How do I buy a Car?
Wanted to put this website here for those that have to buy a car and have never purchased that much metal before.
https://www.consumerreports.org/consumerist/dealerships-rip-you-off-with-the-four-square-heres-how-to-beat-it/
Step 0) (from what I read on dealership forums)
End of quarter and end of year are the best times to buy a vehicle due to quarterly/yearly quotas for dealerships.
1) GET YOUR FINANCING THROUGH THE CREDIT UNION BEFORE YOU EVEN STEP ON THE LOT.
Once a car salesman knows you don’t need financing, they’re more willing to be forward with you and knows they don’t have to work on the payments with you, because it won’t help. We’ll still try to beat whatever APR you’re getting at the bank and offer you payment deals, but forget them. You’ve got it worked out, and only need to know the price – bringing us to the next point.
2) DON’T HAGGLE OVER ANYTHING BUT THE PRICE.
This seems obvious to most of the readers of The Consumerist, but most people miss this – especially if they’re getting dealer financing.
3) DO YOUR HOMEWORK.
Know what the MSRP of the car is, know what your trade is worth. (Here’s a hint: take the NADA and subtract about $2K – used cars are appraised by books that aren’t published to the public, so it’s not blue book or NADA value. It’s called “black book” value; “black books” are published weekly by companies such as Manhiem Auto Auctions (http://www.manheim.com/), and these show the going price at the auction, that week, for your car. Basically, wholesale cost.)
4) LET THEM KNOW THAT YOU KNOW WHAT THEY ARE DOING.
If you read this article, you are already ahead of 99.9% of the people walking in. They’ll cut most of the bullshit with you if they know that you’re not going to fall for it.
5) UNDERSTAND THAT YOU ARE NOT GOING TO PAY COST FOR THE CAR, AND THE AMOUNT YOU PAY OVER COST WILL BE MORE THAN YOU THINK.
continued below
Consumer Reports
Dealerships Rip You Off With The “Four-Square,” Here’s How To Beat ...
Former used car salesman Alan Slone grows a conscience and reveals one of the major strategies dealership use to screw you when buying a new car. At the heart of it all is the "4-square," a sheet of paper (sample above) divided into four boxes: your trade value, the purchase price, down payment, and monthly…
21 Replies
wise-whiteOP•9mo ago
HERE’S HOW THE FOUR-SQUARE WORKS:
The “worksheet” (or four-square, as it’s called) is the first thing a person will see when they sit down to negotiate a car’s price. This sheet is used both in used and new car sales. When the interested party sits down, they’ve already:
- driven the car, and
- have talked to the salesman about what they’re looking for.
The salesman has had the trade evaluated, if there is one, and has gotten the customers something to drink to take the edge off.
After sitting everyone down, the salesperson starts filing out the four-square. A blank one looks something like this (see picture):
wise-whiteOP•9mo ago
The salesman will only put down the make, model, VIN and customers information (not pictured). Then, the salesman will have the customer initial the part that says “I will buy today if numbers are agreeable to both parties.”
If there’s any resistance (which normally there isn’t), the salesman simply says that its to make sure that the customer really is ready to drive the car off the lot today – IF they can get the numbers right.
I never had anyone not sign the form who was actually willing to buy the car today. By doing this, you have shown your commitment to the manager in the tower (tower: back room, usually behind glass, where the salesman goes to confer with his manager.)
(A note about the tower: This is where the deal actually takes place. The salesman you are dealing with is NOT who you are negotiating with – the sales manager, who sits behind a desk (and is usually one of the scummiest people you’ll ever meet) is who’s actually going to be haggling with you. This will not happen in front of you, nor will you see what is actually happening. It’s a bit of theatre, this part.)
The salesman will then take the paper up to the tower, and when he returns, you’ll see something like this (see picture):
wise-whiteOP•9mo ago
The salesman will start, very matter-of-fact, going over the numbers with you. First, he’ll start with the value of your trade.
The value of your trade, as listed, is $3000. You, expecting at least 5k for your beater, are unhappy with the number. That’s fine, the salesman says. We’ll get to that in a moment. He then goes on, very quickly, to just state the price of the car. Salespeople are instructed to move over these parts of the sheet VERY QUICKLY, as you’ll see in a moment.
Next, he arrives at the down payment square, which is easily double what you’d hoped to put down today on the nice new Prius you now want very badly. Lastly, he arrives at the monthly payment. “That payment is outrageous! I can’t afford that!” is what you’re probably thinking. All in all, these are pretty crap numbers from what you see.
THESE NUMBERS ARE MEANT TO INSULT YOU AND PUT YOU ON THE DEFENSIVE, ESPECIALLY THE LAST TWO.The idea here is that, unless you’re really observant, to get you less concerned about the overall price of the car and what your trade is worth (we’ll go into trade manipulation in a moment), and get you to the payment plans offered at the bottom. The salesman, who knows you are steamed, will keep on acting like nothing is wrong, and hand you a pen to sign by the X. This is done for two reasons – 1)You might be the biggest, dumbest sucker we’ve had today and actually agree to these terms (happened twice the three months I did this), or 2) You look like the aggressor when you say you won’t sign. THE TURN When you decide state that those numbers don’t work for you, the salesman will ask which numbers you have a problem with. Most people will go straight to the down payment, as that’s usually the part that most people gag on, followed closely by the trade in value. The salesman will then either talk about your trade (and proceed to downplay the car as much as they can – that’s usually pretty easy), or will go directly to the down payment. Very discreetly, the salesman will fold the four square so that the only figures you see when you’re talking are the down payment and monthly payment. The salesman will then say “Well, what were you thinking about putting down today on the car?” You’ll respond something like 1500, 1000 or even less if you’re in a bind and NEED the car but are broke. The salesman will nod, and act as if he’s empathetic with your plight – those bastards up in the tower are asking too much from you! He’ll then cross out the down payment number and write in the number you’re looking for. At this point, the salesman will say something to the effect of, “Well, we may be able to get that down payment done for you. But, as I’m sure you know, the less you put down today, the more you’ll have to pay off on the car – so this payment is likely to go up. What were you looking to pay on the car for payments?” You respond, “I didn’t plan on paying that much, must less more!” The salesman will pause, hoping that his last line will sink in a bit and you’ll either acquiesce to the current number or offer something higher. If you don’t, and insist that you were only planning on paying $300 a month for the car, the salesman will say, “I don’t think I can do this, I really don’t. But, I tell you what; my manager is crazy today and hasn’t sold that many cars – he’s really under the gun from upper management to get some cars out today, and he might just do this. Tell you what – if I can get these numbers, would you buy the car right now?” You say, “Well, sure, I guess.” The salesman will say, “Okay, can you write me a check for the down payment so I can take it up there? They’re not usually willing to turn down someone if I show up with cash in hand!” (Real reason? People are really unwilling, for some reason, to ask for a check back later if negotiations start to break down.) Most people, at this point, will write the check – if the salesman is good enough with the snow job, people will honestly think that they’re getting a good deal and that they need to do everything they can to get the manager to cave and sell them the car for next to nothing. The salesman will also get you to sign the form, by the X, saying that you’re agreeing to the new numbers, not the old. He’ll then put on his “wish me luck” face, and trudge up to the tower to haggle with his boss, the mean ol’ manager. (A note about the X: There’s nothing legally binding here, BTW. You could sign your SSN, your blood type, and your name all on that line – but there’s nothing binding on either party to make that happen. It’s a precursor to the real deal with all the lovely paperwork in finance…but not the actual deal. However, the dealerships make you do this so you’ll think its official and leverage yourself into thinking you may have just bought a car.)
wise-whiteOP•9mo ago
The salesman will return, with a huge grin on his face, and something like this:
wise-whiteOP•9mo ago
He’ll say, “Wow! He really is in a tough spot! He was willing to let this go for the down payment you wanted! But, like I was saying, he couldn’t really hit the payment you were looking for because he went down so far on the down payment, and he can let it go for this. (Motions towards new payment offer.) Would this work for you?” You will sit and look at the number, and wish you weren’t buying a car today but instead on vacation. You will either agree, and we’ll enter the final turn, or you’ll go another couple of rounds with them until they either meet you somewhere in the middle, or you start to walk out.
(Note about “walking out.” This doesn’t work if your offer is, truly, unrealistic. You need to do your homework before going in – this includes finding out how long the car has been on the lot [just driving by and seeing it for a couple of weeks is good ammo], what the going rate is for those cars, and above all else, securing your financing before you get there, so you’re more worried about the ACTUAL PRICE OF THE CAR instead of these bullshit terms.)
Now, lets say you’ve got a problem with the trade price, as well as the other figures (other than price.) The salesman (and manager) will probably agree to whatever price you want for your trade, within reason. So, assume the sticking point is that you want $5,000 for your trade – that’s fine, we’ll just say it’s going to be bought for $5000. We simply move around the price of the car to $2,000 more, and you’re in the clear. You don’t notice, we don’t say anything, and you feel happy. This is the way that dealerships do the whole “push pull or drag” sales where they’ll give you $5,000 for an engine block.
So, at this point, we’ll assume that you’ve gotten everything square and you’re ready to close the deal. Sometimes, if the manager feels especially nasty (or has gone a few rounds with you via the worksheet), they’ll come out of the tower and say “Folks, I’m (Douchey McDouchebag), the sales manager here. Congratulations! You’ve just bought a car! We were able to get the payments to $310 – I know you wanted $300, but that was the best we could do. That’s close enough, right?” They’ll nod their head (another psychological trick to get you to agree), and almost every time the person says “Yea, that’s fine!” The problem is, they didn’t realize that a $10 payment bump over a 5-year loan nets an extra $1k in profit for the dealership. It’s called “the $10 (or $15, or $20) close”, and I only saw it fail when a person was really, really exasperated with us. The deal ends, and you wake up in a year realizing that, somehow, you’re $6,000 upside down on your car, while the dealership is laughing all the way to the bank.
So, those are the major pitfalls associated with the four-square; it looks really unassuming on its face, but its designed to make you pay more, and not realize what’s going on. The manager, during negotiations, will write in BIG BIG letters, will turn over the sheet if he needs room, and will write over other things in order to make it as confusing and hard to deal with as possible in attempts to wear you down and make you sign.
The saying we used to have around the lot was “It’s like the Dallas Cowboys playing a Pee-wee Football team.” The average car salesman does this dance 4 times a day – you do it once every 3-5 years. They are better, and they will get you on some level. However, by doing stuff like this, you can control how much it happens.
wise-whiteOP•9mo ago
Here’s what a finished four-square might look like:
wise-whiteOP•9mo ago
--
End of Article
I'm going to be formatting the above copied article later to make it easier to read and break down.
Yeah, most of the message in all this is that financing is where all the games are played.
other-emerald•9mo ago
Saving this
wise-whiteOP•9mo ago
lul, I don't even know why I stumbled upon this but thought you'd need it soon.
drunk-silver•9mo ago
What is a morries dealer? I hate the song and dance of buying a car. I'd rather someone play straight with me
Aw man then i probably can't use them since I'm not in the Midwest
wise-whiteOP•9mo ago
If you want to see a sales first website check out https://www.manheim.com/. I was planning on skimming through it, but stopped to appreciate how focused the site was on sales without overly blasting me with stuff.
shreyasikhar
Manheim
Manheim Homepage
Manheim has been setting the industry standard for buying and selling used vehicles for over 75 years. As the nation’s leading provider of end-to-end wholesale vehicle solutions, we help our clients, which include automotive dealerships to banks, car rental agencies and auto manufacturer, to increase their profits and efficiencies in their used ...
drunk-silver•9mo ago
What am I supposed to draw from this? It doesn't seem like I can buy a car from this site. Even if I have the information, I dislike haggling because because I'm at a disadvantage being a woman and it's just an obnoxious process. WTF are we stuck with this asinine process for cars. Just let me compare pricess and inventories like a sane industry
wise-whiteOP•9mo ago
You use this price minus $2k like the guide above suggests to get the "at cost" value of a vehicle based on recent auctions. It helps with the market research part of car shopping.
Then add 10% to 35% for sales commission and that price range is what's likely up for negotiation.
Having the numbers in hand, with financing already prepared and identifying the car you want. I bet a saleperson would just give you a thumbs up with little hassle since it's not a lot of work to just process your request and they get the commission. It's like getting a real estate agent just for the paperwork to buy a house.
Oh, they didn't say one more tip that I need to add.
End of quarter and end of year are the best times to buy a vehicle due to quarterly/yearly quotas for dealerships.
other-emerald•9mo ago
Good to know
correct-apricot•9mo ago
@Corpse thank you for this!
other-emerald•7mo ago
READING
stormy-gold•4mo ago
..... so I used to sell cars when I was 16. Nissans. Um.
1) Come in at the end of the month < end of the quarter < end of the month in february. Feb is the worst month in the year for car sales, so everyone's hungry.
2) Ask for the manager. Ask which rep needs their last unit to hit bonus. Reps are paid a flat bonus per unit moved, and if you sell X amount per month, you get a nice bonus. This means your rep is motivated to move the vehicle, fast, and for you.
3a) If it's a new car, and most importantly you know what you want (and that's key) then just say "I will pay 3% over invoice for X car. Let me test drive it and I'm out. I also want to see the invoice too." 3% over invoice pays for the detailers, pays for the tank of gas, pays for that intial inspection. It's the actual break-even for the dealer, but since you're going during a desperate time and the rep wants their bonus, you'll get it in - especially if you're not going to take up a bunch of time deciding what you want. If you're in-out-30 minutes, absolutely. I did that all the time.
3b) If it's a used car then ask for the Kelly Black Book of your State's value. Everyone looks at KBB (Kelly Blue Book) for value, but those are national averages and you bet your candy apple ass that if the average is below your state they'll use it and if it's above your state they won't. Black Book gives you your state's appraisal value for any given vehicle based on make/model/year/mileage. They won't have an invoice, and they won't give you the invoice, but a good rule of thumb is that there's about a 20-30% markup on any given car. That'll be up to you for how much you want to negotiate down.
correct-apricot•4mo ago
So is 3% + invoice always the cheapest price of buying a brand new car?
stormy-gold•4mo ago
It depends on the state and the location; if you're in a high cost-of-living area, you might be a max of 5%. But it won't be more than that, ever.
But if you're in a normal state, normal place, just walk in and say 3% over invoice with the thing I gave ya yesterday and you'll be gucci. :cooldude: especially if you're gonna be in-and-out
correct-apricot•4mo ago
And if im paying all cash it makes no difference right?
stormy-gold•4mo ago
If you're paying all cash vs showing up with a authorized loan? Doesn't matter.
They'd actually make more money from you if you went through financing