They’ll introduce themselves, and it won’t be long at all before the the idle chat (which is really an inquisition by a trained salesperson) begins to ensue.

Most people tend to believe that this seemingly softball conversation is just that and no harm… no foul.

Not so fast though… this is actually the beginning of the car buying sales process, and here at acarbuyinguide.com we just can’t let you get off that easy. You want to learn how to get your best card deal don’t you? Then you need to know when the sales process actually begins… and it just did.

Never forget… the goal of the SALESperson is to sell you something and you can bet that it their focus on you.

So, I would like you to take this short little quiz over such a scenario as this… are you ready?

• Salesperson: – after the brief introduction…. “What type of car are you interested in?”
• You: “The LX-vr7″ (names have been changed to protect the no so innocent)
• Salesperson: “Do you have a trade-in?”
• You: I do… it’s a (insert year) (insert car).”
• Salesperson: “Do you owe anything on it?”
• You: “I think around $4,000.”
• Salesperson: “How much are you paying per month?”
• You: “Around $300″
• Salesperson: “And how much are you looking at budgeting for your new car?”
• You: “Maybe $350 or so.”
• Salesperson: “Let me ask you… if we found just the right car for you, would you have the flexibility to go say $375 to $400?”
• You: “That would be a little high, but for the right car, I would consider it.”

Okay…

So what is harmful about this very typical type of conversation?

First let me back up just a bit and say that for the purpose of brevity, all of the small talk between each question and answer has been scrubbed out. The point being so you can see exactly what type of knowledge the salesperson is gathering here.

There are six buyer responses to questions just above… how many mistakes can you spot the buyer making as they relate to the car buying – deal getting process?

Take your time………….

Of the six lines that the buyer had just above, they made car buying mistakes in at least 5 of the 6!

The buyer (or you) have just had your expectations bumped and beyond that, you’ve just given out valuable information that can (and will be) used against you later on during the negotiating process and end up costing you thousands of dollars.

If you’re not sure what went so wrong with the innocent conversation and exchange of information, then you need to spend a little time on the website… or fast track your way to saving big on your next car purchasing by ordering a copy of my top selling car buying guide.

Oh… okay… here are the answers to the car buying quiz… seriously though you should at least check out the details of my car buying guide.

So, let’s break it down.

By the way… if you’ve found your way here and not taken the quiz yet, you need to do so… go here for car buying quiz.

What just happened with a little bit of seemingly harmless small talk out on the lot between you and the sales person?

For the salesperson… plenty.

The sales person now knows:

• You are planning on trading in.
• What you owe on your trade-in.
• What your position of equity or negative equity you are in.
• What monthly payments you’re comfortable with.

And has gotten you to already mentally spending $50.00 more per month than you intended.

The biggies here are the monthly payment information and the fact that you’ve just been mentally bumped.

Good job by the salesperson… you however… need to invest in my car buying guide.

Right now the salesperson has about $3,000 more negotiating dollars in his/her favor to work your deal with… or should I say… against you.

$50.00 per monthly payment bump times 60 months (standard 5yr financing).

You openly admitted that your current payments were around $350.00 and you openly admitted that for the right car you would consider as high as $400 per month payments… so here is some typical math given the two payment amounts over the life of the loan.

If you were able to stick to your original $350/month budget had you not revealed it to the salesperson.

18,500
5% Interest Rate
60 mo
349.12 x 60 = 20,947.20

========================

But… since the salesperson has bumped you mentally both the salesperson and the sales manager can pour on the pressure (and oh yes, the charm) knowing that they can most likely get you to $400.

Here is what your $400/mo payments look like over the life of the loan.

21,200
5% Interest Rate
60 mo
400.07 x 60 = 24,004.20

You can see that by using the mental bump method in the car buying process, the sales staff has you now paying almost $3,000 more dollars in total.

This is why you NEVER give up any of this type of information to the salesperson during the course of any conversation.

They simply do not need to know anything about your budget or what you want your monthly payments to be. The only information the dealer needs at this point is your name and what type of car you’re looking for… period.

Not much, don’t want to bore you (or me) with it, but you would probably like to know that the information on negotiating car prices in this website comes from several years working in the automotive industry and not just somebody piecing together information on all this and sticking it up on a web site.

I started on the sales floor. Worked my way into the F&I (finance and insurance) office. More on F&I of course later. From there I moved up to used car manager, then new car sales manager, and finally general sales manager. Pretty typical path for those in the business wanting to go beyond the sales floor and get into the management side of things. O.K. hope that’s enough on me.

So, let’s get started….

The very first thing that you must understand before venturing off car shopping, is that you must take some time to do your homework and educate yourself. And unlike not too many years ago, before so much information was readily available on the internet, today this task is really easy to do….

But to do is a must.

Aside from the frustration, headaches, and even heartaches that taking the time to get yourself up to speed on how to negotiate car deals can save you, taking the time to do so is like paying yourself.

That’s right. Paying yourself.

Knowing how to negotiate car prices and knowing what’s going on can save you literally thousands of dollars. So, you get paid to get yourself schooled. Still not sure if you want to put forth any effort in the area of car buying and car negotiating education before you go vehicle shopping?

Some simple math perhaps to shed some light.

Suppose that you spent just 10 hours learning about all the facets and variables about what come together in negotiating a card deal, and let’s say that with those 10 hours with a higher degree of enlightenment and confidence you were able to save yourself $1,000 either on just a purchase price of a new or used vehicle or in trade difference if you were trading in a car.

The math is easy….. you just paid yourself $100 per hour to do that research. Not a bad wage! And now you posses a skill you can carry with you and build on the rest of your car buying life.

First of all, automotive dealers (or any business for that matter) is entitled to make a profit on their goods and services. I am not advocating that with a little practice you can whittle the dealer’s profit down to nothing by driving a hard bargain.

However, the very nature of the car business and car dealings can put the average person at an expensive disadvantage.

Especially if you are a bit of a mild mannered person. You may feel as though you have been taken advantage of during previous car shopping excursions. Perhaps you have. Many people do feel that way.

But if you go and try to ‘wing it’ without understanding what it is you’re doing and how all the pieces of a car deal fit together…….. taken advantage of???? I can’t say that with all certainty. That’s a personal perception.

But, probably paid more than you needed to??? ……. Very likely.

Let’s take a look at some of your prep work with some… car buying basics

We’ll cover some of the costs involved in the actual automobile ownership experience, what to expect in general, automobile buying negotiating tips, and generally help you through the steps to buying a car as a whole process with your sanity in tact.

Remember the more knowledge you carry with you into the dealership the stronger of a negotiating position you command. What you don’t know puts you at a disadvantage and could cost you literally thousands of dollars!

So, at a high level what we are initially discussing here are two basic operations when buying or leasing a vehicle. Research and Educate first. Then (and only then) go begin the work of negotiating your next automobile deal.

When purchasing a vehicle it is important that you understand the nature of the beast.

Negotiating and working hard to put a good deal together is a vital part in the anatomy of buying a car. It’s not just ….. I want – I see it – I buy it…… that is unless you have unlimited financial resources, and if you do you probably wouldn’t be on this website right now.

When working on a car deal (and keep in mind as we go forward, the ‘deal’ is the complete package of events not just buying a car. O.K.) you will probably be introduced to and have to work your way through the various departments at the dealership.

Sounds innocent enough…… right? Well, maybe not. Let’s take a closer look at some of the pieces and see what’s going on.

Remember, each person involved in selling you your next car has to make their own living just as you do. They have their own monthly bills to pay, their own families to feed, and certainly enjoy some disposable income just as you do. That’s right. The salesperson has to get paid.

The used car people have to make their money (if you are trading in). The finance manager is also on some commission and bonus pay structure. As is the sales manager, and the general manager. And then there is the owner or the ownership group. They have the same wants and needs from each deal as well. Starting to get the picture?
The 3 Basic Pieces Of The Car Buying Deal

Car Buying Negotiating Tips

• New & Used Cars
• The Trade-In
• Financing

The big thing to keep in mind that each of these departments are operating under sales forecasts and goals and profit expectations from management and ownership. And believe me, at times there can be a rather intense amount of pressure applied to meeting these goals from the powers that be! And this can be to your advantage (or disadvantage if you are out there winging it).

Think of each of these areas within the dealership as a business within a business responsible for their own profit margin. Keeping this at the forefront of your mind is essential as you work your way through the dealership on your journey to put your best deal together in the car buying process.

Always treat each area separately in your steps to buying a car, and work your best deal individually with each department. This is an important point. Work each area diligently and mentally keep them separate. It isn’t just one big car deal you are working on. It has distinct pieces.

Let’s talk about what to do before you buy a car next…

When it comes to vehicle trade in value, certain sites provide a big help to buyers. These are practical ways which you can effortlessly access online and right there, consumers can visit at any time of the day. You can enter some of the basic information about your car and then receive an appraised trade in value of the car based on the estimated condition. This judgment is going to be higher than what you will find in other resources and with that, the internet is among the most user-friendly resources when it comes to trade in value issues on vehicles as it provides the user with a high trade in value for their car.

Should you have already considered vehicle trade in value for your car before at your local dealership, you experienced a moment when after the sales representative looked at your car and answered some basic questions and then they leave you for a short moment as they go back to their manager to establish the trade in value. This cautious process is where the dealership will research your car against unreliable data which they subscribe to obtain fair value for your car. The dealership uses a highly reliable source as it provides present pricing trends for your used car based on actual sales from recent auctions.

Vehicle trade in value is a very important aspect in buying a car without considering the resource used and instead highly considers the ultimate value which must be established between you and your local dealership in the same way that the final value should be placed after a physical check up of a car.

First… don’t ever let the dealer or salesperson put you in any car until you have completed all the financing paper work and the terms of your bad credit car loan are approved and locked down tight.

Keep your old car, take a bus, ride your bike… whatever… just don’t take the car you are looking at home until the deal is done… and I don’t mean the sales person telling you it’s a done deal. Buying a car with bad credit should raise buyer beware flags for you because you can be a huge profit center for a sales person and dealer.

Letting you drive off the lot with your car when your car financing hasn’t been approved is called a “spot delivery”. Dealers engage in this all the time, because they want the sale and they want you to fall in love with your new car. Although a common practice by car dealers, it isn’t the best thing for you to do if your buying a car with bad credit.

If you drive off the dealer lot thinking all is well, it might not be. You may get a call telling you that the dealer couldn’t quite get you approved and if you want to keep the car that you thought was yours, you’ll have to either pony up a bigger down payment… which you probably can’t… or you’ll have to sign off on a much higher interest rate… chaa-ching for the dealer… so don’t fall for this… especially if you’re buying your car with bad credit.

Bad credit car buying customers represent a bit more paperwork for the car dealer and car salesperson, but they also can represent windfall profits and sales commissions if the buyer is unsuspecting.

This is why it is critical for you to not only know your credit rating but also know what you qualify for and what your interest rate will be even with your bad credit. When you’ve got credit problems, salespeople will routinely try to push your interest rate up telling you that is the best they can get for someone with such a credit history; when in reality they are trying to maximize their profit by adding points your car loan which is profit for them. And when buying a car with bad credit, the more desperate you seem, the more points they may try to add to your car loan.

So… know the market and don’t accept auto financing without knowing what the interest rate is. period.

When you’re buying a car with bad credit, you’ve got to skip the extra’s that the dealer will try to sell to you. Again, these add-on’s represent nothing more than big profit for the dealer and commission for the sales person… so take a pass on these. The car dealer’s finance manager will work the angle that these extras will only cost you another $5-$10 per month… but don’t take the bait… since you are already paying a higher interest rate with your bad credit, these ‘little’ extras can mean thousands over the life of your loan.

Make sure your payments are going to be applied to the loan. Many people face the problem of interest rates that are pre-calculated which means you payments may just be going to the payment of the monthly interest while very little is being applied to the loan itself.

When buying a car with bad credit, the key is to get all the information you can upfront and before you go to the dealer. Get your credit report and shop your loan on-line in order to gain insight into what the market is for someone in your position.

Buying a car with bad credit doesn’t mean you have to be at the mercy of every shady deal out there…. but you do have to be aware.

It’s important to remember here, that as a car buyer you are in control of your own best car deal destiny as it were.

With so much information available to you today (especially right here on this website!), getting the best possible car deal really is up to you.

But, doing all of the necessary research does you no good if once you get to the car dealership and you get weak and cave in! You must treat buying a car as a business transaction not an afternoon of fun.

• Not a time to schmooze with a car salesperson. You want to work with a salesperson that is interested in working hard to put a deal together. So, before we finish up, let’s review what we’ve gone over to this point.
• Know your credit score.
• Buying a car is NOT a single transaction.
• Never, never, never negotiate based on a monthly payment.
• The sticker on the window of the car is the “asking price.”
• Holdback.
• Get yourself pre-qualified for your loan.
• The… ‘we’ll pay off your current car loan’ and get you in this shinny new car smoke and mirrors marketing.

I mean c’mon. Do you really think a car dealer is going to pay off your current loan just so they can sell you a new car?

This doesn’t happen.

What does happen is the amount of money you have remaining on your current car get added to what you’ll now owe on your new car. This just isn’t good money management even if your credit and your budget allows for it.

Think about it.

If you still owe $3,000 on your current car and you move that debt to your new car, you are now (as they say in the car business) upside down in your new car. And you know what happens as soon as you turn the key in your new car right?

Depreciation… and even more upside down.

And down the road when you want to trade this car in on your next new one you will be (as they say in the car business) buried in this car. And the only way out, if you are determined to do so, will be to write a BIG down payment check.

Keep these points in mind as you begin to take a look at your entire car buying options and possibilities. Perform due diligence in your research and self education. Approach getting your very best car deal as a serious business process because it is; you can bet the car dealer, the new car sales manager, the used car sales manager, the finance manage, and car salesperson do.

They all have to make a living just as you do and the most from each deal is their job.

4. The sticker on the window of the car is the “asking price” or the manufacturers “suggested” retail price.

Who cares? You shouldn’t.

You want to know the invoice or what the dealer has paid for the car.

And that’s easy enough for you to get at by visiting Edmunds, Great New Cars, or Value Pricing. Always work your negotiations from the invoice price up NOT the sticker price down. Forget the sticker price.

NOTE: Keep in mind if you are going after a car that is very popular in the market place the dealer will be less likely to negotiate. Remember your research and your best time to buy cars.

5. Holdback: I get a lot of questions on this little topic and have taken a shot at explaining it. Here’s a review on dealer holdback for you. Holdback is a bit of a sacred cow for dealers. You won’t see it advertised… unless it’s the fine print blurb at the bottom in the fine print telling you that in order to get this fabulous price…

“offer good for a limited time only with approved credit. Dealer retains all incentives, customer cash back, and holdbacks associated with this vehicle.”

It can be tough to get at the holdback during the course of your negotiations but don’t let that stop you from trying. For more on the actual holdback dollars and dealer incentives visit Edmunds, Great New Cars, or Value Pricing.

6. Get yourself pre-qualified for your loan at Automotive.com or Great Car Rates and know how much, how long, and at what interest rate you’ll be borrowing the money for.

In recent months, manufacturers have offered zero percent financing on many of their models. Granted this does sound like a great deal. And in many cases it is, but this shouldn’t preclude you from running the numbers for yourself and doing the math.

First of all know that these great rates may only be applicable to short term financing (which would mean significantly higher monthly payments), and your credit will pretty much have to be spotless in order to even qualify. Even if you can (and don’t mind) afford the higher monthly payments, still you must run the numbers.

For example: If your bottom line amount finance is $15,000 (after your trade, taxes, fees, etc) for 48 months at an interest rate of 4.25%, you will pay $1,337.59 in interest over the life of the loan.

Now let’s say that the car you are looking is enticing you with zero percent financing for the same period and a $2,000 rebate. As you can see, if you take the 4.25% financing and take them up on their $2,000 rebate you’ll actually come out some $600 plus ahead.

Certainly worth about the two minutes it takes to plug the numbers in a monthly payment loan calculator and find.

Car Buying Review wrap up next…

What is that?

In the vernacular of car dealers the back end part of the deal takes place in the finance manger’s office (F&I).

If you know nothing else about this part of the car buying process, know that the F&I person at the dealership is a sales person. Their job is to sell you products. Their job is to get the highest interest rate on your car loan that they can with sending you running out of their office.

They are responsible for the profitability of their department. If their sales don’t meet management and ownership’s demands and goals, they will eventually be fired.

Again, just so you have no question, the F&I manager is not your friendly financial advisor making sure that your money is most efficiently spent.

The point here is, and this is where many people give back much if not more than what they gained on the front end of the deal, don’t relax at this point in your car negotiations. If you do, it will cost you money. In fact, stay focused and in negotiating mode.

You may even come across salespeople and F&I people that may imply that in order for you to get the deal that you worked hard to negotiate on the front end of the car deal you have to do your financing through the dealership.

This is NOT true.

In fact, as a student of this website, you have already done your financing homework and know exactly what your credit score is and also how much money you qualify for and for what interest rate. And since you have done the aforementioned, you can now hold the dealership’s feet to the fire and let them know you would be happy to finance through them is they can indeed provide you with the best (or better) terms than you already know you can get.

Make sure you read the contract. I know, this sounds way too basic of advice, but you would be surprised how many people don’t do this. Also, make sure that anything that you have negotiated during the front end part of the car deal gets put in writing.

If, for example, you negotiated a year of free car washes or something such that made you feel good about the deal, make sure you have it in writing and signed before you sign any contracts.

In summary, just to be perfectly clear, the F&I office is another opportunity for the dealership to sell you something, and sell you something at a good profit. Anything they try to sell you, including interest rates, has dealer profit and sales commission in it.

Therefore, any of these prices are open for negotiating.

Stay focused, you’re almost done once you hit the F&I department at the car dealership… don’t give all your hard car buying and negotiating work back at this point.

Sure buying a car is an emotional experience.

Particularly if you have put a lot of work into your research and you haven’t had much luck finding what you want… then you finally do and you immediately go into a slobbering mess.

O.K. maybe not that bad… but you must remember buying a car is a business transaction. Don’t let your emotions cost you big money in the car buying process.

Aside from the obvious that your emotions can certainly cloud your judgment, they will also give the salesman an edge when dealing with you because now they know that you have fallen in love with a particular vehicle.

Salespeople will indeed use your enthusiasm and emotions to make the sale. That’s a big part of what selling is all about. As a salesperson you look for things that will build momentum toward the sale and you revealing your feelings of amour toward a car will only aid the process.

And this not only applies about what you love about the new car you are test driving and looking at, but it applies to what you dislike or grown tired of about your trade in.

If you talk about all the annoyances of your current car the salesperson will have a good idea about what to show you to keep your emotions high.

Keeping your car negotiating cards close to your vest doesn’t really take any of the research that we have stressed throughout this site, but it does take practice and concentration.

Don’t underestimate the importance of this concept.

If the car salesman knows your hot buttons they will push them! Again and again. But they can’t if they don’t know what they are.