Ive been buying and selling cars for 50 yrs and ths gentleman is spot on with every point. You have control of the deal....unless you give it up. You can leave. You can say no. Those are powerful weapons......unless you surrender to their tactics, or decide you MUST have the car. Then your're screwed. Also..... never trade in a car. That eleminates one of those circles. Sell it yourself. It's more work but almost always worth it.
Out of all the car purchasing UA-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.
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.
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.
Even if you go back to the dealership for service you're likely never going to run into the Fin Mgr again. And even if you do they likely won't remember you, anyway.
Exactly. The out the door price needs to be agreed upon before you ever set foot at a dealer. I do it through email. 22 out of 25 dealers will not give you an out the door price by email, but I only need one. I usually get about 3 OTD prices from about 25 emails, and I go with the least expensive.
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.
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.
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.
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'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 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. 🤣
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 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.
Excellent presentation and I should have said that are the beginning. One day, I spoke with a young man in his early '30s. He ran three different sales locations for a gentleman who had 10 dealerships. When he went to work as a commissioned salesman, he noticed that it was the sales manager who made the most deals and he dealt only with the local businessmen. He decided to mimic the sales manager and dealt with businessmen. When you go onto a car lot, unprepared, and make a beeline for the salesman with no authority, you are a big mark. Treat buying a car like a businessman. This gentleman tells you how to do it.
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.
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.
This is very good advice. My father explained it to me very well decades ago. I can still hear him to this day. “ You need to go in with the understanding that they are a business and that business in business to make money. You go buy a car or you walk into a bank understand that they are going to make money off of you one way or another. They are not charities and if they are not going to make money off you they will simply send you walking elsewhere. Now that dose not mean allowing yourself to get ripped off or allowing them to manhandle you into an agreement that is not feasible for your needs”. I see it in my day to when I hear co workers getting into 8 year loans for 896 dollars a month. That in my mind is off the charts. If you can afford it fine but most people I know can’t and end living paycheck to paycheck.
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!
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!
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.
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.
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.
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 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.
I bargained union contacts for many years and simply enjoy the process of bargainning! I'm always looking to improve my skills and techniques! I have to say this is a fantastic video -- job well done!
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.
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.
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?"
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
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.
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?
A local dealer in the 80s used to state in his TV ad that he checks every competitor's daily, so he can sell his cars at the lowest possible price. I remember thinking each time I saw that ad, "No, he's checking all his competitors to find the highest price he can sell his cars for." I remember you had to take three steps down to enter the sales office. One social and two moral.
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.
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.
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
If you are really into this car buying process and have time, tell the dealer you don't like any of the cars on the lot, but would like to order one. Tell the dealer that you are savings them "floor plan" cost, the interest they pay for their inventory. Offer invoice minus half of the "holdback" which is 1-3% of MSRP depending on the manufacturer and model. When they squirm, tell them let's make this fast and easy and we both win. If the car you want is rare this won't work, but for a model that is near the end of it's cycle life, they will jump on it. The dealer will still make a thousand and not $5-7 thousand. If you can pay cash, all the better. If not get pre-approved. Avoid all other BS. Be prepared to walk and say, "call me when you are ready to accept my offer." Works for me.
I never trade a car if it can be avoided ,and if buying a toyota dont take the extended warranty. Add to that pay cash or come with own financing and you are really in good shape,l at least down to one battle. Dealerships don't love me :)
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 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!
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.
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 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.
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.
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.
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.
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.
Keep in mind your when keeping the dealership economy running when you purchase and service your dealership. The dealer principals floridas house n yacht don’t pay for themselves guys
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.
To get a good deal on a new car, you need to have the out the door price agreed upon before you ever walk into the dealer, and also agreed upon before you ever give them your phone number. You need to have all the dealers in your area compete against one another.
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?”
This used to be called a 4-square. If you go in to a dealer unprepared, you won't understand what discounts are available, you won't understand the value of your trade-in, and you'll be at the mercy of a dealer. If you're a payment person ("I can only afford $500 a month") then you're essentially a rube with no anchor point to determine what you're actually being charged. Consider getting someone else to handle it for you. Consider selling your trade-in yourself on Craig's list. I generally sell my cars myself and I get 4-5x what the dealer offered. Best way to buy a car: Figure out what car you want. Then call the sales manager of every car dealer in the area of that brand and ask him for an out-the-door price for the car. Tell them you're calling every dealer in the area but if he gives you a good price you'll be by tomorrow to pick up the car.
On a new car theres different prices a price for people that worked for like ford. A price for msrp. Never pay that. Look up rebates first. Dont leave any on the table. Theres a hold back amount that goes directly to the dealer owner. Examples are truck at 70k might be 7k to him on a sale. And then invoice price thats where you want to be minus the rebates. Save money dont get upside down on the amount when i sold i helped everyone i even got the fees dropped off thats why i was salesman of the year for every year that i sold cars even president of ford sent me an excellent award and i had people who i sold to came back to me 3 years after i quit and went back to surgery cause i needed the medical insurance. Good luck to all
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.
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. 😂😂😂😂
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.
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.
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.
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.
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.
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.
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.
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.
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.
The last new car I will probably ever buy was also the easiest car purchase ever. In 2017 I read on the Internet that my car brand was having crazy incentives. So I called the salesman who sold us my wife's car. He says we just got out of a meeting where they informed him about the incentives and they have a dozen. I said do you have a blue one with a manual? He says yes. I say that one is mine. So the next day I went and got it. The deal included 0% interest so I financed the entire purchase for 6 years. I'm a three year loan kind of guy and wanted to pay it off early, but that doesn't make economic sense with 0%. The car also was $5k off (20%) and included an 11 year 162k mile manufacturer's warranty (not aftermarket). It averages 55 mpg at 75 mph.
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.
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 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.
I bought a car once and the finance manager printed out the final agreement for me to sign and he had changed the interest rate, higher, and the length of the loan. If I had not just read advice on Reddit saying to read the final contract I would have signed that. He said oh yeah I made a mistake. Also when looking at the Subaru I asked the sales person if the head gasket had been replaced because all Subarus had defective head gaskets at that time. He said he didn't know. I said so if it's leaking oil in a few days you'll fix it? He said oh yes, we take care of our customers. Sure enough two days later the head gasket is leaking. I take the car back, salesman and manager say, too bad, you bought it as is. I wrote a scathing review on a dealers website and the manager called me and said if I delete the review he'll fix it at their expense. They did fix it. I think i had an ulcer by the time all that was settled. They saw me coming, a woman who knows little about cars. But I know a little more now.
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.
Holy, I come in with my game plan.Start at invoice and options at dealer cost. I tell and show sales guy the invoice, he says no I'm heading to the door. The price to me is what the dealer payed from the OEM. I'm not trying to get the hold back cut (cut my profit) I'm going to pay. I offer $500 extra then I ask what he wants to high I say no good bye under a $1,000 Buy the car. If I really want the car $1500 above invoice is my limit.
I ordered two subaru outbacks directly from Subaru, one for me and one for my wife. They shipped both to the local dealership. Fastest and easiest way to buy a new car. Especially in Alaska where cars are marked way up!
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.
There is one component of buying a car from a dealer that I have never heard discussed or brought up in any video on this subject, maybe because it's not a "numbers" thing. That is: Human nature is one that typically doesn't like conflict. Negotiation is a mild form of conflict. We get stressed out because we anticipate a conflict therefore we just want things to go smooth so we are more likely to "give in". I know I'm guilty of this especially if I have a personable salesperson.
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 negotiated the out the door price online then the trade in value. I didn’t tell the salesman how I plan to pay for it. However I plan to pay cash. What surprises am I in for?
Interesting. I believe I have control of three of the four: Trade in, Financing, and Protection Plans. Or at least I think I do!?!? So does that mean that if I don't tell them if I have a trade-in or want to finance until *after* we settle on a price, will they actually accept a decent price for their car?
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.
Buying a car at a dealership these days is more stressful than buying a new house. This video is very helpful in reducing that stress
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!
Ive been buying and selling cars for 50 yrs and ths gentleman is spot on with every point. You have control of the deal....unless you give it up. You can leave. You can say no. Those are powerful weapons......unless you surrender to their tactics, or decide you MUST have the car. Then your're screwed. Also..... never trade in a car. That eleminates one of those circles. Sell it yourself. It's more work but almost always worth it.
Out of all the car purchasing UA-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.
It sure beats those
2 bozos on CarSLUDGE.
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.
Extended warranties can only be issued thru the car manufacturer
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!
Even if you go back to the dealership for service you're likely never going to run into the Fin Mgr again. And even if you do they likely won't remember you, anyway.
Exactly. The out the door price needs to be agreed upon before you ever set foot at a dealer. I do it through email. 22 out of 25 dealers will not give you an out the door price by email, but I only need one. I usually get about 3 OTD prices from about 25 emails, and I go with the least expensive.
@@georgefeldman4408 Then who should I buy a car from? My friend suggested carguru. What do you suggest?
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.
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.
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
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 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 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
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 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
Excellent presentation and I should have said that are the beginning.
One day, I spoke with a young man in his early '30s. He ran three different sales locations for a gentleman who had 10 dealerships. When he went to work as a commissioned salesman, he noticed that it was the sales manager who made the most deals and he dealt only with the local businessmen. He decided to mimic the sales manager and dealt with businessmen.
When you go onto a car lot, unprepared, and make a beeline for the salesman with no authority, you are a big mark. Treat buying a car like a businessman. This gentleman tells you how to do it.
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.
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.
This is very good advice. My father explained it to me very well decades ago. I can still hear him to this day.
“ You need to go in with the understanding that they are a business and that business in business to make money. You go buy a car or you walk into a bank understand that they are going to make money off of you one way or another. They are not charities and if they are not going to make money off you they will simply send you walking elsewhere. Now that dose not mean allowing yourself to get ripped off or allowing them to manhandle you into an agreement that is not feasible for your needs”.
I see it in my day to when I hear co workers getting into 8 year loans for 896 dollars a month. That in my mind is off the charts. If you can afford it fine but most people I know can’t and end living paycheck to paycheck.
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!
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.
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.
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..... ))))
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.
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 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.
A good reminder, good video, thank you for being a voice of reason in an unreasonable world!
I try!
I bargained union contacts for many years and simply enjoy the process of bargainning! I'm always looking to improve my skills and techniques!
I have to say this is a fantastic video -- job well done!
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.
This was an Excellent Overview of what to do when buying a car ‼️
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
Well structured presentation as always!
Thanks LB!
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?"
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
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.
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!!!
A local dealer in the 80s used to state in his TV ad that he checks every competitor's daily, so he can sell his cars at the lowest possible price. I remember thinking each time I saw that ad, "No, he's checking all his competitors to find the highest price he can sell his cars for." I remember you had to take three steps down to enter the sales office. One social and two moral.
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.
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.
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
If you are really into this car buying process and have time, tell the dealer you don't like any of the cars on the lot, but would like to order one. Tell the dealer that you are savings them "floor plan" cost, the interest they pay for their inventory. Offer invoice minus half of the "holdback" which is 1-3% of MSRP depending on the manufacturer and model. When they squirm, tell them let's make this fast and easy and we both win. If the car you want is rare this won't work, but for a model that is near the end of it's cycle life, they will jump on it. The dealer will still make a thousand and not $5-7 thousand. If you can pay cash, all the better. If not get pre-approved. Avoid all other BS. Be prepared to walk and say, "call me when you are ready to accept my offer." Works for me.
I never trade a car if it can be avoided ,and if buying a toyota dont take the extended warranty. Add to that pay cash or come with own financing and you are really in good shape,l at least down to one battle.
Dealerships don't love me :)
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
Omgeeee!!! Can you please come car shopping with my husband and I? We are just so bad at this game.😂😂😂
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!
You hit this one out of the park
Thanks Wild!
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.
Great information. Thank you for sharing your knowledge and experience. Good bless you.
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.
Monthly quotas folks.
Yes, purchase your vehicle at the end of month!!!!!
Even better, end of the quarter....yet even better, at Christmastime at the end of the quarter when everyone else is tired of shopping for anything.
You got the idea!
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 😂
very interesting, and a subject I am interested in at this very moment. thank you for all the work and sharing.
Last lease was zero down 200/mo civic. Good deal. 200 was with all taxes fees. No orig fee. Zip
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?
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.
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.
❤ Been there several times, I always enjoy 👍😎✊
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.
Keep in mind your when keeping the dealership economy running when you purchase and service your dealership. The dealer principals floridas house n yacht don’t pay for themselves guys
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
This is great ...very direct
To get a good deal on a new car, you need to have the out the door price agreed upon before you ever walk into the dealer, and also agreed upon before you ever give them your phone number. You need to have all the dealers in your area compete against one another.
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?”
Solid advice and excellent explanations. I will be able to make good use of this.
This used to be called a 4-square.
If you go in to a dealer unprepared, you won't understand what discounts are available, you won't understand the value of your trade-in, and you'll be at the mercy of a dealer. If you're a payment person ("I can only afford $500 a month") then you're essentially a rube with no anchor point to determine what you're actually being charged. Consider getting someone else to handle it for you. Consider selling your trade-in yourself on Craig's list. I generally sell my cars myself and I get 4-5x what the dealer offered.
Best way to buy a car: Figure out what car you want. Then call the sales manager of every car dealer in the area of that brand and ask him for an out-the-door price for the car. Tell them you're calling every dealer in the area but if he gives you a good price you'll be by tomorrow to pick up the car.
On a new car theres different prices a price for people that worked for like ford. A price for msrp. Never pay that. Look up rebates first. Dont leave any on the table. Theres a hold back amount that goes directly to the dealer owner. Examples are truck at 70k might be 7k to him on a sale. And then invoice price thats where you want to be minus the rebates. Save money dont get upside down on the amount when i sold i helped everyone i even got the fees dropped off thats why i was salesman of the year for every year that i sold cars even president of ford sent me an excellent award and i had people who i sold to came back to me 3 years after i quit and went back to surgery cause i needed the medical insurance. Good luck to all
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
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. 😂😂😂😂
Very helpful and informative. Thank you sir!
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.
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.
Informative video. Nevertheless I choose to keep my vow of never stepping into another car dealership again.
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.
Good to know. Are car buying services worth it ?
I suppose it depends. I might research it!
Four squares on a sheet of paper was used for decades. Havent seen this form, but it worked the same.
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.
Excellent video! Thanks
You bet
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.
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.
I highly recommend reading What Car Dealers Don't Want You to Know by Mark Eskeldson. Lots of good info like 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.
Quick Question: How do you negotiate the value of your vehicle? Is there a Holy Grail Car Value Tool that you use?
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.
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.
The last new car I will probably ever buy was also the easiest car purchase ever. In 2017 I read on the Internet that my car brand was having crazy incentives. So I called the salesman who sold us my wife's car. He says we just got out of a meeting where they informed him about the incentives and they have a dozen. I said do you have a blue one with a manual? He says yes. I say that one is mine. So the next day I went and got it. The deal included 0% interest so I financed the entire purchase for 6 years. I'm a three year loan kind of guy and wanted to pay it off early, but that doesn't make economic sense with 0%. The car also was $5k off (20%) and included an 11 year 162k mile manufacturer's warranty (not aftermarket). It averages 55 mpg at 75 mph.
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.
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 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.
I bought a car once and the finance manager printed out the final agreement for me to sign and he had changed the interest rate, higher, and the length of the loan. If I had not just read advice on Reddit saying to read the final contract I would have signed that. He said oh yeah I made a mistake. Also when looking at the Subaru I asked the sales person if the head gasket had been replaced because all Subarus had defective head gaskets at that time. He said he didn't know. I said so if it's leaking oil in a few days you'll fix it? He said oh yes, we take care of our customers. Sure enough two days later the head gasket is leaking. I take the car back, salesman and manager say, too bad, you bought it as is. I wrote a scathing review on a dealers website and the manager called me and said if I delete the review he'll fix it at their expense. They did fix it. I think i had an ulcer by the time all that was settled. They saw me coming, a woman who knows little about cars. But I know a little more now.
@@Arete37 Wow, they are all scumbags. Well done with the scathing review.
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.
Holy, I come in with my game plan.Start at invoice and options at dealer cost. I tell and show sales guy the invoice, he says no I'm heading to the
door. The price to me is what the dealer payed from the OEM. I'm not trying to get the hold back cut (cut my profit) I'm going to pay. I offer $500
extra then I ask what he wants to high I say no good bye under a $1,000 Buy the car. If I really want the car $1500 above invoice is my limit.
I ordered two subaru outbacks directly from Subaru, one for me and one for my wife. They shipped both to the local dealership. Fastest and easiest way to buy a new car. Especially in Alaska where cars are marked way up!
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.
It’s like dealerships love to be hated.
Similar to the6% real estate commission, the industry needs a shake up.
I’ve heard of this pre approval from your bank thing before. In almost all cases the dealer can give you a better rate by several points.
There is one component of buying a car from a dealer that I have never heard discussed or brought up in any video on this subject, maybe because it's not a "numbers" thing.
That is: Human nature is one that typically doesn't like conflict. Negotiation is a mild form of conflict. We get stressed out because we anticipate a conflict therefore we just want things to go smooth so we are more likely to "give in". I know I'm guilty of this especially if I have a personable salesperson.
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 negotiated the out the door price online then the trade in value. I didn’t tell the salesman how I plan to pay for it. However I plan to pay cash. What surprises am I in for?
Interesting. I believe I have control of three of the four: Trade in, Financing, and Protection Plans. Or at least I think I do!?!?
So does that mean that if I don't tell them if I have a trade-in or want to finance until *after* we settle on a price, will they actually accept a decent price for their car?
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!
Thank you, Jeff.