Car prices are usually elastic. Dealerships price cars thousands of dollars above procurement price (or invoice price), and have holdback payments from the manufacturer, financing profits and profits on used car trade to count on, as well. All this gives dealerships great deal of leeway to accommodate every kind of buyer and buying climate with.
When the competition heats up, such generous margins allow dealerships to greatly lower prices while still making a profit. When you walk into a dealership, then, you don’t want to make the mistake of giving away your price point.
Researching your options and prices online before you go in, and using the right online calculators and phone apps for your location, you’re likely to learn all you need about the best prices and lending terms possible. Whether you’re in the market for a Renault Captur or Espace, you want to be tough when negotiating, but not play the tough guy. Salesmen have professional pride, and will not be walked over. You can be nice, but hang on for the price that you hope for.
Going in at the end of the month is usually a good idea. It’s when the salespeople are usually at their most anxious to fill their quotas. You’ll find them more willing to cut you a deal.
Here are other areas where mistakes are often made, and tips about what exactly you should do.
Don’t tell them how you will pay
You should especially be careful not to mention whether you’re paying cash, or looking for a loan. Since dealerships make a good deal of their margin on overpriced car loans, cash deals leave them with little margin. If you tell them going in that you’re paying cash, they will know to not lower the price past a point. You want to keep them guessing.
Go in first thing in the morning
Dealers often try a cool negotiating trick — they call it The Hunger Games. They try to drag negotiations on until well past lunchtime. They know that customers often don’t want to break off negotiations at an advanced stage, just so that they can go and eat; they want to finish up before they do that. Since they’re hungry, they will usually look for a way to quickly agree to whatever they are offered. It’s a better idea to go in at opening time.
Don’t let them put words in your mouth
Experienced salesmen have a simple and clever trick to get people to agree to a bigger payment each month — whatever number the customer mentions, the salesman will usually follow it up with a figure a little over, without skipping a beat. The aim is to make the customer feel embarrassed about backing down. You can’t allow yourself to fall for it
Watch out for the impending event trick
No matter what major purchase you set out to make, the salesman will usually tell you that if you don’t buy right then, something is likely to happen that will put the deal out of your reach. The product will likely go out of stock, there is a price rise right around the corner, a special sale will end and so on. While these impending event warnings may be real, they usually are not. All you need to do is to ask the salesman if he really expects you to believe that if you turn up tomorrow, he will not be able to sell you the car at the price. You can always try another dealership.
Don’t be guilted into making a quick decision
While they may not look it, car salesmen are masters of human psychology. You would never think that use of the word today in a simple question would make you feel so guilty for the salesman’s well-being, that you would agree to buy. In reality, it almost never fails. The salesman usually asks a direct question at some point. If he finds a way to give you the car at the monthly payment that you’re after, he may ask, would you be willing to buy today? The idea with this type of question as to make you feel bad about how hard he’s working to please you; if you have any decency , you should throw away all your other requirements, and just sign.
You simply need to know that it’s a trick, and stick to your guns.
Marco Marlia is the CEO and co-founder of MotorK, the most important lead generation company in Italy for the automotive industry. He holds a degree in Economics, Finanacial Markets and Istitutions from Bocconi University of Milan, Italy. He started his first professional experience during College working for Merrill Lynch IPCG. Later he co-founded several companies like DriveK a unique car configurator for people choosing a car across Europe. DealerK is the branch of MotorK devoted to car dealers with over 2.000 clients and it’s the only automotive business in Italy certified as a Google Premium Partner. Marco Marlia is the co-author of the following books: Oltre Wikipedia (Beyond Wikipedia) and E-learning e Piccole e Medie Imprese (E-learning and small and medium-sized enterprises).
