By Joe Yannetty, screenwriter, comedian, salesperson, and motivational speaker
This post will debunk a few car-buying myths and how to lower your monthly car payments. Even during a pandemic, some of these scenarios can still happen, which is why you’ll still want to use these 7 smart car buying tips when negotiating a new or used car price.
1. UNDERSTAND THAT YOU HAVE ALL THE CONTROL
Remember this smart car buying tip: the person with the money has the control. That person is YOU, the buyer. Everything car salespeople do is designed to rush you, and to take control away from you, leading you into buying a car. Be in control of your feelings. Staying in control will be tough when you’re being put under pressure. If you feel uncomfortable take a break. Take a walk around the block. And take the paperwork with you. Remember, you have all the control, you don’t owe them anything.
2. USE A CALCULATOR
A calculator to a salesperson is like a crucifix to a vampire. For a potential car buyer, it’s a smart car buying tip. Here’s why: if the salesperson merely writes down numbers and says, “we’ll give you this much for your trade, we’ll do this much for your payments, and this much for a down payment…” there’s no way anybody can calculate the payments in their head.
But if you take out your calculator and add up their numbers: the down payment, subtract what you’re getting for your trade, and then add up all your monthly payments—it’s going to add up to a number that is so big you will laugh, because you know the truth. You did your research. You just figured out how to save money on a car purchase!
3. THE FOUR-SQUARE PAPERWORK IS A DISTRACTION
Car salespeople want to segment the numbers so you’ll perceive them as small. The four-square paperwork they show you is completely made up by the dealership. There is nothing official about it. Buy creating an official-looking paper with special sections for each part of the deal, it is designed to make you feel like you have to comply with their requests in each area.
You did your research and know what your old car is worth. Now comes the next part – figuring out how to sell your own car: place an ad and then collect your money. It’s pretty simple. Car trade-ins by nature lead to a huge money loss. People do a trade-in because they are lazy, or afraid, or ignorant of the fact that they are automatically losing money. Selling a used car will result in more cash than a trade-in.
What to say to a car salesman: once you know the car and model you want, ask this, “How much are you going to sell this car to me for? What is my total price out the door?” When you add the phrase, “out the door,” it indicates you are talking about the final price—no surprises or add-ons.
They might say something like, “we’ll have to see what we can get you financed for, what kind of rate…” to divert from the total amount of the car.
To stay in control of your feelings, stay focused on the total purchase price: “This is the number I want to negotiate right here. What’s the dealer invoice price? How much did you pay for the car? I’ll allow you to make a little money, but I want to know exactly what this number is.” Work from there.
They may try to go back to your trade. Don’t talk about anything else until you settle on the total purchase price. Just say you don’t have a trade. Change your mind later if you want to.
They may try to distract you with talk about the down payment. Get back to where you want to be: “I don’t know what my down payment is going to be. It all depends on what the total selling price of the car is.”
If you can’t get a straight answer, simply say, “Why won’t you tell me what the total selling price is?” Any time they try to get you off of the total price, pretend you are naive. “I’m really sorry, but I don’t understand why we can’t talk about the total selling price of the car.”
It’s a myth that you have to put down at least a third. If you have a great credit score, you can determine whatever you want that number to be, even zero. After you settle on the total purchase price, then you can tell them how much you have decided to put down, if any.
7. YOU DETERMINE YOUR MONTHLY PAYMENTS
They might say things like, “So what if this car costs a million dollars? If I can sell it to you for twenty bucks a month. You’d buy it right now, right?” And somehow it works logically in your brain and you say yes. That’s when they’ve got you.
You should never be negotiating monthly payments. Once you settle on the total cost of the car and subtract your down payment, your calculator (with your bank’s financing numbers) will tell you what the monthly payments will be. It’s math!
These are well-known car sales tricks and techniques. Don’t get distracted. Concentrate on the total sales price. Listen to your gut. If the salesperson is taking you away from the total price and you can’t figure out how to get back, walk away. A sale should happen on your time, not theirs.