Typical Automotive Dealerships

Previous Page - Buying a Car or Truck

Before going to an automotive dealer to buy a new or used car or truck, you should be mindful of the forces arrayed against you in a high pressure sales environment.


Remain mindful of your environment and remember that the automotive dealer is NOT on your side.

When you go to a dealership, understand that they have a well-trained team of sales specialists who have a lot of experience using high-pressure sales techniques designed to maximize the amount of money you pay for their new or used car or truck. The same can be said for their service department and body shop.

Besides salespeople, dealers employ a sales manager, numerous assistant sales managers, a finance manager and sometimes assistant finance managers, all of whom are under the direction of a General Manager. This mix of personnel is compensated through some form of sales commission, and they have unquestionably no motive for giving any customer a break on any vehicle sale. The sales team is selected for qualities inherent in a 'good' salesperson and are educated and trained to maximize the amount of dealer profit on each and every sale.


A dealership characteristically will make higher profits per transaction through a sale or special event than on a 'normal' sales day. How could that be possible? A 'sale' only means that something is available for purchase, it does not mean that a discount or other form of price-break will be given. Dealer sales are well orchestrated events designed to get you on their lot. You are not going to arrive to find the specially priced car in the circular or to find that their 'pure-pricing' is going to result in you getting a car at a good price. Even worse, that 'free' television, Caribbean cruise or some mysterious 'challenge' from a local credit union does not mean anything other than that you will have to pay more money to cover the additional cost of the 'free' giveaway or higher interest on your loan.

Dealerships advertise for the purpose of getting you on the lot. When you arrive they have an excellent chance of selling you something, whether you like it or not. If you are gullible enough to believe in a commercial alleging special pricing or a newspaper ad promising a popular car or truck for an unbelievably low price then you really have no place in a high-pressure sales environment. Dealers primarily employ salespeople who make 100% commission because it requires them to pressure you relentlessly for every dollar possible.


Buying a new or used car or truck is a deliberately complicated process which involves several distinct phases; deciding which vehicle you want, determining how much you can or will pay, negotiating the price with the dealer, discussing your trade-in, and finally paying for the vehicle using cash or through some form of financing.


Be aware that the dealer's salespeople have a very strong incentive to lie to you. It is called a paycheck, and for every dollar they make they must make you pay many dollars. A salesperson will tell you whatever it takes to get you on the lot. Looking for a specific color and interior combination? They will tell you they have several of that very car just waiting for you to test drive. When you get there, they have mysteriously disappeared. Salespeople care about their income; they do not care how far you have to drive, if you are wheelchair bound or if you think you already have made a deal for a specific price via phone or email. They need you to be on the premises, and whatever it takes to get you there is okay with them.

There are many reasons that most people do not like or trust anyone involved in car sales. Several, if not the majority, are basically straight-faced liars who are more than willing to communicate to you anything required to get you to purchase. Free oil changes for life? Done! Just wait until you show up in the service department and explain to them how you are not supposed to pay for the oil change you just waited three hours for, or that your first tune-up was supposed to be free. You would not be the first person to fall for the false promise of free service, parts or accessories. You would not even be the ten thousandth person to fall for that particularly heinous deceptive sales practice.

When you purchase a new or used car or truck from a dealership, keep in mind that the salesperson, their sales manager, the finance manager and the general manager all get a percentage of the earnings derived through your acquisition.

When you take your vehicle to a dealership for service, your mechanic, the service adviser, their service manager and the general manager all get a percentage of the income generated through servicing your car or truck.

Dealer sales and service procedures are calculated to obtain a higher sales price, a greater monthly payment, an extended financing term, a lesser trade-in allowance, etc. Despite how pleasant the sales and service personnel appear to be, you represent a percentage of their salary for that pay period and it is in their best interest to profit as much as they possibly can from you every time you have reason to cross their path.

Nothing in a dealership sales process exists to promote your interests other than yourself.


Many times, usually on weekends and holidays, a dealer will offer a chance for prizes to anyone showing up for a sales event; free groceries, free vacation, a free car or truck, etc. The prize is generally only available to persons 18 years of age and older, and they require that each participant fill out and sign an 'entry' form. Sales personnel will take the prize entries and run credit inquiries inquiry using the information provided on the form.

It is not usually of any benefit to sign up for these 'giveaways' at any dealer event.


Until you have made an agreement on the vehicle you wish to purchase, there is no reason to relinquish the keys to your trade-in. Even then, give them a spare key and not your set of keys. As frequently happens, you could end up requesting your keys over a number of hours while the dealer's sales team makes every effort to pressure you into buying. If you end up requesting your keys more than two times and the dealer does not make an effort to return them to you, and you don't have a spare key or they have removed your trade-in to an area you cannot access, call the police non-emergency number and explain the dealer's efforts to hold you against your will and make a full report of the incident. Afterward, contact an attorney. Dealers will only stop this reprehensible practice when people start taking serious action. You would not allow Wal-Mart, Target or Best Buy to keep you from leaving their store, so why would you allow a car dealer to hold you against your will?

Don't let the salesperson know you are enthusiastic about a particular car. This includes your first contact to see if they have what you are looking for in stock.

Once they can determine that you are looking for something specific and that they have one in stock your ability to negotiate price is seriously compromised. People who make emotional purchasing decisions are not likely to receive a good deal in a high pressure sales environment and should probably bring a family member or friend to assist them.

If you want to leave a dealership without buying they will often ask for a deposit to hold the car you want or as a sign of good faith to show that you are serious about purchasing. I will avoid the obvious irony about the dealer asking for a sign of good faith when they very rarely deal in good faith. First, a deposit will not 'hold' the vehicle you want, they will sell it if they can. Second, if you decide not to buy they will simply keep your deposit. What is your recourse? Hire an attorney to get back $200 or $500? This is likely THE MOST POPULAR TACTIC A DEALER WILL USE if you do not buy a car that day. It guarantees that they will see you again, and they could care less about making you angry.

If you give someone money, voluntarily, then do not be surprised when they do not give it back to you. That's not a crime. Do not give a dealer any deposit unless you are okay with never getting your money back. If they need 'proof' of your intent to buy a vehicle then pinky-swear, or raise your right hand and swear you are serious, or make them prove to you their intent to give you the best deal by giving YOU a deposit.

Never provide a dealer with your driver's license or social security card unless you are asking to test drive a vehicle. Otherwise you will spend several hours trying to get them back. If you plan on test driving a vehicle, have them make a copy of your license and make sure they give it back before you actually go on the test drive.


Salespeople, at least the more experienced ones, will have photographs of wives and children readily available, they will make small-talk about their children's education, summer camp, the high costs of raising a child, etc. They do this in an effort to silently help convince you to pay a higher price and help out 'the little guy'. This tactic has a small element of truth in that they must make a living, but mostly it is an effort to take advantage of your sense of fair play. Many times the salesperson playing on your emotions is not really married and/or has no children.


Unless you are leasing a vehicle for business purposes, and went to the dealer with the intent of leasing a vehicle, do not let the dealership 'flip' you to a lease. Leases typically do not provide any advantage or benefit to anyone other than the dealer and salesperson. Dealership profit and the sales commission on a lease is a great deal higher than the profit and commission from a sale, so they are VERY motivated to get you to sign a lease.


One of the most important things for you to remember is that you can leave the dealership any time you choose, unless you gave them the only key to your trade-in or they have your license. In fact, before you even go to a dealer you should prepare yourself to leave without buying. If you cannot be ready for that then you will not likely get a good deal. You are not obligated to consider to any deal or to meet sales managers. If you can make it known to everyone that you will not be pressured into making a decision you will receive much better treatment.


Your credit rating has no bearing on the price of the vehicle.

Financing the vehicle you wish to buy only applies if you do not have the cash to pay for it outright. Very often, your salesperson will ask you to complete a credit application to help them determine your 'credit worthiness' or to allow their finance department to get started on your paperwork. Your credit rating (or lack thereof) has nothing to do with negotiating the sales price of the vehicle. Your credit worthiness affects your ability to obtain financing, not how much their product is worth.

You should not finance through the dealer, anyway, for a number of reasons. Primarily because they will profit from your financing, meaning you can save money, usually a few thousand dollars or more, by arranging your own financing. Most dealer 'financing' is not financing at all, but rather an installment contract, which they then sell to a bank or other lender. If your dealer claims they won't (or can't) accept a bank draft from your lending institution then leave.

If you have no other option than to seek financing from the dealership, DO NOT COMPLETE A CREDIT APPLICATION UNTIL YOU HAVE NEGOTIATED THE PRICE OF THE CAR YOU WANT TO BUY AND HAVE ALSO REACHED AN AGREEMENT ON YOUR TRADE-IN. There is absolutely no benefit to you in filling out a credit application until you are ready to buy. Your salesperson will pressure you to fill out an application to determine your credit worthiness; you must resist this pressure as completing the application only benefits the dealer at this point in time. If they persist then leave and seek out a different dealer.


Providing the dealer with a lot of personal information is not in your best interest. For example, how much of a monthly payment you are prepared to pay or capable of paying is none of their business. That has nothing to do with the cost of the car, nor does it affect the financing. Financing terms are set. For example, if you negotiate the price of a vehicle to be $17,850 and will finance for 48 months at 2.9% interest your payment will be $X.XX.

How much of a payment you can afford does not affect the math, but it does allow them to restructure the deal to what you are willing or capable of paying. If the payment would have been $322 per month and you told them you were willing to pay $415 per month, their deal will magically transform into one that requires monthly payments of $415.

Similarly, keep any relevant information to yourself; the amount of your down payment, any trade-in, your annual salary, the name of your cat, etc. None of this is information they need to know unless and until you begin the finance process.

Providing information such as the above helps the dealer's sales team to capitalize on the deal and increase their profit margin. Provide personal information sparingly and only as needed. Do not provide your full name until you have made a decision to purchase and are ready to finance. Do not provide the dealer with your contact information. The less information the dealer has about you the better off you are.


Only seek dealer financing if there is no other option available to you.

Dealerships make as much or more profit by arranging the financing of your vehicle than they make selling it to you. The primary goal of the dealer finance department is to make every effort to obtain the maximum amount possible from each and every customer. This includes getting the highest payment at the highest interest rate for the longest period of time. It also includes selling extras, such as extended warranties, GAP insurance, interior and exterior prep packages such as silicone paint treatment and seat stain protection (essentially wax and Scotch Guard).

To accomplish their goal, finance managers use a variety of tactics, such as selling claiming your credit is bad and that you are being charged a higher interest rate, that you are required by the lender to buy an extended warranty, that they will pay off the remaining balance on your trade-in, etc.

The dealer may even 'conclude' the deal and send you home with the vehicle, only to call you back days or even weeks later to tell you that the terms have changed. If you don't like the new terms they will likely make you turn in the car plus they will keep your down payment.

As stated earlier, it is most important that you arrange your own financing before car shopping.


Many times a buyer will place a premium on their trade-in. Dealer's understand this and use it to their advantage. Make sure you have a clear and realistic understanding of what your trade-in is worth before you go to a dealership. A dealer will often propose paying you a 'premium' on your trade-in if you pay a premium for their vehicle. Dealerships frequently use this and similar tactics to convince you to pay their asking price for the car or truck you want to buy. Ask if they are willing to buy your trade-in outright for the amount they claim to be offering. Usually it is most profitable for you to sell your used car or truck to some person other than to a dealership.

I certainly do not recommend that you buy a new vehicle if you still owe money on your trade-in, for several reasons. Primarily, instances of dealers promising to pay off the remaining balance on a trade-in and then not doing so appear to be on the rise. You could very easily end up in a situation 6 months to a year after buying a new car where you are being sued for not paying off your trade-in.

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