Most of us fall into this category about 85% of all car buyers have to finance it. The dealers know this.
There are many different kinds of payment games they can play. I will enlighten you to some of the most common ones. Never
tell the salesperson what you are paying now or have paid in the past or where you would like to be in payments now. keep
this rule of thumb in mind when selecting your vehicle. For every 10,000 that you finance you will be about 200.00 per month
in payments. Give or take a little this is a good guide to use. This also depends on you having a pretty decent credit score.
most of the larger banks will cut this off at a score of at least 650 on your score. Free credit report.com If your score is over 700 you can usually get the best rate available to the dealer or manufacture if they have special rates.
Now depending on several other factors if your score is between 650 and 700 then you to can be approved for a special rate.
All the manufactures have different programs. Be aware of what they are. You can usually do this by going to the manufactures
web site. a good salesperson will also know these programs as well.
The four square deal
A. the first type of deal I want to talk about is the 4 square work sheet. If the sales person is using a work
sheet divided into 4 different areas this is what I am talking about. They will be labeled M.S.R.P, Cash down, Trade and Payment.
Watch out for this one, it pretty confusing to the customer and is designed for the dealer to make the maximum amount of profit.
I have been told that in the state of Cal. is real big on this type of negotiating. But I have used it in other states before
myself.As a salesperson I loved this one because I would generally make a bigger commission on these type of deals. It is
set up so that you don't concentrate on the selling price of the car, but you stayed focused on the payment or the trade or
the cash down. Once again depending on the type of buyer you are. The best way to counter this one is work on one square at
a time. For example in the selling price box make an offer once again make it 25% below M.S.R.P. In the cash down box put
nothing they don't need to know yet if you are putting any cash down. That has no bearing on the selling price. The trade
box will have a very low offer for your trade. Do some home work on your trade-in before you negotiate a deal. See the page
marked trade-in for more info on that. The payment box will be figured on a high interest rate if no special rates are available.
Even then they will make it a higher rate than it should be. we call this LEG. Which means you agreed to a payment with out
knowing the rate so if you have good credit it will leave some LEG room for the business manager to sell you product in the
finance office. I'll talk more about that on the page marked finance options. To over come this box tell your salesperson
you are already approved for a 5.99 or 6.99 rate and will be financing it yourself. again this has no bearing on the selling
price and thats all we want to do right now is find out how much they are going to sell the car for. The payments will be
what they are. If you decided to work with the payments find out what rate they are using and how many months is it figured
on. If you can absolutely keep your term 60 months or less you will be doing yourself a great service. They now have 72 and
84 month terms available and these ate terms you want avoid if at all possible. Some people need this longer term to keep
their payments down. I would strongly urge you to find a less expensive car and finance it for 60 or less months than go 72
or 84. I will cover more on this on the trade-in page. The real secret to negotiating is to get them to deal in a way that
makes you comfortable and a way you understand everything that is going on. again do not sign or in tail or give any good
faith money to your sales person.
The conventional work sheet
B. The second and most common work sheet is just like an order forum. It will have a place for your name, address,tel.
Ect. Once again if you are ready to buy this vehicle it is ok to give them your info but not your SSS#. They do not need it
at this point we are merely trying to get the best price. Once again they will probably want you to give them an offer. So
use the rule I said early 25% under M.S.R.P less any rebates. When the sales person returns there will be a counter offer
from the manager and it will more than likely be in marker like a sharpie. It is going to be higher then offer I am sure.
Repeat this step one or two times and then just ask to see the invoice too the vehicle. Look the invoice over very carefully
there are going to be a lot of numbers on this. You are looking for what the dealer paid for the vehicle. That is the number
you want to work with. If they don't want to show you the invoice then get up and start walking out. I'll bet anything they
won't let you go. If they do then you really don't want to buy there anyway. they are only after a quick profit and don't
care about the service after the sale. also keep in mind we haven't said anything about the trade yet either. We will save
that until we are comforable with the selling price of the car. Once again see the page marked trade-in for all the details
about this part of the negotiation.
