I got a bike with a MSRP $18,600 for $9,950.
Over the past couple of decades not a single sales person has pulled out the old four square sheet in an attempt to sell me a vehicle. Yes, car dealers still use the four square process to structure an offer to sell. But few still use the actual four square sheet.
Helpful and timely presentation. I am in the market for a car. Recently I went Enterprise Car Sales. I was impressed because car was well maintained, certified, in excellent condition, set price, included warranty and would accept trade in on my $2000 car which needed $2,000 of repairs. All sounds good to me. By the way, I would be paying cash. What am a missing?
Let them finance it so you can get a better price on the car as they will probably get a kickback from the finance company. If it's a good rate keep it, if not then refinance it the following week.If you were gonna pay cash, just make sure the financing doesn't have a penalty for early payoff and pay off the loan the following week.
anyone that walks in a dealer without having financing line up already is behind the 8 ball,love to see the sales people faces when i tell them that i already got financing from my bank.
So when you tell them that if they can beat your pre-approval rate, do you allow them to run credit on you? I literally hate every aspect of buying a car.
I got the dealership, had a mini van with intermittent transmission problem went to one dealer problem showed up when trying to trade in, they lowballed me. Went to another didn't show up, we wanted 500 more than they offered, they said so your going to blow the deal for 500, wife said no your gonna blow the deal for 500, we left, had a voice message on phone when we got home that they would agree, pre cell phone era, went back and got 2500 more for trade than 1st dealership offered. 😂😂😂😂
In all my car new buying experiences, I’ve found Honda dealers to be the most professional; they created the fairest, smoothest experience, purchasing from 2 different Honda dealerships. BMW was pretty good to deal with too. Ford and Hyundai dealers were much less so, and the one Chrysler dealer I dealt with was downright sleazy.
there are a couple things you missed.. I worked for banks that worked with dealers for financing for over 30 years. Dealers now charge a "Dealer Fee" that is a profit center. These can be anywhere from $200 to $1200 and are charged to all car buyers no matter what. Also, when trading in a car you do get some relief on the sales tax that is charged on the car you are purchasing depending on what they give you for it. Pre-approvals are not always a bargaining chip as dealers have access to "Wholesale" rates, where they can match or beat the "pre-approved" rate that is offered while still receiving a "flat fee" from the lender. besides the sale of the car, dealerships have many other profit centers including the service shop, body shop, parts center, and accessories.
I'm shopping for a new Toyota. The manager offered me a appearance protection package for $3100. There were some items in the package I wanted. I told the manager I didn't want this package, it's too expensive. He reduced the price but I said it still cost too much, I'll pass. Again he lowered the price. This time I made a counter offer and he accepted. So I got the appearance package for less than half of the original $3100 price. If you say NO enough times the price will come down, sometimes by a lot.
Oops, continued: ( hit send by accident ). No trade, so I picked up my truck in ,5 days, and refused every offer in the finance office. I drove that truck 10 years, almost 300K miles, and gave it away.
Beware of the initial advertise price to increase by 1,000.00. The salesperson will state that the advertised price is for military personnel -500.00 - and dealer loyalty 500.00. Don't accept this and insist the advertised price from the start.
Geoff, thank you; however, some further clarification is needed. With the high vehicle inventory these days, most dealers are offering extraordinarily low finance rates. No bank or credit union can compete with most dealer financing. What, then, does the letter of credit approval from a third party do for me? I can pay cash, so I'm most concerned and focused on the OTD price. Whether I finance some, all, or nothing, shouldn't affect the OTD price, though the dealer will probably try to convince me otherwise. How do I best handle the situation? Thanks very much.
One item about dealer profit Go at the end of the month .if dealer needs a.few more sales to meet his quota ,he receives a bonus from the manufacturer. He may be willing to give you a better price.
@@yestohappiness2721Not used cars, but they have pressure there as well. A sales rep and the sales manager have their quotas on used cars as well. There’s also the matter of “floor plan,” which is the money a dealer borrows to finance the cars they have on the lot, even used cars. A car that sits on the lot is costing them bucks for every day the car is on the lot, so the longer a car goes unsold, the more desperate a dealer might be to move it.
Number 1 truth in car buying, Only the OEM knows actual cost of any vehicle (I doubt the dealer knows) dealer invoice price is the closest a retail buyer can get. When I buy a new car MSRP means na-da to me, I deal invoice and dealer option cost up. I'm negotiating dealer profit margin. Dealer says no I'm out the door. Being honest with yourself is, jf you can't pay the loan off in 4 years, YOU CAN'T AFFORD THE NEW CAR! Shop at a car dealer not a car store that doesn't deal prices are set.
With the way of how expensive new and used cars are at the dealerships, I would consider buying from a private party. At least you can directly negotiate the price and don't have to deal with the pressures of being taken advantage of.
My wife and I were bored one Saturday and went to test drive a new vehicle I saw online. I did all the research, calculated a fair-trade amount and my ideal monthly payment. Test drove, liked the vehicle, so we let them do their song-and-dance routine. After some back and forth, they were $11 over my ideal payment. They tried and tried, but I wouldn't budge and we left. My wife bet me a romantic dinner that they would call me by the end of the following week because it was the end of the month, end of the quarter, and end of the fiscal year. Sure enough, the last day of the month, they caved, and I got the vehicle. And yes, I did take my wife for the romantic dinner too! I have to admit, it was kind of fun to see how far I could push them.
Nice. I also hold my ground with the salesman but then get worked over by the guy at the end trying to upsell everything. My God it's just so exhausting. I have yet to get a deal.
When I was 18 years old looking at a new Camaro the sales staff took my car keys and wouldn’t give them back. It was an extremely high pressure tactic to get me to buy. They even made an announcement on the intercom embarrassing me. This was 45 years ago. Nothing has really changed! The whole system is a train wreck.
@@HolySchmidt just the fact I am buying a car? But I said I was paying up front. I don’t remember signing any consent. Course a Toyota dealers do much worse, when they get ahold of your car through the years. I didn’t even finish my Toyota care.
accept their rate (this will give you more leverage in other areas)and then refinance with your credit union the next day, just make sure there is no pre-payment penalty.
I'll get the invoice from the salesperson and base my otd price on that. I always go through my own credit union and end up with a good monthly payment and they don't realize the payment works for me then i double the amount every month and its paid off before the warranty runs out.
I buy from Tesla using the website. No BS. Just order the car, head to the sales office and pick it up. No negotiating. The Tesla office is busy. The dealership next door has two idle sales guys standing out front deciding when to smoke their next cigarette. I can't imagine buying another car from a dealership. When I tried to order an EV pickup truck from Ford when the Lightening came out, the local dealership told me to call back in six months. Of course the reservation didn't secure the price. They were going to add on any second sticker they wanted. Dealers are garbage.
One thing that helps is to not be “married” to a specific car or brand. If the sales rep realizes you are locked in on a specific car from the start, they know they have the owner over you and can ply you with expensive add-ons, since you’ll be hard-pressed to walk away after you have so much emotional investment in that car. A sales rep’s worst nightmare is a person who is all over the place on what they want to purchase.
I am a senior citizen, and I have watched many of your videos. I cannot thank you enough for all your sound advice. Thank you so much!
I do sales (for another class of industry) and, in the end it is all about proper qualifying. Right in the beginning, I tell them that I work with sales also (you see their face changing immediately, because they know that basic magic wouldn't work). Then, all questions they ask, I answer with "it depends"... So pull the card of payment like this; "I can buy, I can lease, I can finance...it all depends on the total cost and eventual interest conditions"... so this, usually takes them off guard... also, let them know that old game of trying to get me when I leave the showroom, or calling me right after, it will decrease the price we were discussing by X... always, always, ask the "price out of the door"... so no funny games during signing....
Thanks for the comment
Perfect! I told people that I was an assistant to Dale Carnegie, sales training, they changed also. And they asked how they were doing. It was really funny.
It all comes to the down payment.
@@AshleySpeaks4U agree with you, if down payment ranges from 0 to 100% of the negotiated asset. Last 3 cars, I bought it paying in full after squeezing them to the price I had set. 🤣
@@judysbakeryandtestkitchen1654 Yes
I went to a dealer today. Left with no new vehicle. Now I remember why I don't like car shopping. Basically liars and thieves work in those places.
Exactly. You know when you walk in the door these folks are trying to assess if you are the low hanging fruit particularly if like me you are an old man. Every one knows this yet the car salesman are allowed to continue with apparently legal protection.
I hear you
They are trying to take advantage of you in every way they can. If they can't come to my terms I'm walking out of that Dealership. There are a dozen more Dealers in the area & when negotiating prices I'll be more ruthless than they are because its my money ! Agree on a sale price great. Trade in price is just as important. If we don't agree my legs work fine ! Don't ever fall in love with a vehicle. Let them know you'll walk.
Greed and materialistic are paramount in this society. You only have yourself to blame.
@@YouilAushana I disagree. It's MSM and corporate greed pushing consumerism
I always negotiate the out the door price and trade-in allowance thru email and/or phone before I set foot on the dealer's lot. I do lots of research in advance and know exactly what kind of numbers I need from them before agreeing to a purchase. I always have a pre-approved loan from my credit union and the finance managers usually despise me by the time I leave their office because I NEVER agree to buy any of their inflated add-ons. I don't go to the dealership to make friends and typically leave without new ones, but it's just business.
Nicely done!
I sold cars for 1000000 years. Your close. But the true answer is. Never buy from a dealer!
Overall, very solid explanation. Here's one or two things I learned after purchasing a 2025 Corolla Hybrid just some 6 weeks ago. 1. When comparing dealer and credit union interest rates, remember that the credit union loan package usually offers it's own extended warranty product. Ours cost $800 versus the dealer's $2800 one. Therefore, if the dealer beats the interest by a 1/4 percent, it's usually far from enough. 2. If the dealer offers a killer interest rate, there can be a penalty for paying off the loan early. 3. No matter how nice sales people are in person, they will commit lies of omission to your face. They won't lie blatantly cuz that would be a lie they could called out on. It's the art of lying by omission.
IMHO, if you need an extended warranty to be able to afford a car, you can't afford that car in the first place. In a dozen plus new car purchases, all of them "unreliable" European cars, I have not had a single car where I would not have lost money on an extended warranty.
Pretty good video. A couple other things you can do:
1) If you’re financing and don’t have pre-approval from elsewhere, when the dealer shows you the APR, specifically ask what the “buy rate” is. Often, the dealer makes a lot of money by charging you a higher rate than the bank has said.
2) Always get another quote on your car before trading it in, from a place like Carvana or CarMax. I did that and told the dealer what I was offered ($3600), and they still low balled my trade at only $2000. Of course they listed the $2000 twice to try to make me think it was $4000. I ended up selling it to CarMax.
Dealing with car dealerships is probably the main reason why I buy a new car as rarely as I possibly can. I always buy new and then drive it into the ground. ANYTHING to avoid going to a dealership! If everyone was like me, I'm sure that they would make buying a car a more pleasant experience just to try to get more people to come in and buy a new car more often.
Out of all the car purchasing TH-cam channels I've watched, this 15 minute video was succinct with a clear and concise description of the purchasing process. I'm going to study this video and use it as a guide for additional research. The video comments are also helpful.
My daughter just bought a new minivan and avoided all of the dealership hassles. She had been doing some shopping and narrowed down the field to just one make and model when she contacted the dealership online and asked for the out the door price. After a bit of negotiating she had the price she thought was fair. (No big discounts as minivans are in short supply,) They decided not to trade in the older daily driver and walked into the dealer with a cashier's check for the agreed upon price and drove out with their new car.
At one of the dealers that she visited while shopping, she noticed an item on all of the price stickers: ADP. She was told that it was the "Arizona Desert Package" that they included with all new vehicles.
ADP = Additional Dealer Profit.
Ha!
I live in s utah, and checking dealers in utah, Arizona and nevada. Most (maybe all) have all sorts of “dealer protection packages”, there is some negotiation about price but at the end it is a camouflaged price increase. Like a lot of reactions here: car dealers are liars!
Good to hear minivans are in short supply. Most SUVs are just minivans at a highly inflated price. Maybe folks are finally figuring that out.
I hate dealing with car dealers so much that I’m driving a 20 year old truck even though I could buy a new one.
All old stuff here, all of us.
I'm a mechanic and if I were given a new truck free and clear I'd sell it instantly. My newest trucks are 2000s on which of course I owe nothing. Paying off my homes and retiring at 47 was much more fun. I could buy new for cash but I do my own wrenching and despise the low quality, anti-mechanic aspects of new vehicles. See the many videos showing why mechanics are quitting the auto industry to be properly compensated for their technical skills.
47! That’s awesome, I thought I was doing good at 55. Yes, I will be keeping my 2006 Silverado along as I can. It’s simple, reliable. Paid for with cheap insurance and registration. I used to buy a new truck every few years until I realized I was being stupid. Now I’m retired early, and not working for other’s profits.
U R a smart man.
If you hate dealers but want a new car, just send your wife and stay at home drinking a beer till she brings your new car. Just saying.
I'll keep this in mind if I'm ever in a car dealership. Every car I've purchased (and there have been many) has been used via private party. Negotiations take less than 5 minutes from start to finish. I'm 54 and have yet to buy a "new" car. This method has also saved me plenty of depreciation. I then drive them until the wheels fall off (occasionally after they do too!) as I was a mechanic in my younger career! The best part is every one has been made via payments...(one)!
Nice
Buying used does not save you depreciation. Buying used may result in you spending less money initially to purchase the vehicle. However, in the long run the savings from buying used is largely illusionary. A new vehicle should last longer resulting in you having to replace the vehicle over a longer period.
@@jerrylundegaard2592 That's complete BS, particularly for someone who can work on their own vehicles
I don't buy any cars until they are 10 years old, I assess them carefully and then I drive them into the ground while maintaining them. I typically get another 100-200K miles out of them. I have never had a major issue with any car that I bought this way. I have several times gotten great deals on known easily fixable issues for models. I actually bought my last two vehicles from relatives at a good cost with absolutely known histories and maintenance background. It was a good deal for them (vs trade in) and a good deal for me. Unless you need new - and some people do, it makes sense to buy used if you can assess the vehicle well.
@@christopherhaak9824 Typical comment from someone who thinks they are experts at everything but know nothing about anything.
Being able to work on your own vehicle is not relevant to the issue of buying used saving you depreciation.
If you purchased new and work on your own vehicle that new vehicle will last far longer than that used vehicle. Just the facts.
Good video, with sage advice. I recently purchased a 2025 Honda HR-V, and worked exclusively with different dealership's internet sales managers. We had a suitable 'Out the Door' price before we set foot inside the dealer who offered the lowest price. The car was from incoming inventory. I went by and put some money down. When the car arrived several weeks later we went to pick it up with our trade. At this time I advised the dealer that things had changed, and we would now be paying cash. I could see the salesman's disappointment, however there were no issues completing the transaction, minimal upselling attempted from F&I, and we were done in short order. If you have done your homework and know what you want in a vehicle, perhaps even test-driven the car you want beforehand if needed, I highly recommend attempting to get a firm OTD price before setting foot in a dealership.
I bought a Tesla Model Y last month and the process was a breeze. Walked into their showroom, test drove a car for an hour. The full self driving was incredible! The car drove for 20 miles smoothly and perfectly! Incredible. We bought the car on the spot through the Tesla website. No negotiation. No add ons for undercoatings or extended warranty bs. The different finance plans were published. We got a 0% rate (promo). Plus a $1000 credit from a friends Tesla referral program referral. We got $7500 off from the federal tax credit also. We love the car and the at home charging experience versus having to go to a gas station. The price out the door was UNDER $35k. Our other option was a Toyota Camry. I left Toyota dealer 5 min after realizing the out the door price negotiation was starting at $45,900 and would likely go up after the add ons and the financing BS. It’s no wonder Tesla has the best selling car in the world, their approach is the future. Thank God they are an American company!
Great info! I just bought a new Hyundai and was given the out the door price on the phone which was honored when I got to the dealership. Hyundai has 1.9 % financing for the model and I did all the homework before I called the dealer. I'm not saying I got the absolute lowest price but it was a good price. I agree. we think we have the upper hand but they are trained professionals.
Great rate!
I got held hostage by the loan guy for 2 hours-and I didn't need the loan! Many are savage, very well trained, and quite sexist to boot. I will never go to a dealer alone again.
Jeez!
that's when you leave; after 10 minutes max
@zoomzoom3950 don't come with a trade-in and never hand over your keys 😂
@@priestesslucy wrong again as usual, Lucy. Try reading what I wrote again.
Getting what I think is fair for a trade-in is worth it to me. My time is more valuable to do things I enjoy vs selling a used car for a few hundred dollars extra.
I also said if I don't get my price, financing and trade-in value I will leave; I've yet to find a dealer unwilling to meet all three more than two decades.
You do you, if you need a few hundred dollars more in your trade-in vs your time and effort to sell it yourself, maybe you should just keep it, and not be buying a new car?
@@priestesslucy Right!!!
The best time to shop for car is the last day of the month, late afternoon if on Saturday, or in the evening on a weekday. Because they are tired, they want to get out of there and they want to sell another car and put another car on the books for the month. And you don’t wanna be kept there for hours. Before this, you’ve already done your shopping and research, and compared prices everywhere and online from various dealership.
Turn the urgency tables
I had very good experience about 33yrs ago when i bought my new car,the salesman was kind and explained everything without any sales pressure.I steered lot of my friends to him they all came out with new cars and very happy with there deals.Btw i still have that car i bought from him,its a ford mustang.🙂
Love the ‘stang!
This was a great primer as I will be in the market for a car in the next year. I am financing through my bank and will be pre approved. The idea is to carry the loan for 6 months then pay it off. I already know what make and model and year.....I will research the specific car and will probably be able to wait until I find just the right car w the trim pkg I am looking for. .
I bought 2 new cars from the same dealer. They were not liars and were up front during the buying process. Maybe that's why they are a large and successful dealership.
Thank you and love driving it.@@HolySchmidt
Just last month, I walked into a dealership thinking I'd get a great deal. Little did I know, they used the 'Four Circle Method' to upsell me on every possible add-on! It's crazy how these tactics can really add up.
When the finance officer says "so, how long do you intend to keep the car (setting up the sales pitch for an extended warranty) I always say "I don't know. Do you have a crystal ball that I can use?"
It is a rough world for car buyers. Most dealers look at a car purchase as an emotional decision.
-Don’t do that!-
Thanks, Geoff. Here is what I did with the last dealership. Called on a car that was competitively priced. (I was 80 miles away) No trade in, pre approval already given for the car, but they didn’t know it. Took care of the whole transaction via phone, the dealer delivered the car to my house, and the advertised price ended up being the out the door price. My CU financed the car at 2.25% over 6 years, total interest, $2700.
Be prepared ahead of time, or just live with your old car. Before you buy, determine the mission of the car.
While I don’t own a Tesla, my PHEV just did a trip from Boise, Idaho to Sacramento California, where my fuel economy was 52.7 mpg, and 5.47 miles per kWh when in EV mode.
Mission accomplished.
Great post, thanks. A car typically devalues by 8-10% per year, so putting a loan against it at 8-15% each year for the next 5 is absolute financial madness. For financial freedom do not create debt on cars, don’t buy protection plans, refuse to pay add-ons like cleaning or admin fees.
It’s not all devaluation. What you are also losing on resale is the huge profit that was built into the sale. Dealerships, don’t want to talk about that. There are also taxes paid on the vehicle and title fees. There are a lot of junk fees that no one should ever pay.
Not me LOL!!!!! Excellent video. The problem for most people is they live on a payment amount and have no clue what they actually paid for the vehicle.
Preaching to the choir!
Its only $257 / m..... ))))
We avoided all of this by buying our cars through a fax attack. We faxed a whole bunch of dealers and had them bid on what we wanted. We had listed everything we wanted and did not go into the dealership except to pay cash. No trading no financing just the car. We did not listen to the people who said to come into the dealership to talk.
I do the same only online. No price, no sale. Not playing their game. Lowest bid wins.
This is needed info for me. I'm getting ready to buy a new or used car next month as an early retirement gift to myself. It's something that I've planned and saved for the past 5 yrs. I'm planning on retiring in the next 1 - 3 yrs, but I want a different car now while I still have some life left in me 😅
I want to buy the car cash (check). The last time I bought a car in cash, I felt like I had to prove to the dealer that I wasn't a terrorist. I've heard they've calmed down about cash purchases but they lose $ with not being able to charge bank loan fees, etc.
I'm a woman who can get intimidated when buying a car but my husband will be with me and he's like a pit bull with salespeople. I'm going to ask him to watch this video before we head out to the dealership.
Thank you for making this!
Never heard it referred as Four Circle, it is the Four Square sales tactic. Good info in any instance. Consumer Reports has an excellent summary also to avoid getting ripped off.
I did all my negotiating online. I had 3 dealerships competing for my business. I the end, the new model year just came out but I bought the current model year for 4k less. All 3 had the same car in stock. That helped.
Excellent breakdown of the whole process. The shell game analogy is right on point. You nailed the other profit centers in the sale of a car many people don't pay any attention to. When a salesperson uses the 4 square or 4 circle method it indicates lazy selling and a structured scheme in progress. A sure sign that you're being set up is "word tracks" that seem harmless but are designed to steer you in a certain direction. The worst thing you can do is wander into a dealer to negotiate at the desk. Trust me you will usually lose that battle. Test drive a car, then leave. Do all negotiations by phone or email. Only return to the dealer to pick up a car if you have finalized the details remotely and in writing. Any dealer that insists you be in the showroom to negotiate is not the dealer you want to work with. That insistence is an admission that they know you have less bargaining power when you have to deal in person. They negotiate dozens of times a week - you, maybe once every few years.
A good reminder, good video, thank you for being a voice of reason in an unreasonable world!
I try!
I do one simple thing that worries them, bring out your own calculator and pen with a piece of paper. Instead of allowing them all to do the numbers you start writing them down yourself. They seem to really hate this, and I find the negotiations go much smoother when your not allowing them to control all the numbers themselves.
Mirroring! Brilliant
Very informative video.
I was in the retail automobile sales business when the best %rate available was 17%. Simple interest, but very high.
The rates were most people's financing concerns.
One question I used to keep food on the table was...
"If my boss could, would you?"
I floated in and out of that business for 20+ years. I hated it. But loved the pay.
It seemed like a lying contest between my prospects and management, with me as the liason.
I might return to it once I hit full SS age, and don't have to worry about earning penalties from social security.
ABC ... Always Be Closing
Glengarry Glen Ross!
@@HolySchmidt ... Holy Macadamia Nut!
I'm super flattered that you'd respond to something I wrote.
Not sure my day can get any better.
TYVM
Great video. Great advice 👍🏼👍🏼👍🏼
First: always be ready to walk away. Don’t buy add ons. Personally not even gap insurance. I always go all the way until I have to sign. See the out the door price. I get up and set my own price accordingly. If there’s nothing they can do then i go to the next dealership. It takes me less than one hour. Salesperson vibe is very important. I love going to dealerships to play their game. Even when I’m not buying.
Beware of the “ Sense of urgency” sales tactic, particularly if you’re looking at a used car.
The sales person will attempt to get you to believe that you need to buy ASAP because there will be someone else that will purchase the car in the very near future.
True . Never set your eyes on a car you think you have to buy . I went back and forth 3 weeks with them.
Good advice!
They pulled that on us. Tried to. I said, "But he is not here and I am and I have my checkbook."
What did the 5 fingers say to the face?
Well structured presentation as always!
Thanks LB!
I do not consider myself a strong new car negotiator but one thing that I have found useful is taking my trade-in to Carmax before going to the dealer to buy a new car. In every case Carmax has given me a better buy price (good for 7 days) than the dealer ever offers me for the trade-in value. Of course, it probably does not help that I usually pay cash which - as I have learned from this video - makes it much less likely for the dealer to negotiate the trade-in value. From now on I do not divulge cash purchase until I get to the finance guy.
Thanks for the comment
Carmax is a low bidder too. Learn to negotiate. Rookie
I had a pre-negotiated out the door price with a car buying service. It was itemized including tax. Salesman at the dealership was great over phone and with approvals and I only spent about 10 minutes with him when I went to pick it up. Until the finance office. They played every trick possible. The most egregious was when he prepared the final invoice. He had rejiggered all the numbers so my out the door price was now my pretax total, and then applied the sales tax to it. I called BS and almost walked out. He said it was an "honest mistake" but that took way too much work to be either mistake or honest. I got the agreed out the door price but the back office shenanigans were infuriating.
So how much did you pay that car buying service? One thousand is common. Seems foolish to pay someone to do something any reasonably knowledgable person can easily do for themselves.
Last car i bought (beginning of 2023) i walked in pre qualed from my bank. They asked me if i was going to finance and i told them we would talk about how to pay after we discussed otd price. We negotiated price (about 10k off list). After that, went into thenfinance managers office. I showed them my pre approval. They couldn't even come close to what my bank offered me and were up front about it. In and out in 45 minutes total. I know they made profit but i didn't pay their asking price.
Great story!
They almost always can match your preapproved rate. They get their financing from the same banks that you do.
We research the trim levels and then view price using Edmunds. We call the dealership to confirm the numbers and watch for any markups such as market adjustment. It the numbers are right then we make an appointment. Often the salesman is not there when we arrive. We wait for the sales manager and ask for confirmation with the finance guy. If the nums are good, we can do the deal. Note, we do not ever test drive the new car because that emotion clouds our judgement.
The problem in my region, its still a sellers market unless your buying a Chevy,Ford, or other below average quality brand. Those dealers were begging me to buy and dropped the price on my initial visit 12 to 15 percent. I told them that I had pretty much already made my mind up but was curious to see what deals were available. The quality models that are in short supply aren't budging and most have 2 to 12 week waits.
I read reports and evaluate mileage, cost to insure, reliability, etc. I try to be informed but still get frustrated. I buy new and drive a car for years and years and years! I decline all dealer add-ones; these are expensive costs and not needed. I get the lowest interest rate just in case of emergency and then quickly triple my payments as possible tp pay it off super early. I never buy emotionally. I am practical and buy based on realistic needs. A car is transportation and that is all it is. My husband sits back and lets me do the deals. So funny when they try to appeal to him but he tosses it back to me. He and I always discuss costs, etc. before we even get to a dealer.
Love that your husband does that, I can imagine the look on the sales person’s face lol 😂
Another area the dealer tries to make money is miscellaneous unnecessary upgrades…better floor mats, upgraded trim, pin stripes, seat scotch guarding and unnecessary undercoating etc. Honda dealer tried to pull that trick on my son. It was additional $2600 for what they called their “usual dealer package they do on all cars”.
Interesting. Thanks for the comment.
If you are uncomfortable negotiating, or just very lazy, at minimum use a new car referral service like Trucar or Costco auto buying. It's not the best deal, but it a preset price, and free. At least you can save a few thousand by basically doing minimal work.
Last time I negotiate a car with the dealership, I first went to Car Max first and they gave me a written quote for my car that I was happy with. Once I negotiated the new car price they gave me a trade in quote which was $2,000 less than what Car Max quoted me. I handed them the quote and they agreed to it.
Carmax was low too. Learn to negotiate
@@valvodka😂behind the 8-ball huh? Carnac doesn’t negotiate. Take it or leave it.
Car Max had a sell-value at $2,500.00 for my vehicle. My dealership sold it for $2,200.00 last week Monday, August 19, and gave me the cash that day. I also bought a used four door vehicle from them last month; low interest rate, low payments, with a great extended warranty through Chrysler, a six-year term but I'll have it paid off within 3 years. I worked in accounting and finance for 13 years, so that helps with understanding what I am up against with payments.
The last four vehicles we bought are from private sellers and a friend. We avoid car dealers as much as possible. There's always hidden charges and fees on top of their listing price.
Totally agree!
Nicely done
Over the decades, we consumers have allowed, in fact enabled this to become as complex as it is. The one-stop mentality of letting them sell you not only the car, but the financing, the stupid after market add-ons like extended warranty, paint protection, etc, as well as trading in your old hooptie. Don't do all that additional stuff. Just buy the car from them. Make the process simple.
Wise words
Its worse here, our economy is like a flailing fish, fighting for its life. The normal state of the U.S. economy is actually very bad. Because of this it goes into convulsive spasms fighting to grow any way it can out of desperation. Tricks, gimmicks, rule changes try to stimulate the economy and prevent it from falling but they only bring temporary relief to people since, when you factor in inflation we are declining.
People believe their currency has the worth it does because they have no other option. Even in a hyperinflationary environment, individuals must continue to use their hyperinflationary currency since they likely have minimal access to other currencies or gold/silver coins.
Inflation is gradually going to become part of us and due to that fact any money you keep in cash or in a low-interest account declines in value each year. Investing is the only way to make your money grow and unless you have an exceptionally high income, investing is the only way most people will ever have enough money to retire.
I've tried investing in the stock market several times but always got discouraged by fluctuations of stock value. I would be happy if you could advise me based on how you went about yours, as I am ready to go the passive income path.!!
My CFA NICOLE ANASTASIA PLUMLEE a renowned figure in her line of work. I recommend researching her credentials further... She has many years of experience and is a valuable resource for anyone looking to navigate the financial market..
I just looked her up on the web and I would say she really has an impressive background in investing. I will write her an email shortly.
Don't go to buy a car without doing research in advance. You are going to overpay, you just don't overpay too much. Spoiler, a car dealer isn't going to sell you a car if they are going to lose money. Imo, out the door price is the very important. If your car is paid off, sell it yourself vs trade in. Lastly, get pre approved for a loan you shopped for the best interest rate... unless you have 800+ credit score and qualify for OEM promotional financing.
My grandfather taught me how to talk to car dealers. i bought a brand new car when i made a bunch of money for the first time when i was young, and we went to the bank first to talk to them about a loan. i also had the cash to pay outright for the car. the bank offered me a .1% interest rate. so i had my options before i went in. lets just say, i realized they were willing to do what i wanted because they wanted the sale. at first they were offering a good amount for my trade in, when negotiations were over, they didnt want my trade in.
Last time I bought a car was 2005! and that was only because I got rear-ended TWICE over 1-month that 'totalled' my little celica. I guess I might go shopping, but...we'll see. My Acura TSX still solid as a rock. This is excellent advice video, I'm sure.
I never understood “negotiating” for the price of a car.
i have a budget. I know how much I’m willing to pay for a car out the door-the total cost. I also know how much I think my old 😅car is worth.
If I can buy the car at a price I can afford and get what I feel is a fair price for my current car I will buy the car.
And I always pay the out-the-door price with the money I’ve withdrawn from my savings or get a low-interest loan from my credit union.
I’m 75 years old and have purchased 7 cars in this way. I also purchased my first car with “payments” as I didn’t know any better.
Negotiating with sharks when you’re a goldfish usually doesn’t pay off for the goldfish.
Every car I have ever purchased, I negotiated the price, and then paid for it in cash. The hard part is to get these dealers nailed down on the Out The Door price, since initially when I first started buying cars, the dealers would drag us through all these finance people that tried to add costs onto the car. More recently, I've just emailed these dealers, told them I wanted this particular model of car with these features, and what is the best Out The Door price they can offer? Literally Out The Door price, not a penny more or less. If they screw around, I'm out the door.
For those of you who arrived at the dealership in a car, don’t forget you can also leave in it. And” is this car so crappy that I need all these protection packages?”
Great video … lmao 🤣
Years before the Internet I was buying a new work truck for cash.
I had got 2 other prices with all the accessories.
On the way to an appointment with my wife, I was passing another dealership.
I told the salesman that here is the vehicle I want to purchase.
I explained that I only have limited time and I am only interested in the bottom line.
The salesman started to go through his Stck and I said please I have to leave soon so what is the best price.
After his third attempt to tell me all the usual BS, I took my wife arm and said let’s go.
The salesman looked surprised and asked why we were leaving.
I smiled and said, well I told you exactly what I wanted and you began to jerk me around.
This salesman called me for 3 days trying to get me back, I told him sorry Pal you had your shot at the sale but only wasted our time.
You’re totally correct, they are not your Friends…. Lol
Quick Question: How do you negotiate the value of your vehicle? Is there a Holy Grail Car Value Tool that you use?
Is KBB a good resource for finding out trade in values and fair prices of used and new cars?
Never ever trade your car to the dealership.
No truer words…
@@HolySchmidt You will lose money.
Agree, you can make more money if you don’t sell at wholesale, but you are paying for convenience. Dealers make it easy to trade in your vehicle, handle the title, etc., and you don’t have to deal with strangers coming to your house to test drive vehicle.
In my state (Nebraska) you pay sales tax on the difference if you trade in at the dealer. If you don't trade in, you pay sales tax on the full amount. This can make a sizeable increase in the sales tax that you pay.
It depends. It can save you sales tax and the hassle of selling it yourself. If you have a high demand car in excellent condition, you can probably do better selling it yourself. If you have a car that has significant mechanical problems, you're better off trading it in.
Good to know. Are car buying services worth it ?
I suppose it depends. I might research it!
I bought a new car once. Now I buy from individuals. They can lie too but are usually honest about the car. And they aren't trying to make a profit or an income. They just have a car they no longer want.
All of this just discourages me further from ever buying new again. And of course I would never finance a vehicle again. I did that for the final time 22 years ago.
Dealers make money on your financing. If you plan to pay cash, accept their financing wit a lower out the door price. Then pay off the loan after a couple months.
I was Realtor in Ohio 1993/2001. Sold 400 homes. Moved to Naples, Florida 2001. Applied at a large Ford Dealership in Ft. Myers for Sales job. Accepted for there 2 week training course. Left after 1 week. Training bordered on fraud. How to steal the trade, How to stretch out the payments to meet there monthly payment maximum and on and on. Basically, shove that car up there you know what. Whatever it takes. Disgusting. I took a job in another field. There could Dealerships for a good reason.
Great information. Thank you for sharing your knowledge and experience. Good bless you.
You hit this one out of the park
Thanks Wild!
Another factor is the trade in value in many states is subtracted from the purchase price for sales tax computation. So if the sales tax is 7% and your trade in value is $10,000 that’s $700 less on the out the door price. It’s a sad incentive to trade in rather than sell the car yourself, but should be factored in. Surely this was passed by auto dealer lobbyists
I bought in 2021. The price was set before I stepped on the lot.
I got $500 trade-in on an 17yr old car on its last legs that I was considering donating to charity. I considered getting it there under its own power a big win.
Payment, they asked? My answer, "Don't care. All I care about is interest rate." I got 2.7% for 75 months, which was my "big" mistake. I could have gotten close to 2% for 60 months, on a note I ended up paying off in 2 yrs.
It took over 2yrs for the online offers from places like Carvana to drop below what I paid out the door.
This is the 4th car I've purchased in 35yrs. You really want to save money, get off the car merry-go-round. Buy a car and drive it until it dies (costs more to fix than it's worth) or keeping it running starts costing somewhere close to a car payment.
Last time I bought from a "stealer-ship" was 2001. Actually, I did buy my motorcycle from a dealer in 2009, but the transaction was on Ebay. They were still suffering from the recession and I got a bike with a MSRP $18,600 for $9,950.
very interesting, and a subject I am interested in at this very moment. thank you for all the work and sharing.
Over the past couple of decades not a single sales person has pulled out the old four square sheet in an attempt to sell me a vehicle. Yes, car dealers still use the four square process to structure an offer to sell. But few still use the actual four square sheet.
So how do you approach a cash purchase?
Keep it ambiguous…
Omgeeee!!! Can you please come car shopping with my husband and I? We are just so bad at this game.😂😂😂
Helpful and timely presentation.
I am in the market for a car.
Recently I went Enterprise Car Sales. I was impressed because car was well maintained, certified, in excellent condition, set price, included warranty and would accept trade in on my $2000 car which needed $2,000 of repairs.
All sounds good to me. By the way, I would be paying cash.
What am a missing?
Enterprise cars have been driven hard and put away wet (they sell used rental cars)
Buying a vehicle from a rental agency is always risky. No matter how well they are maintained you have no idea how they have been driven.
Let them finance it so you can get a better price on the car as they will probably get a kickback from the finance company. If it's a good rate keep it, if not then refinance it the following week.If you were gonna pay cash, just make sure the financing doesn't have a penalty for early payoff and pay off the loan the following week.
Neat idea!
anyone that walks in a dealer without having financing line up already is behind the 8 ball,love to see the sales people faces when i tell them that i already got financing from my bank.
So when you tell them that if they can beat your pre-approval rate, do you allow them to run credit on you? I literally hate every aspect of buying a car.
you can so no, I'm staying with the bank/credit union that you are pre-approved with and will bring them a check once you review the numbers.
Four squares on a sheet of paper was used for decades. Havent seen this form, but it worked the same.
I got the dealership, had a mini van with intermittent transmission problem went to one dealer problem showed up when trying to trade in, they lowballed me. Went to another didn't show up, we wanted 500 more than they offered, they said so your going to blow the deal for 500, wife said no your gonna blow the deal for 500, we left, had a voice message on phone when we got home that they would agree, pre cell phone era, went back and got 2500 more for trade than 1st dealership offered. 😂😂😂😂
I highly recommend reading What Car Dealers Don't Want You to Know by Mark Eskeldson. Lots of good info like this.
In all my car new buying experiences, I’ve found Honda dealers to be the most professional; they created the fairest, smoothest experience, purchasing from 2 different Honda dealerships. BMW was pretty good to deal with too. Ford and Hyundai dealers were much less so, and the one Chrysler dealer I dealt with was downright sleazy.
there are a couple things you missed.. I worked for banks that worked with dealers for financing for over 30 years. Dealers now charge a "Dealer Fee" that is a profit center. These can be anywhere from $200 to $1200 and are charged to all car buyers no matter what. Also, when trading in a car you do get some relief on the sales tax that is charged on the car you are purchasing depending on what they give you for it. Pre-approvals are not always a bargaining chip as dealers have access to "Wholesale" rates, where they can match or beat the "pre-approved" rate that is offered while still receiving a "flat fee" from the lender. besides the sale of the car, dealerships have many other profit centers including the service shop, body shop, parts center, and accessories.
I'm shopping for a new Toyota. The manager offered me a appearance protection package for $3100. There were some items in the package I wanted. I told the manager I didn't want this package, it's too expensive. He reduced the price but I said it still cost too much, I'll pass. Again he lowered the price. This time I made a counter offer and he accepted. So I got the appearance package for less than half of the original $3100 price. If you say NO enough times the price will come down, sometimes by a lot.
Oops, continued: ( hit send by accident ). No trade, so I picked up my truck in ,5 days, and refused every offer in the finance office. I drove that truck 10 years, almost 300K miles, and gave it away.
Excellent video! Thanks
You bet
I bought a new car last year. The finance guy would not let me out of the office ! And got angry when I kept saying "no" to his pitches.
❤ Been there several times, I always enjoy 👍😎✊
Beware of the initial advertise price to increase by 1,000.00. The salesperson will state that the advertised price is for military personnel -500.00 - and dealer loyalty 500.00. Don't accept this and insist the advertised price from the start.
that has to be disclosed in the fine print of the ad
Good advice. But, when do you know you hit the wall on the OTD price?
Geoff, thank you; however, some further clarification is needed. With the high vehicle inventory these days, most dealers are offering extraordinarily low finance rates. No bank or credit union can compete with most dealer financing. What, then, does the letter of credit approval from a third party do for me? I can pay cash, so I'm most concerned and focused on the OTD price. Whether I finance some, all, or nothing, shouldn't affect the OTD price, though the dealer will probably try to convince me otherwise. How do I best handle the situation? Thanks very much.
One item about dealer profit
Go at the end of the month .if dealer needs a.few more sales to meet his quota ,he receives a bonus from the manufacturer.
He may be willing to give you a better price.
is that just for new cars or also used cars?
@@yestohappiness2721Not used cars, but they have pressure there as well. A sales rep and the sales manager have their quotas on used cars as well. There’s also the matter of “floor plan,” which is the money a dealer borrows to finance the cars they have on the lot, even used cars. A car that sits on the lot is costing them bucks for every day the car is on the lot, so the longer a car goes unsold, the more desperate a dealer might be to move it.
Number 1 truth in car buying, Only the OEM knows actual cost of any vehicle (I doubt the dealer knows) dealer invoice price is the closest a retail buyer can
get. When I buy a new car MSRP means na-da to me, I deal invoice and dealer option cost up. I'm negotiating dealer profit margin. Dealer says no I'm out
the door. Being honest with yourself is, jf you can't pay the loan off in 4 years, YOU CAN'T AFFORD THE NEW CAR! Shop at a car dealer not a car store
that doesn't deal prices are set.
With the way of how expensive new and used cars are at the dealerships, I would consider buying from a private party. At least you can directly negotiate the price and don't have to deal with the pressures of being taken advantage of.
Solid advice and excellent explanations. I will be able to make good use of this.
My wife and I were bored one Saturday and went to test drive a new vehicle I saw online. I did all the research, calculated a fair-trade amount and my ideal monthly payment. Test drove, liked the vehicle, so we let them do their song-and-dance routine. After some back and forth, they were $11 over my ideal payment. They tried and tried, but I wouldn't budge and we left. My wife bet me a romantic dinner that they would call me by the end of the following week because it was the end of the month, end of the quarter, and end of the fiscal year. Sure enough, the last day of the month, they caved, and I got the vehicle. And yes, I did take my wife for the romantic dinner too! I have to admit, it was kind of fun to see how far I could push them.
Nice. I also hold my ground with the salesman but then get worked over by the guy at the end trying to upsell everything. My God it's just so exhausting. I have yet to get a deal.
When I was 18 years old looking at a new Camaro the sales staff took my car keys and wouldn’t give them back. It was an extremely high pressure tactic to get me to buy. They even made an announcement on the intercom embarrassing me. This was 45 years ago. Nothing has really changed! The whole system is a train wreck.
Not for the dealership.
Last two times I bought a new car, I said I was payng cash, but I later saw they ran a credit check on me. Was that legal?
Doesn’t sound like it. Don’t they need your consent?
@@HolySchmidt just the fact I am buying a car? But I said I was paying up front. I don’t remember signing any consent. Course a Toyota dealers do much worse, when they get ahold of your car through the years. I didn’t even finish my Toyota care.
accept their rate (this will give you more leverage in other areas)and then refinance with your credit union the next day, just make sure there is no pre-payment penalty.
I'll get the invoice from the salesperson and base my otd price on that. I always go through my own credit union and end up with a good monthly payment and they don't realize the payment works for me then i double the amount every month and its paid off before the warranty runs out.
Very helpful and informative. Thank you sir!
I buy from Tesla using the website. No BS. Just order the car, head to the sales office and pick it up. No negotiating. The Tesla office is busy. The dealership next door has two idle sales guys standing out front deciding when to smoke their next cigarette. I can't imagine buying another car from a dealership. When I tried to order an EV pickup truck from Ford when the Lightening came out, the local dealership told me to call back in six months. Of course the reservation didn't secure the price. They were going to add on any second sticker they wanted. Dealers are garbage.
It’s like dealerships love to be hated.
Similar to the6% real estate commission, the industry needs a shake up.
One thing that helps is to not be “married” to a specific car or brand. If the sales rep realizes you are locked in on a specific car from the start, they know they have the owner over you and can ply you with expensive add-ons, since you’ll be hard-pressed to walk away after you have so much emotional investment in that car. A sales rep’s worst nightmare is a person who is all over the place on what they want to purchase.
excellent info Thank you
Excellent information. Thank you
Welcome