Auto Dealer Strategies

John Butler

Mark Luke

John Ricks

Overview

Dealer goal vs. buyer goal Enticements Negotiating tactics Scams Recommendations

Enticement What it really isAd car Teaser: cheapest car with

little or no options

0% financing (dealer) Can be a tactic to get you to pay MSRP

Pay off another loan or lease

Refinance with the dealership and pay off 2 cars at once + additional fees!

Enticements

Enticement What it really isWe match any deal Sure, if you can, by some miracle, get

the paperwork…

Low monthly payment Get you to focus on payments rather than the price of the car

No payments until… Oh, sorry, that was a misprint – we’ve requested a retraction

Rebate Read the fine print – dealer might retain– another tactic to sell at MSRP

Enticements

Dealer Negotiating Tactics

Focus on monthly payment not price Pressure to lease not buy Negotiate down from MSRP (or MSRP +

markup) Wear you down / switch salesmen or lost

keys routine

Dealer Negotiating Tactics

“This car may not be here tomorrow” Sympathy ploys Salesman gets a call from “interested” buyer Need a deposit before signing (try to

obligate you before closing the sale) No haggle pricing = No deal

Scams

Most common victim: someone with bad credit 10,000-point inspection/Dealer Prep Costs Additional Dealer Markup (ADM) Financing fell through (before or even after taking

possession) Wrong date (or other info) on paperwork Hide the Mulroney (MSRP) Sticker (this is a

felony)

Legal Obligations

Dealer– Disclose APR and total amount of interest that

will be paid– MSRP (Mulroney) Sticker can only be removed

by buyer

Buyer– In most states once you drive it off the lot it is

yours

Recommendations

Do your homework– Find out dealer acquisition cost (ie. consumer reports)

NEGOTIATE UP from this!– Research dealer rebates and manufacturer offers – don’t let the

dealer keep a rebate you’re entitled to!– Already have financing arranged (ie. loan from credit union)

Recommendations

Find a salesman through the service department Don’t take possession of the car without payment

coupon book and paperwork all done Don’t buy on first day out Review paperwork & check dates Understand every line item and what comprises

monthly payment

References

www.smartcarguide.com www.consumerreports.com www.carbuyingtips.com www.kbb.com (Kelley Blue Book) dir.yahoo.com/Recreation/Automotive/

Buyer_s_Guides

Questions?