This weekend my wife and I went shopping to replace our beloved minivan. Negotiating car prices is a fascinating experience. I'm not good at negotiating because I've never taken acting classes. I find it hard to get into character. When the salesman asked me how much I wanted to spend on our chosen vehicle, I only had one response ready: "I'd like to spend zero, you boiled turd. Just give it to me. Or did I misunderstand the question?"

Okay, I didn't say that. But I did laugh at him in a mocking sort of way. Obviously the question is designed to determine how dumb the customer is. You pass the test by not taking out a copy of your bank statement and saying, "I can't read. Can you tell me how much money I have?" The sales guy bowed out of the negotiations and introduced us to the General Manager. The GM went into his ridiculous spiel about how he was willing to sell this vehicle for less than he paid because he wants the manufacturer to give him a higher quota of that model next month. Apparently his business plan involves having a greater inventory of cars that no one is willing to buy for more than his costs. The general manager looked me in the eye to see if I believed his absurd lie. My wife and I just glanced at each other with mock disappointment. The game was on.

It was time to get into character. I played the part of the husband who insists on doing endless research, thus providing the dealership with no hope of closing the sale today. I said, "I want to spend some time doing research and then I can give you an offer. Maybe I can get that done by tomorrow."

Sales people hate two things: Informed customers and postponement. This was the worst case scenario for the dealership, and my ploy was designed to make the general manager "negotiate with himself," as the saying goes. In other words, we wanted him to keep offering lower prices before we made our first offer. That brings down the ceiling price and prevents us from accidentally offering more than he would have asked for.

Then the general manager goes into his canned routine about some sort of dealer incentive or other ambiguous pot of money that he could reluctantly dip into, thus offering an even lower price. He said that if we accepted this offer his children would have to wear clothes made of plastic grocery bags or some damned thing. I wasn't paying attention to the details.

We acted unhappy and asked for his business card. "We'll do some research and get back to you," we said.

Later that evening, an hour before the dealership closed, Shelly sent a text to the general manager offering a glimmer of hope. Shelly took on the part of the "good cop." Her character wanted the car but she needed a way to convince her stubborn husband to stop researching. She told the general manager by text that she needed another $1,000 off the price he offered to make that happen. He offered half of that. We accepted.

Before we made our offer I did my research only to discover that there was no way to figure out a fair price for this particular vehicle. There are plenty of sites that seem to offer that sort of information, but not credibly, and usually not for this model. I assume the car-buying sites are in the pockets of the car dealers or have their own scams going. In the end, we were flying blind and probably got screwed on the price. But that leads me to my favorite part of the negotiating process. No, we weren't done yet. Once you have an agreed price, the dealer keeps negotiating, but more cleverly this time.

The next step in the negotiations - if you can call it that - involves a fill-in sales guy making a "mistake" that lists the price on our paperwork far higher than what we agreed. By the time you get to this stage of the process, you're worn out from looking at all of the numbers, and you're tempted to sign whatever they slide in front of you. But I've been through this process enough times to know that the first version is always the "mistake" paperwork. I asked to see what price he had on his forms before he went too far, showed it to my wife, and explained to her the "mistake" price ploy. The sales guy apologized for the "mistake" and corrected it.

The sales guy introduced us to the finance guy for the rest of the paperwork. This is the final phase of our negotiations. The finance guy goes into his transparently phony act of amazement that we convinced the general manager to give us such a good price. He acts as if the price is so low it might be a mistake, or some kind of once-every-hundred-years situation. This is total bullshit, of course, and every finance guy at every dealership says the same thing to every buyer. But it still feels good, which makes me feel dirty.

The finance guy goes into his sales pitch about how we need some sort of invisible coating of magic protection for the exterior of the car. Without that protection a midsized bird can shit right through the hood and halfway through the engine block. We also need some invisible chemicals to protect the interior of the car because otherwise we are just wasting our money. Oh, and we need a more comprehensive warranty to cover all of the many, many things that will be breaking on this car. Apparently we had negotiated a terrific price on a car that was highly vulnerable to the elements. I kept craning my neck to see if it had dissolved into the parking lot behind me. All of the invisible and magical products he offered totaled several thousand dollars.

I declined all offers, but the finance guy wasn't done. He poured water on a sample of floor upholstery that had allegedly been coated with magic protectant. The water beaded and rolled like a marble. It was cool. But I turned it down.

As I assess our performance in this process, I want to believe we got a good price and that we cleverly declined offers for useless add-ons. The reality is that we are amateurs and we were dealing with professionals. The rational part of me knows that somewhere there are customers getting better prices on this same vehicle, which causes me to hate both the car and the dealership. And thanks to the finance guy, I have to worry that my car has no magic protection. I've afraid to exhale in its general direction.

Today we will take the car back to the dealer to find out why it is leaking so badly. It might be water from the AC, but it's a non-stop stream. I just hope we don't run into the finance guy at the dealership. I don't want to hear how the magic protection would have stopped this leak.
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Sep 14, 2012
An awesome thing an awesome man said to a salesperson - "I've heard the sales people at this dealership are amazing at what they do. I'd like to see you sell this price to your manager."

I swear the guy was blank for a couple of seconds then said "He'll laugh at my face."

"I see, so I was right. I'll try another dealership."

"Hang on, let me see what I can do."

Be firm, but polite. Remember YOU have something THEY want - money. Don't ever forget that when buying a car.
Also, salespeople are very cunning, they can estimate how much you make based on your clothes, shoes, watches, sunglasses etc...
+1 Rank Up Rank Down
Aug 27, 2012
I love it, I love it, I love it.

"The reality is that we are amateurs and we were dealing with professionals"

So true. That is the reason why I bought my last two used cars from amateurs (directly from the owner). Sure, there is no warranty, but have you have ever tried to cash in on the warranty of a used car at the dealer?
Aug 24, 2012
Is there a guy everyone hates more than the used car sales guy? Do you think the used car sales guy know this?
-1 Rank Up Rank Down
Aug 23, 2012
Scott, you said that all of the dealers are networked now and won't bid against each other. If you can prove that, it smells like price fixing! But that doesn't make sense to me since the dealers are independently owned.

It wasn't the case five years ago -- I called 15 dealers and asked what the bottom, all included price on the exact model I wanted was, then chose the lowest and asked them to put it in writing. Several of them wouldnt even give me a price, which is hilarious, so i hung up on them. There was $4000 difference between highest and lowest. I went and signed the papers and picked it up -- easiest car dealing experience I've ever had.

[Was the lowest price also coincidentally the first place you called that actually gave you a price? If it was, that's what price fixing looks like. Everyone after the first call gave you no price or an intentionally high one. I also assume that the lowest telephone price is always $1,000 higher than the lowest in-store price. -- Scott]
-2 Rank Up Rank Down
Aug 22, 2012
Scott, that is exactly how my car experience goes and my wife and I learned a few important lessons:
1) Never accept the first offer or make a deal on the first day
2) Never trade in a car unless you are simply looking to get rid of it for free
3) Always explain to finance guy that the deal the manager/sales guy quoted is all you are going to pay, no more, no less (taxes and tags notwithstanding)
4) Always pack a food and drinks when going to negotiations, the longer the negotiations take, the better deal you will get.

If you had followed those rules, I bet you would have gotten the full $1000 off the price. On a side note, I recently bought a VW Routan (fully loaded) and actually loved the experience (following the steps I outlined above) and the dealer was very eager to deal. They offered $8000 off the top of the sticker price and we spent a couple days and shopped at Toyota and Honda dealers and found that this was indeed a big discount over a comparable minivan. Next we haggled over my 12 year old, beat-up SUV and I was able to get $2500 for trade in. I argued that since VW was the worst rated minivan on the market compared to Toyota and Honda, I would not expect to see any trade-in value so for the minivan so they needed to up the trade-in on my SUV. They agreed. We financed through VW at 4% but when we contacted our insurance guy he offered to take over the loan for under 3%. All in all, we made out like bandits on the new VW minivan and love the vehicle.
Aug 22, 2012
It does seem like quite a deal of haggling. I went in to a dealership recently to see what my options were, mainly to show my Fiance' what I already believed my options were. They were as I expected, and as the sales guys upped the pressure and started offering deals I knew were just ploys to keep me from leaving, I left.
-1 Rank Up Rank Down
Aug 22, 2012
[So there is an acceptable price for magic coating? -- Scott]

Not really, but you can get it applied later for half the price by somebody who's had a bit of practice applying it and knows how to do it. The dealership will most likely get their lowest level intern to do it as quickly as he possibly can.
Aug 22, 2012
A couple of comments have mentioned going to the BBB. That's pointless. The goal of the BBB is to justify the business' bad actions. After all, it is an organization of the local businesses. Who do you think it is going to side with?

The two ways that are much better for getting a problem with a business corrected are your local or state consumer protection agency, and the "action line" of a local newspaper or TV station. They cannot always get the resolution that you want, but you have a much better chance with them than with the BBB.
Aug 21, 2012
"One of the ways to avoid the "mistaken paperwork" ploy (which is unethical - if this happens to you, you have every right to walk out of the dealership and report them to the BBB) is to always negotiate for an out-the-door, all-inclusive price. They hate to do this, because they can't fudge any of the numbers - the number at the bottom is all that matters. "

Not entirely. I did this once, the salesman wrote out the exact number, and we signed below it. Later, when I returned to pay and pick up the car, there was the same number -- only with three other numbers listed below it on lines that were previously blank. Yes, that's right, the salesman had changed (actually added) data ABOVE MY SIGNATURE.

I was too young at the time to realize I should have reported them to the BBB. But I didn't buy the car.
-2 Rank Up Rank Down
Aug 21, 2012
No haggle dealership!
If you haggle, either you are the sucker, or the guy who gets a discount off the bad luck of suckers. If you are a sucker, go to a no haggle dealership, and you will save about a grand. If not, you will save up to a grand, but only until all the suckers move on, at which point the lack of volume will make the haggle dealerships lose so much money they will have to charge you more.
+2 Rank Up Rank Down
Aug 21, 2012
I'm going through the process of buying a used car right now and have made two interesting observations:

First, the price shown on the window (if they even bother showing one - worse yet when they make you ask on every car) is at least 20% higher than the price quoted on the same dealer's website - which is still somewhat negotiable. Apparently the web is very competitive, but there are still some people that walk in uninformed and pay far more. I must admit, I would not have guessed that there was this much markup, so without the web, I would have probably overpaid.

The second point is regarding the waiting time. Since I'm looking for something specific (in a stick shift) I've only once gotten so far as to "sit down." Thus began the process of making me wait while the salesman saw the manager, etc. He seemed noticeably disappointed that 1) I didn't want to finance it (no shenanigans to perform there) and 2) instead of sitting impatiently, I used the restroom, got a soda, surfed the internet on my phone, etc. It became clear that he wanted me to wait for the sake of waiting, and my busy-ness was circumventing that. Next time I'll bring a magazine just to show I'm not getting bored/desperate.

Ah, the games we play. As someone earlier pointed out, thank goodness in this country we only do this for cars, and not for EVERYthing we buy.
Aug 21, 2012
Last time I bought a new car:
Finance guy: You really should buy this 5 year drivetrain warranty
Me: Wait, you mean you don't have confidence that this car will last 5 years without major surgery? Maybe I'd better talk to the other dealer
Finance guy: Did I say 5 year drivetrain warranty? I meant, for 5 years I've been a wallaby. Now where were we?
+2 Rank Up Rank Down
Aug 21, 2012
@Phantom II. I contacted the BBB over my "mistaken paperwork" scenario. You know what they told me? I remember it quite clearly. They said, I should consider the possibility that the dealer was being truthful when they claimed they made a mistake. And since they contacted me within 24 hours of the transaction the burden of proof was on me to show they were not telling the truth. People do make mistakes, after all. So I called the vehicle manufacturer's corporate office and naturally got nowhere. So, short of having a recorder in my pocket at the time of the purchase there's absolutely nothing the BBB could, or would, do for me. I still filed a claim online which of, course, went nowhere. The only thing that mattered was scaring them into believeing they were dealing with a lunatic. When my attorney friend called they said they'd already decided they weren't going to deal with me anymore and that they'd let the situation go which they did, but it was one hulluva fight.
Aug 21, 2012
Your experience reminds me of my much-less-competent negotiations for a car in January. I'm sure I got screwed. There was a hilarious and very informative movie about this process a little over 10 years ago called Suckers (http://www.imdb.com/title/tt0199054/). I highly recommend it. It's available on DVD via Netflix and Amazon.
+8 Rank Up Rank Down
Aug 21, 2012
So far I never had the need to own a car.
- I pay a flat rate for public transport where I live
- I can phone for a taxi and have a (usually new) Mercedes plus driver at my front door within 5min any time of the day and
- Vacation means air travel or train.

But I own a bicycle, if I feel in need for some activity.

Greetings from Augsburg, Germany.
Aug 21, 2012
The most fun I had a dealership was when I brought a TI-85 graphing calculator and started punching numbers into it any time the car salesman started talking and then starting every sentence with "well actually". I'll never forget how flustered it made the guy. In the end I walked out and bought a car from the dealership across the street.
Aug 21, 2012
I work in insurance and we work with dealers all the time. We end up trying to help a lot of widows who have been in accidents and had their car totaled by the insurance company. They now have a check and no car. Talk about a chance for a car saleman to get rich.
However, years ago we found a family owned dealership that would take these ladies in hand and buy them a good reliable car at a fair price.
They had such a good reputaion and prospered selling cars for two decades. It tuns out though that while they were giving customers such great deals they were ripping off the banks with a big check kiting scheme. They stole millions of dollars and a couple months ago the feds showed up and shut them down.
I can't feel too bad for the banks being that they are banks. It would seems to me that they should be able to detect check kiting by now. But I do feel bad for all the people that they would have helped had they not been caught.
If you want to know how I know which dealers give good deals it's because we see the invoice for every car bought by our customers. Some dealers amaze me at how they rip people off over and over again and yet people keep buying from them.
I will say this though, car salemen don't rip people off as much as you seem to feel, Scott. It is very competitive out there. It looks to me that they make most of their money in the body and repair shop. I've talked to the guys who work in them and they make money for every thing wrong they can find with your car and talk you into getting fixed. They get paid commission. It almost seems illegal to pay repairmen that way.
The people who get ripped off are the ones who show up at the dealer without an idea of what they want to buy. Easy marks.
I had a friend who went to the dealship and told the salemen that all she wanted was a red sports car with lots of cup holders. She never talked price. That was in 1990. She was upside down on that car and everyone she traded into for the next 14 years.
Aug 21, 2012
I only buy new, and I've never had a problem. I research the car I want, thru Edmunds, kbb, etc. and find the "invoice" price that the dealer pays. Dealers also get a "hold back" of 2-4% from the manufacturer. So basically, whatever you pay over invoice is what the salesman earns, and the hold back is what the dealership earns on the sale.

I go to my bank and get a check for the amount I'm going to pay (I figure the taxes, transportation fee and about $250 for the salesman) and go into the dealer who has the car I want. I grab the first salesman I see and ask him if he wants to make $250 for 10 minutes work. I TELL him which car I am buying and that I'm not some flake who needs to work out the payments. I tell him if he doesn't want to sell me the car on his lot, the dealership 20 miles down the road will, via dealer swap. He usually bites, spends ten minutes on the forms and passes me off to the A.S.S. (After-Sales Salesman).

This guy I tell to save his breath, I'm NOT buying any add-ons. Period.

I'm usually in and out in 30 minutes or less.
+10 Rank Up Rank Down
Aug 21, 2012
I bought my first new car last October. I had done some basic research before entering the dealership, we took 2 cars for a test drive, and haggled with the salesman over the price, then we took a photocopy of his notes, and we left to review our options. After doing some specific research and comparison on the car we selected, we re-entered the dealership a few days later and spoke with the same salesman, and proceeded to bargain for a few extras, before agreeing to the price. While sitting with the finance guy, we noticed a discrepancy in the price, and a discrepancy in the extra warranty that the salesman had thrown in for free. The Finance guy argued that the salesman would never make that deal as it would mean the dealership would lose money. We informed the guy that we were prepared to walk based on the shoddy business practices, and then we showed him the salesman's notes. We got the price back to what it was supposed to be, and they threw in an extra year/kilometers of warranty for our troubles, free, on top of the already offered free extended warranty.

I wouldn't call the process a success, it took a lot of time and was very frustrating.
+5 Rank Up Rank Down
Aug 21, 2012
New Cars are standardized: Manufacturer X, Model Y, Extras {Z}. No individual wear and tear.

Why can't new cars be sold on an open exchange, like securities?
Say, one or two auctions per week, supply and demand determine the one price that clears the market and that's it.
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