So, I’m buying a car soon. Shopping around trying to figure out what I want and how much it will cost me.
When we get to the part where we discuss prices, most of the sales staff go into prairie dog mode, jumping up and down to walk to the manager’s office over and over again. Each time they come back with some new deal, or offer or whatever.
Now, I have a hard time imaging that they’re actually getting repeated approvals from the manager to offer new deals. From a simple work flow concept, they should already know what they can and can’t offer people based on past experiences and knowledge of the dealerships policies, right?
My basic question is this: How much of this is a psychological exercise to influence the customer, and how much is actually spent making some decision with the manager? Follow up: Is this standard pretty much everywhere?
Have your max price set. If they don’t meet it, give the guy your cell phone number and tell him to call you when he’s ready to sell a car. AND LEAVE THE LOT.
They do bat around prices but there’s really not any major number crunching going on. They know what they paid for the car, how much they’re going to attempt to get for the car, and how much they’ll accept for the car all ahead of time.
So if they paid $25,000 and the sticker price says $29,000 they may come back and say “My manager said our best price $26,000.”
You tell them you were thinking more like $25,200.
He goes back to the manager who may say “see if he’ll meet us half way” and offer it for $25,600.
Then it just becomes a game of how much you want it and how much they’re willing to sell it for. You can leave at any time and they can cut off offers at anytime.
There was a reality show on centered around selling cars and a lot of the discussions with the manager centered around financing. So much a month over so many months. Plus the value of the trade-in.
So, I think there is some actual value gained in those conversations, but my perception is that is was about 70% psychology, 30% decision-making
And then there’s the example in the movie Fargo. Whenever the salesman “talked to the sales manager”, he actually just hung out in back watching TV for a couple of minutes.
The documentary Slasher has some revealing looks into the business of car dealerships. Worth checking out.
In that film, most of the time “talking to the manager” was just to make the buyer sweat. It also sets the manager up as the bad guy while the salesman can be the good guy. “I really want to help you out, but my manager says 350 a month is the best we can do.”
Even better, go to another dealer - make sure it is owned by a different company. Oddly, when I recently bought my Prius (just before the scandal erupted, alas) none of the salesmen pulled the talk to the manager trick.
The whole exercise is designed to make you feel like they are doing you a favor by selling the car to you.
Get up and walk out the first time the salesman says he has to ‘talk to the manager’. The absolute biggest mistake that a salesman can make is to let you leave without buying the car or taking it home to ‘try out’.
And no, they aren’t really talking to the manager. Just taking a smoke or coffee break. They know what to sell the car for and the more they get, the bigger their personal share.
By the time they get through with you, you are supposed to feel grateful that you were allowed to purchase the car and that you really showed them how to deal.
Secure financing before you even start to shop. Go to a bank or your credit union and get pre-approval. Because the car dealer’s approval is another way to make it seem like they are doing you a favor.
I was surprised to find recently that they still do this. I did the right thing, emailed area dealerships and asked for the best price. When I went to the dealer with the lowest price, I found out that I had been talking to the Internet Manager who was only available to meet for a minute, and had to interact with a regular sales guy. Who was pretty mobile for a big guy when I wanted to negotiate the price. I’m convinced that during one check with his manager, he was actually taking a dump. I did ask to have them throw in the trunk liner, and I think he actually had to check the supply room during that trip to the manager.
Make sure it’s clear that you’re talking about the out-the-door price, including the $710 delivery fee and any add-ons that happen to have already been installed on the car you pick.
My first job out of college was selling Mazdas, and despite my being salesman of the month most months there were many times where I really did not know the lowest price that the car could be sold for. Not all sales circumstances are the same and there are so many variables (financing, trade-ins, options, etc) .
I would hold out on going to the manager for as long as I could, but when it came down to getting very close to the final price I really did have to go to the manager for approval. I certainly could not approve a final sales price on my own.
I know that there are many games being played, but there truly are times when the salesperson has to consult with the manager regarding price.
That was more than twenty years ago, and things may have changed since then, but I doubt it.
I’d like to proudly recount how my father dealt with this. He was a master salesman himself, having built up his own multi-million dollar business from nothing with a 9th grade education. When I was about 18 we went to buy me a a car. We checked the dealership, found one I liked, in the colors I liked. The salesman asked if he could help us, my father said we were interested in buying the car. He took out a checkbook and wrote out a check for how much he was willing to pay (a fair number, my father knew how to value things from his own experience) and signed it. The salesman stammered “but I’m afraid I can’t go that low” My father said, all right, turned to me and said “come on, lets go to the next dealership” All the while letting the salesman hold the signed check. He took it back, we left and got in the car and I started to put it in gear and he said “just wait 5 minutes”. Sure enough, in 2 minutes the salesman came out the door and said he had ‘talked to his manager’ and they would take the deal. Don’t you wish my dad was helping you shop for cars?
Just bought a car last weekend, my salesman did this. I expected it going in, so I didn’t let it bother me at all. “Just do your little kabuki dance, I’ll be right here, I’ve got all night.”
I got outside financing and made sure to sell what would have been my trade-in beforehand in order to minimize the dancing (I did NOT want them to bust out that infernal four-square). The only negotiation ended up being what got rolled into the price I was willing to pay.
Alas, the GF hasn’t done this sort of thing before, and it technically is her car, so I had to defer to her from time to time. She didn’t help. I got a “good enough” deal on the car, but I’m positive I could have gotten even more out of the dealer.
My wife intellectually knows the game…but cannot play it. She is a hindrance. One time she was actually taking the salesman’s side!
However, she is wise as she knows this weakness of hers…and so when we look for cars she lets me know what she would be interested in and I do all the negotiating without her. Only when I have it acceptable/close to acceptable on 3 or so cars at different dealerships is she brought in…and she does do a good ‘bad guy’ as “the other car has this and that and I like that etc” in front of the salesman which does well in icing the last little move down
edit - bring a book when negoiating in case they play the ‘talk to the manager’ game. I can read all day
My husband is the master car negotiator. He loves it like a game of chess. I am unable to watch, and go look out the window or something. Gets to a point where they say they are on their final offer. Nope, he says, and we start toward the door. We walk three steps – always exactly three steps – before we hear footsteps behing us. No, wait, maybe there’s something else.
Also he will outlast them. It can be a half hour after normal closing time, they are down to the last $200 of difference and he’ll be equally willing to wait for them to come around or to walk out. The salesman just wants to go home, dammit, he’s been there all day. Ditto the manager. One time in this situation the dealer gave in, wrote up the order, it was signed, sealed and the car was driven off the lot. My husband got home and realized the dealership had written a ‘2’ where there was supposed to be a ‘5’ and lowered the price another $300 accidentally. He actually said, “Do you think I should go back?” And we quickly decided that if the mistake had been in the other direction there was no way they’d have corrected it.
You gotta love threads like these. Everyone either knows a master negotiater or is a master negotiater.
Just because you can “outlast” them or “walk out” doesn’t mean they’ll cave to your demands. They’re just as likely to say “Sorry, I can’t (or won’t) sell it for that price. See you later” and move on to the next customer.
And don’t hold your breath for them to call you back or chase you through the parking lot. Many dealers give a take-it-or-leave it final offer and if you leave it they really won’t care.
A great deal depends on the dealership. My husband sells cars for a living. At the places he’s worked, he’s had a varying degree of control over the price at which he can actually sell the car, and a varying degree of information about the money that the dealership actually has in the car. I don’t think he’s ever gone to watch TV instead of talking to the manager. Pretty sure he’s gone outside to cool off to keep from yelling at people, though.
Currently, car-deal maneuvers are easily as frustrating for the salespeople as they are for the customers. The supply of both new and used vehicles has dropped significantly. Demand has dropped a little (people are driving their cars longer), but not to the same degree. So demand is up, relative to supply. Accordingly, prices are much less flexible. The same techniques that people have been using for years may not work. This results in a lot of ticked off potential customers. People are expecting used car prices to be roughly the same as they were a year ago, when the dealers can’t even purchase used cars at those prices now, much less sell them at those prices.
I’ve heard a lot of people complaining about salespeople lately, and how they’re not willing to negotiate. Believe me, they want to sell cars. They’re on straight commission, and they’re hurting (my husband’s averaged income over the first three months of this year was below federal poverty guidelines for our three-person household). But the car market is going through a big adjustment, and it’s going to take a while for everything to settle down into the new normal. It’s probably not going to be just like it was. We’ll all just have to get used to it.
Not necessarily. My husband wrote up a deal after hours one night, got back the next day, and realized he’d overcharged the customer $500. He called them that morning, before they’d even realized the mistake themselves. He cannot be the only salesman in the country that’s done this. He’s a good guy, but he’s not the second coming of the Christ.
At a dealership in a small town, a great deal of business is repeat business. The salesmen want their customers to be happy so they’ll come back, and send all their cousins. Find yourself a dealer in a rural/small town area that’s been in business a long time. You’re more likely to have a good experience there, IMO.
I think both of these are true, but in any business you have someone who is held accountable for profit and loss, and it ain’t the salesmen. The MOD may have to sign off on deals. I am waiting for someone who has worked in the business to weigh in on it here.
In my case, I didn’t claim to be a master negotiator. In fact, I’m middling. But I know I’m middling, so I play to my strengths, and minimize my weaknesses. Which in practice means doing my research, coming armed with outside financing, and reducing the opportunities for getting ripped off.
I don’t think of car salesmen as bad guys. Some are pure evil, sure as anything. Others, however, are like you and me, trying to make a living. Only they work through a ritualized system that’s evolved to increase the odds of their obtaining the greatest amount of profit. Blaming a car dealer for stacking the deck in their favor is like griping at a casino that the house always wins. It’s their job to win. I don’t begrudge them that.
But honesty earns a premium from me. I’ll gladly pay a little more money if in return I’m getting a straightforward service, a “convenience fee” if you will. I won’t fight over that last $200-- it’s not worth my time, or theirs. Many-- not all, but many-- sales people in my experience will gladly take a fast and easy sale with less profit than spend hours or even days haggling in the hopes of making a huge sale.
Anyway, I will claim that I’m a better negotiator than my SO. I know that it’s a stereotype about women, perhaps unfair, but in this case, the shoe fits. When I’m walking into a dealership and she agrees with everything the salesman says, that’s a problem. When she doesn’t even know the difference between MSRP and invoice, that’s a problem. I won’t say I got the best deal for us, but I will say that had she walked in their alone, she might as well have been a mark.
I don’t know enough to be an expert, but I know more than enough to avoid being a mark.
I hate negotiating, and all the car companies do by negotiating is piss me off. I think the “here’s our price” tactic makes excellent business sense. Why alienate a customer by making him think he’s not getting the best price in the market just because he does not want to be rude and lie?
Which means, I’ll go to the guy with the lowest advertised price with the product I want. If the other guys really wanted my business, they would have advertised a lower price.
