Buying or selling a car? Here's how to make the dealership sweat.

THERE IS A LOT OF ADVICE on the Internet about buying a car.  Advice such as "don't fall for the bait and switch" and warnings about "yo-yo financing" are discussed at length because car dealerships make money on the innocent who just want a car.  Sometimes, their tricks of the trade become real hocus-pocus and before you know it, you are under their spell and willing to sign away your hard-earned money. 

     These are all worthy pieces of wisdom to help insulate you against the pavement sharks that wander the dealerships in your town for the slightest scent of your blood.  A bit of advice up front before venturing out to buy a car:  Do your research, get pre-approved for financing from a trusted source, and know what you want before you go out and buy.  If you walk in any dealership in a bind for a vehicle, with poor credit, and feel stressed to get a car today, then you might wind-up with a car you don't want, a payment you can't afford, and the ever-present feeling you were taken advantage of every time you turn the key of your new automobile.

   Why can't shopping for a new car be painless, and stress-free?  After all, you're there to buy something from them.  They should be happy you're there and treat you like a valued customer.  The truth is, car salesmen are under a great deal of pressure to sell as many cars as they can.  They compete against each other to be the best, earn incentives from lenders (which seems unscrupulous) such as vacations and bonuses, and keep their bosses and sales managers off their backs.  With so many car dealers out there, know that you have options.  Even if you have poor credit, there are multiple venues to shop.  In our modern age, there is a wealth of information out there at your fingertips.  You can even buy from private owners or online dealers.

If that car makes a left, you know it's going back to the dealership.

My story

     After buying my share of cars and feeling like a sucker afterwards, I decided to change the way I played the car-buying game.  Don't get me wrong, I never bought a "lemon" from a dealership, but I know they're out there.  My biggest problem was always agreeing to a price I originally didn't want to pay, or adding in extended warranties (so the guys in the back office get a cut of the action; don't fall for it).   I decided to do some research for the kind of vehicle I wanted--a 2012 Nissan Frontier 4X4 V6.  It's a smaller truck that would meet our needs for hauling wood, bicycles, or large items we wanted to donate to charity.

A great truck for those who don't use a truck for work, but need it for home use.

     Armed with the knowledge about the vehicle I wanted, I called my bank and applied for my own auto loan (instead of a dealership's financing--effectively snipping off their chances at steering me into a loan I couldn't afford).  My bank gave me an amount I was approved for; if I could get a car for less than I was approved, my car payment would be much lower.  I had a fixed interest rate, too, so that helped.  With a blank check in my briefcase, I went to the dealership with a few tricks up my sleeve.

     I didn't tell them I had a check and made no mention of my approval.  I told them what I wanted and the options I wanted for it.  I actually didn't have the wiggle room for extensive upgrades and knew I would probably just take a near-base model truck from their lot.  I also had a car I was still paying for, and needed to be free and clear of it before I could buy the truck.  I made it clear that if the dealership couldn't take my car and pay it off for me in exchange for the truck, then I would just have to keep my current car and forget about buying a truck. 

     That made them pay attention to me even more than they already were.  I sent the message I didn't really need the truck, but I did want it.  In addition, I wasn't in dire need of a vehicle.

     After a test drive of the truck, I threw them a curveball.  I knew the truck I was driving was a 2012 Nissan Frontier, and it was the color I wanted, but it wasn't a 4X4 V6.  I was test driving a two wheel drive four cylinder.  The engine was underpowered for what I wanted, and I also knew a 4X4 V6 would fetch a better resale price.

"What did you think of the truck?" the salesman asked me after the test drive.

"I think that was a waste of time," I said coldly.  "I want to speak to your sales manager.  That was a four cylinder truck that didn't have the four-wheel drive I was looking for."

Shots fired.

     The salesman was off-balance.  He is on the edge of losing a sale, and he knew it.  Remember:  I am not under pressure to buy, and he showed the first signs of nervousness.

     After a protracted apology, the salesman  fetched a new set of keys for the truck I wanted.  On our next drive, I spoke less and usually answered his questions with a one word reply.  When we returned, I handed the keys to the salesman and told him to alert his sales manager that I was ready for him to make a deal for me.  Again, they didn't know I had a check. 

     "Well, before I go, how much are you willing to spend?" the salesman asked.  This is a trick--they know how much the MSRP is, and they should have already mentioned their discounts and incentives they are including in the deal.  If your salesman asks you for how much you're willing to pay, push back in a professional way and tell them you'd like to hear the sales manager's offer first.

The old Mercury badging.  This was used on American cars during the 1950's, but Ford trucks sold in Canada were badged as Mercury.  Sweet!

Things get dirty, so prepare yourself

     The car salesman is usually not the employee who makes the offer for you in terms of dollar amount.  They are the middleman.  Usually, the sales manager sits in a glass-walled office with a phone in his ear.  They may or may not be talking to anyone.  Really, it's anyone's guess.  The fact you are not speaking directly to the sales manager affords the dealership a buffer that works to their advantage.  With this in mind, I decided to use a few buffers of my own. 

     My wife is my partner.  She has a shrewd mind and, to her credit, can usually see through a haze of deceit a lot faster than I can.  While she would have been a powerful co-chair in this decision at the dealership, she was even more powerful on the phone with me.  The salesman had his sales manager behind a darkened glass wall, and I had my wife on speed dial; I just needed to have the self-discipline to run everything by my wife before I took a step during the negotiation phase.  Again, this puts the dealership on unstable ground.  It's annoying to a dealership when a man needs to speak to his wife before committing to buying a car, but if a dealer were to ask why do you need to call your wife?  Do you not wear the pants at home?  They would put themselves out of a sale, and possibly some bad press if the customer were to complain about the dealership for their sexism.  Imagine the pain they would endure in today's society if word got out they insulted the family or disparaged women.  I had my ace. 

     During the negotiations, I would frequently say "I need a minute to run these numbers by my wife to see if it meets our budget."  The salesman would leave me alone at a desk and go into his sales manager's office while I had my iPhone at my ear.  This allowed me to take a break and ask myself if the deal was going the way I wanted.  No matter what we discussed on the phone, I would wince and shake my head at random times.  I knew the manager and salesman were watching me.  I realized quickly the deal was sweetening each time they came back.  But it wasn't sweet enough.

This would be a sweet ride, but I'm sure Robin hated washing this beast.

Dropping the first finance bomb on the dealership

     The dealership was moving the conversation to financing, and rightfully so.  They need to close the deal.  At this point, all of the delays I threw at them in terms of financing had been exhausted.  After they made their final price offer before the finance talks began, I said "I'm already pre-approved with my bank, and I need to get the price into a monthly payment I can afford."  My phone calls would bounce between my bank and my wife to discuss payments, with the salesman and sales manager scribbling down quotes.  Often, I would look at the hand-scrawled dollar amount and run it past the bank.  If I felt it was too much, I would grimace and give a brief shake of the head.  The dealership had to come up with a total price that would meet my budget and my bank's approval.  If they couldn't do that, then my hands were tied, and I had to leave.  Again, the pressure was on them to make me a deal.

Dropping the second finance bomb

     By now, the dealership was exhausted.  I sensed they were going to offer me their financing under the veil of your bank is giving you too much grief.  That's a safer gamble for them than insulting my marriage.  However, when I reached into my briefcase and withdrew a blank check, they became much more enticed.  I said, "I have a blank check from my bank.  I'm pre-approved for a certain amount.  If you give me a deal I won't regret, this check for that amount is yours right now.  Otherwise, I'll take a chance elsewhere."

     I held all of the cards, and I was running the table.  Give me what I want, or I'll drive out of here with a blank check.

     To the dealer, that blank check was a sure thing, and they didn't want to lose out to some dealer down the street.  The dealer made five offers, but the final one saved me over $5,000 on a crew cab, 4X4 V6 truck.  The dealer got the check and my old car (which they paid-off), and I got the truck I had wanted, and felt not an ounce of regret the next morning.  I was happy with my truck purchase for years.

Five years later

     I put over 80,000 miles on that Nissan.  My family used it during tornado rescue efforts in 2015.  I (foolishly, but successfully) drove the truck through a flood, I was rear-ended at a stoplight, a coyote slammed into me one night as I drove down the highway, and someone backed into the grille in a McDonald's drive-thru.  It sustained its share of hail damage, too.  My insurance worked with me to have it repaired every time.  Though wear and tear took its toll, the truck was still a strong little monster.  The V6 engine and switch-activated 4X4 proved themselves at every turn and every rescue.  As my wife and I discussed upgrading our vehicles, we settled on selling the Frontier to get a larger truck.  What I didn't know was how valuable the truck actually was.

     The dealership I bought the truck from called me one Saturday afternoon.  They were going to an auto auction, and were looking to buy back former vehicles from former customers so they had a stable of automobiles to sell.  They wanted to buy my truck outright or I could use it in a trade for a newer vehicle.  I deliberated with my wife.  We wanted a new truck, but my wife did not want a new Frontier or Nissan Titan.  They are nice trucks, but she had her heart set on a Toyota Tundra.  With this in mind, I took the truck to the dealer to have it valued.  What happened next blew my mind.

You want to buy what?

     As I mentioned, the truck had some history with me.  I figured it to be in fair condition (not excellent) and wouldn't get me much, but I would at least get enough for a down payment on my next truck.  We checked out an online source to see what it was worth.

     With the truck's age, mileage, engine, and variable drive options, in fair condition, the truck was valued at approximately $11,000.  Not too bad.  I knew I would not get that much from a dealer trying to turn a profit at an auction.  I thought the dealer would offer me $5,000 at most.

     Selling a car at a dealership is a lot like buying a car at a dealership:  negotiation is a common thread.  Of course, the dealer would rather you trade-in your vehicle versus selling it to them without buying another from them; they'd rather profit twice rather than once.  They will try to entice you with have you checked out our new Nissan Titan V8 trucks? Hold your ground for what you want.

     As we started our talks, the (not the same from years ago) salesman asked me how much I was looking to make off the truck.  This is shady.  They want a dollar amount from you before they talk to the sales manager.  I tipped my hand and said, "well, I know you probably want to make a profit on the truck at the auction, and the truck is worth about $11,000.  It's a 4X4 V6 crew cab with one owner.  I would like to make $9,000 on it at least."

     The salesman went to a glass office to speak to a greasy-haired, goateed sales manager.  Selling your vehicle may happen at the used car side of the dealership.  As they deliberated, I watched them, and I wanted them to know I watched them as they talked.  This made them uncomfortable.

     A few minutes later, the salesman returned to our cubicle and asked me if I'd take $8,000.  I told them it was too low and asked for my keys, which were left in the sales manager's office.  The salesman started to sweat as I got up from the plastic chair. 

Why is he sweating, I asked myself.  They're buying a truck they don't really need!

     I crossed the hall and politely looked out the window, waiting for my keys.  I resigned to keeping my little Frontier. 

     "Hey, sir, will you take $10,000 for it?"

     What?

     "Give me a minute," I said as I hid my surprise and glee, "I need to call my wife and see if that number is acceptable."  I seriously called my wife and quietly informed her how the negotiation was going.  She was shocked they were offering as much for the truck as they were--so was I.

     I told the salesman I would think about it over the weekend and come back Monday.  In addition, there were a few other dealerships I planned to visit.  I thanked them for raising my curiosity and encouraging me to search for the best value for my truck.

You have to be kidding me

     I started my Nissan and fastened my seatbelt.  I called my wife.  Now that I was outside and alone, I could speak candidly.  Suddenly, the salesman rushed out to my truck and blurted, "I'll give you $12,000 for this truck right now."

     My guts clenched as the blood drained from my face.  The dealership increased their bid by four thousand dollars in the span of ten minutes in an effort to buy my truck.  Rather than waste time thinking about it and their motives, I agreed.  They'll have my truck for their auction, and I'll have $12,000 for a hefty down payment on the Toyota Tundra the wife wanted.

A bit of advice

     Sell your vehicle to a dealer, if you can manage to.  Your vehicle will fetch a higher dollar value in a sale than it will get you in value for trade-in.  Even if the car you want is on their lot, make no mention of it.  Sell your vehicle to them, get the cash, and use the larger dollar amount as a bargaining chip for a down payment later.  Furthermore, my results may not be your results.  Do your research, remain calm, and don't let them get you over a barrel.  You don't need their car.  Until car buying matures into a more equitable relationship, we are stuck haggling and negotiating under a façade of pleasantries.  I got better deals shopping in the open-air markets of the Middle East rather than a car dealership in Oklahoma City--but that's a story for another day.  --The Atomic Father


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