
Confessions of a car salesman - nashequilibrium
http://www.edmunds.com/car-buying/confessions-of-a-car-salesman.phtml
======
nate
I've seen the "sell me this pen" type of test before. Got me thinking...

I wonder if anyone would like to play a competitive game where we pick a
commodity like a pen or anything really, and we challenge each other to see
who can get the most online sales in a timed round.

It's a twist on what a bunch of companies are already trying to do. E.g.
37signals rewarding the top affiliate with an iPad.

But I'm curious if anyone would play if it was a bit more generalized and
community controlled.

Each round we pick some different product or company and we compete to see who
can sell the most online. Not sure how to track it best. Maybe we stick to
stuff on Amazon. But how to verify the sales so that it can't be cheated with
photoshop?

~~~
bartonfink
The sales equivalent of a hackathon? That sounds incredibly interesting.

------
rkudeshi
Might want to add (2001) to the title.

The process has changed dramatically in the last 10 years (notably, the rise
of email negotiating).

Also, here's the 2009 update to the article: [http://www.edmunds.com/car-
buying/confessions-of-a-car-sales...](http://www.edmunds.com/car-
buying/confessions-of-a-car-salesman-updated-for-2009.phtml)

~~~
ghaff
When I bought my last car, I was rather surprised (though probably shouldn't
have been) by how unwilling dealerships were to quote prices by email or
phone. The article gives you a pretty good indication of why but, nonetheless,
two different dealers lost my potential business by basically refusing to deal
with me except by making an appointment at the dealership.

I did end up dealing with a third dealership in person but only after
confirming the availability of a model shown with a price in their Internet
inventory. The in-person process was still a bit icky but I knew I was getting
a good price on the car. I just deflected all attempts to play the monthly
payment game. And they ended up giving me a good enough price on my trade-in
that it wasn't worth additional fussing with.

Know the facts. Know what you're willing/able to pay. Separate transactions
whenever possible. Ideally, don't be in a hurry.

~~~
larrys
"unwilling dealerships were to quote prices by email or phone"

Several reasons. One is they can't close you over the phone or by email. Other
is they open themselves up to other dealers quoting a price that they won't
hold once you arrive at the dealer. And then that dealer gets a chance to
close them (after bullshitting their way out of the lie).

That said I've bought several cars by phone and have received prices by email
but get the best deals in person. That way you are dangling a sale in front of
them and they tend not to want you to walk out the door and go elsewhere.

In sales the more time somebody invests (either buyer or seller) the less
likely they are to walk away from something.

------
rkalla
Having read this piece before as well (it was very interesting) there is no
surprise that the _classic_ car-buying experience is so combative... it would
be like going to a shark-petting zoo where you are required to cover yourself
in blood before entering.

That being said, I'll share two stories incase they help anyone...

[1] I have 5 friends (from different social circles and age groups) that have
used Carmax to both buy and sell their cars (new and used) -- they have ALL
come back with praise for the company on the process, even after comparing car
prices online diligently before heading in. Similar the Saturn promise of "no
haggling" this shopping experience seems to be fairly solid. I have not done
it yet, only what I have heard.

[2] My best experience buying 2 new cars as well as a friend buying 2 new
Subaru's that I shared my strategy with went as follows:

Read owner's forums for the car(s) you are considering; Edmunds and standalone
owner forums were great for this.

Get a sense for the _average_ price people are paying for the cars around the
country. If you see a range of $33,000 to $36,000 then use an average of
$35,000 (for example)

Call a local dealership, tell them the car and trimline you want and exactly
how much you will spend OUT THE DOOR (always out-the-door) and to call you
back if they can do it.

Sit at home and wait for a phone call.

Go in, look at the car, sign the papers and drive home.

I had two trade-ins when I did my cars so my out-the-door price was lower by
how much I estimated a fair trade-in value for my used car was (using kbb.com
and edmunds.com and some common sense)

Overall the ease of the process was great with no BS and no haggling.

If you like haggling or your goal in buying a new car is to mentally _crush_
the sales agent, then you won't need this strategy... but if you hate wasting
your time and want to get a fair price, it works wonderfully.

~~~
ben1040
Last car I bought was a Scion, and they also have the no-haggle policy. One
night I was browsing dealerships' inventory online, and spotted a model I
liked. Called the dealer the next morning at 8, was driving my new car at 10.

The only part of the process that sucked was where the F&I guy put a serious
hard sell on me to try to get me to buy gap insurance and extended warranty.

Everything else went smoothly and the dealer even gave me a higher price for
the trade than I was expecting. Their Internet access was down when they were
trying to look up blue book price, and so the guy just made up an opening
offer that was $500 more than I was hoping to get.

~~~
rkalla
Didn't know Scion did the no-haggle thing, thanks for the heads up on that.
Also imagine the F&I hardsell is how they make up the difference... was the
sales agent you were working with responsive/nice/etc or did he seem impatient
and wanted to get the deal wrapped up quickly?

~~~
ben1040
The salesman seemed really nice and things went well with him. It was my
understanding that he mainly only sold Scion vehicles and he had drank their
koolaid in terms of how they wanted to sell the things. That is, "the price is
the price, and if that's what you want to pay then great, let's skip the games
and get you a new car."

The F&I guy however reminded me of exactly the classic skeeziness you expect
from a car dealership. Scion is just a sub-brand of Toyota and you buy at a
Toyota dealership, so once you get to that point in the deal you're working
with the same person you would if you bought a Camry instead.

~~~
rkalla
Very interesting; appreciate you sharing that.

------
dsrguru
I actually read this before. It's a fun read for anyone who finds the
psychology of persuasion and manipulation interesting. It probably helped me
save over a thousand dollars on my family's last car purchase. If you just
want the "what can I do to avoid getting cheated" summary, use one of the
following options:

1\. Have an agency buy your car for you. You might not save as much as you
could if you really knew what you're doing, but you won't get taken advantage
of this way.

2\. If you want to do it yourself, call dealerships up on the phone and
compare prices. You might have a lower chance of convincing them to sell you
the car than if you went in person, but you'll make sure you won't get ripped
off.

3\. If you really want to go to the dealer in person (I have used this option
successfully), do your research. That doesn't just mean knowing the MSRP and
the dealer's invoice cost (much lower than the MSRP), but also looking on
edmunds.com or elsewhere for the current promotions (called "dealer
incentives") that the manufacturer is giving the dealer. You might not be able
to find all of their incentives, but you can get close. When you're at the
dealer, don't let the salesman express prices in terms of monthly financing.
They'll use the four square technique and rip you off with 100% certainty.
First agree on a price and then you can talk financing with the F&I guys in
the back. To get the price you want, start really low. Offer a number around
the invoice cost and be willing to go barely more than $500 over (at least for
non-luxury cars). When they tell you that they won't make any profit that way,
you tell them about the dealer incentives you know about. If you still meet
with resistance, you can even hint that you suspect they have other incentives
you aren't even aware about and that you really will leave the store before
buying a car for much more than the invoice cost. If they still won't budge,
try again at a different dealership. If you have trouble with this method,
switch to #1 or #2.

~~~
wyclif
Regarding your last "if they still won't budge" and going to a different
dealership, that part can be your most powerful weapon: always be willing to
walk. Walking away is an important ingredient in any kind of negotiation, not
just car sales. Many times I've had the salesman call me later the same day
with a better price a lot closer to what I'm willing to pay, especially if you
visited the dealership at the end of the month.

~~~
GoodIntentions
>> "especially if you visited the dealership at the end of the month."

surprised no one else has mentioned that tidbit. If the dealership closes out
metrics at month-end, they'll be in a deal making frame of mind at that point.
++ if you can snag a salesperson that hasn't been doing well.

------
mikepmalai
Best tips I learned:

1\. Call / email for price quotes - The biggest dealers (due to much higher
volume/scale) tend to have no problem quoting you a price over the phone.
Those that can't compete on price, tend to tell you to come to the dealer for
a quote. If a dealer doesn't give you a price over the phone, ask them if they
would like a call back once you have a price quote in hand so they have an
opportunity to counter.

2\. Be flexible - Don't preemptively narrow down the inventory available to
you with specific features/colors. Get price quotes for the make/model you're
interested in first and then start asking about feature/color/service
differences, etc.

3\. Set a tight timeline - I'll usually call around in the morning and tell
dealers up front I'm going to buy this afternoon. I tend to get the most
competitive quotes this way and it gives the dealer an opportunity to quote a
price based on the inventory on hand rather than a general quote.

4\. Get counter offers - Once you have a set of price quotes, call the dealers
again and get counter offers for your best quote. Some big dealers are so
confident in their offer they'll encourage you to call around and see if
anyone can match it. You WANT dealers to start dropping out and saying they
can't meet that price. If everyone counters your lowest quote, that price
quote was too high.

I've learned that dealers usually know which competitor in their area offers
the best price...you just have to spend a little time wringing that out.

------
pkulak
The last time I bought a car I got to screw one dealer and made another
dealer's day. This was last year right after the Japanese tsunami when used
Priuses skyrocketed in value. In one week my model-one (with no cruise
control, which I HATED) shot up by about 6 grand, to a full 2 grand more than
I even paid on it. I decided right then to throw it on Craigslist at KBB, and
if someone wanted it for exactly KBB, it's theirs.

So, I immediately get like 5 calls and take the ad. The first guy to show up
says he owns an RV dealership, but he really just works at a used-car
dealership. They all sit on CL during their downtime looking for cars to buy.
The guy tried for about an hour to talk me down, but I had other people
literally lined up to buy for my asking price, so I wasn't going to budge a
penny. He finally bought for what I was asking, but wasn't too happy about it.
In fact, I'm not sure he even noticed that it didn't have cruise. That could
have ended up being tricky to sell..

But, the other end of that is that I then needed a new car. I was going to buy
a non-hybrid, but after calling a couple dealerships (at 8 in the morning, the
benefits of having a 2-year-old son) one had one new Prius on the lot from a
sale that had been backed out of the night before. So, I just went in and paid
sticker. I got way too much for my used car, probably paid way to much for the
new car, but on balance, I'd say I was even. Plus, I got a new car with cruise
control, so I was happy.

------
alan_cx
My best purchase:

Saw the car I wanted at £12,000. Went in to the dealer and test drove the car.
Liked the car and said I would buy. (I should add that my wife was with me,
and that she was fairly pregnant.)

Sat down to do the deal and as he was beginning to prepare the paperwork I
offered the sales man £10,000. I told him I only had £10k available and that I
had to buy a car today, and would £10k be acceptable?

Sales man went off to "ask his manager". He came back and offered £11,500.

I got up, smiled nicely and said, "OK, no problem, I realise I'm offering too
little but its all I have. A pity, but I'll have look else where as I only
have £10k, time is short and I will need to look elsewhere as I need a car
today. Thanks for your time". (Im sure I actually said that more concisely
than I just typed it!!) I was polite, respectful of his position but was
equally quite prepared to walk.

He jumped up and said he would ask his manager again. I sat back down and he
came back offering £11,250. I repeated the same lines (ish) as before. In
other words, I only have £10k and I had to seal a deal today... Off he went
again. This loop went on until he eventually offered £10,500. By this time, I
was kind of agitated because time was running out, and I didn't want to waste
time on a deal that might not happen. I was honestly keen to move on and try
else where. At that point I looked in my wallet and pulled out a £20 note, and
offered £10,020. He looked beat and accepted the £10k. He probably look as
beat as I looked surprised.

So, I had to go off and pick up £1000 for a deposit, and because my wife was
pregnant, she decided to stay in the comfy chair in the show room. Shortly
later, I came back with the deposit, and completed the deal.

Once we left, my wife told me what the sales man said while I was away. The
sales man turned to my wife and said, "Wow, I have never deal with such a hard
negotiator in my career. I've never given any one £2k off a sale, let alone on
a £12k car." To which my wife replied, "He wasn't negotiating, everything he
said was completely true. We do only have £10k, and we do have to by a car
today. He was not negotiating, that was the genuine position". Apparently, he
look relieved to know that.

What I learned:

I didn't really car want car I bought. Any car in its class was good enough. I
was not in "love" with a particular car.

I had a fixed budged that could not be increased. I do not do credit in any
way, ever.

One key bit I thought about much later on was that the car I wanted to buy was
not the same make as the dealer's franchise. It was a Peugeot dealer selling a
part exchanged Ford. However, the asking price was perfectly fair . As it
stood, £12k was a reasonable asking price.

The truth is, I was quite prepared to walk, in fact, I was on a hair trigger
to walk because I had only half a day left to do a deal.

You chaps might well have other things to add.

Anyway, my advice would be : Don't be in love with a particular car, have a
fixed budged, make the dealer know you are ready to buy, but equally be
prepared to walk. Lastly, try to find a car in a dealer which in not the same
make as that car you want. Find a VW in a Ford dealer, for example.

This was not a method, is was necessity. But now is is my method, and has
worked for me several times since, and not just with car buying. I have also
helped friends buy cars and done similar deals for them.

One last thing, sorry, I was after a second hand car, not a new one. Obviously
a key difference. Even so, my experience still might help others out buying.

Sorry for the long post!!!!

Edit: Jeez, that was long....

~~~
rdtsc
Here is what I learned.

You can do this only if you have a particular car + all configurations in mind
and won't budge. Dealers know this "trick" and what they do when you tell them
you only have $10k is that they sell you an $8k car for $10k. That's how it
works. So be careful. Pick the car first then say how much you only have.

Another problem I found is that if you want a particular car model and you
don't live a in a large metropolitan area you might only have 3 or 4 places to
choose from. They know it too. You walk away from all 3 or 4 places now you
have to drive 100 miles to another city perhaps.

Another nasty thing, car salesmen in an area, know each other. A lot of
dealerships are revolving doors and salesmen just rotate from one to another.
When you go to one and tell them the other dealership's price, they say "Oh
Joe, he is so silly, he used to work here, we can do better, we can give you
$100 less".

In the end of the day you also don't know how pressed they are to sell that
car. If there is a line at the door waiting to pay $1000 more for it. You'll
just have to walk away without a car.

One more thing. Car options. A lot dealerships will put "crap" on your car.
Nitrogen filled tires. Fancy decals. Anti-fairy-dust coatings. All that cost
maybe $50 dollars or so but tell you all those things cost $1000 more, but
they are "giving them away" for $500, and they put them standard on every car.
So the price they quoted you through email, doesn't exist because all cars
have these extra features. So don't fall into this one.

~~~
philjohn
Luckily having to drive 100 miles is less commonplace in a small country such
as the UK where you're rarely more than an hour from another major city
(discounting parts of Wales and the Scottish Highlands).

------
Spig
My best new car buying experience was using the methods described in the book
"Car Buyer's and Leaser's Negotiating Bible" by William Bragg. The book is out
of print but basically consisted of faxing/emailing dealerships within a
300-mile radius and asking for a quote on your chosen vehicle. Then, after
getting the lowest quote, inform the higher dealerships and they almost always
go lower. Repeat as needed.

[http://www.amazon.com/Buyers-Leasers-Negotiating-Bible-
Editi...](http://www.amazon.com/Buyers-Leasers-Negotiating-Bible-
Edition/dp/0375720677/ref=sr_1_1?ie=UTF8&qid=1333223472&sr=8-1)

------
vaksel
the key to get a good deal is to just use email..contact 30 dealerships and
ask whats the lowest they'd be willing to go on X.

then just go back and forth with the lowest #...until you are left with one
dealer

~~~
pkulak
Good God do they ever hate this. haha

~~~
vaksel
not really, most dealerships have an internet department with dedicated people
that deal with this.

and it's much easier to negotiate a price, where they just email you back,
instead of making you wait while they go and watch TV in the break room(while
they "talk" to their manager)

------
RollAHardSix
I've learned to never buy from a dealer. Finding someone selling a car that is
3-5 years old, decent mileage, and a decent price is by no means as difficult
as people believe.

Bought my first car, cash, for 5000 in 2006 (it was a 2000 Mazda Protege); ran
it until 2012 so that's 800-900 per year). Then I sold it for 2100, with it
having 160,000 miles on it.

I then bought a 1999, cutlass with 32,000 miles but a non-working radio for
2200. (radio got me a discount) Both vehicles retain value extremely well, the
cutlass for instance is still valued at 3300. I'm expecting to flip my cutlass
in no less than 6 but probably not more than 10 years for around 2000 dollars
again. Maybe 2200, maybe 1800.

You just have to know the value of your car, what you want, and how/when to
sell. Tip: Sell in Feb/March/April when many high-schools will be sending a
fresh batch of road-rage demons on the roads in the coming months. Parents and
poor people make the best bait. You can often 'see' where they will haggle
too. I posted an ad at 2200, knowing I'd get an offer of 2000, and then
negotiated the sale back up to 2100. Predictable.

~~~
sukuriant
Remember CarFAQs...

------
bannerts
One detail I have noticed in the car buying process is related to financing
the vehicle through the car manufacturers financing service. I am unaware of
exact rules at all locations but this is how it worked at one my friend
purchased a car on.

The dealership would offer a rebate only if you financed it through their
service. Anyhow, the rates they gave were horrible but like any loan you have
the ability to pay it off in the near future. Sometimes this can be used to
get a better price on the vehicle by making the dealership think they are
going to make a lot of money on the loan in the long run when in fact you are
actually just going to pay it off or refinance it in a few months (some deals
state that you can't refinance for like 2 months or something from my
understanding).

This process doesn't always work though because it involves more more people
dealing with your loan, of which each of them usually cost some small amount
of money.

------
ylem
I found TrueCar to be very useful in getting to know the price range of car
sales near me--in the end, I went with a local dealership--but knowing the
prices helped me a lot in my negotiations.

------
j45
Easily one of the most interesting reads I've had in a while.

Didn't give me as many hard insights on how to turn the tables on the shark
behaviour but definitely showed some places to stand your ground or push back.

The best tip seems to be what I've heard before: Negotiate only by phone.

------
usaar333
As much I'd love to read it myself, it's a tl;dr at 25,000+ words. Can anyone
summarize?

~~~
kabdib
The book _Don't Get Taken Every Time_ helped me a lot, buying my /second/ car.
I was a clueless geek buying my first, and got totally suckered.

I saw sales people as clueless and useless until I joined my first startup,
whereupon we /needed/ them. Our CEO hired a sales guy, all smarmy and slimy,
and that head sales guy hired a team (mostly old buddies he knew), and I saw a
real sales force in action. I swear they could have sold enterprise licenses
to a 'Notepad' clone, it was amazing. It didn't matter to them /what/ they
sold, they just sold.

~~~
creamyhorror
I'd like to hear a little how these pros operate, if you don't mind sparing
the time. It sounds quite fascinating.

~~~
larrys
Based on my many years on both sides the short answer is they tell buyers what
they want to hear (hit the hot buttons regardless of whether the product or
service can deliver) and they outright lie. (Really). Not that there aren't
honorable good salesmen (there are) but many do the same thing that guys do to
pick up women in bars.

------
sgonyea
Just use TrueCar and skip the salesman?

~~~
murrain
I used to be the Internet Sales Manager for a dealership in the bay area and I
can second that TrueCar is a powerful asset for the consumer.

When a dealership signs up with TrueCar they agree to give full access to
their sales database. Now TrueCar has access to every car you buy and sell,
new or used. They then aggregate this data to create their pricing
information.

