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January 07, 2010 - Image 47

Resource type:
The Detroit Jewish News, 2010-01-07

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You can avoid these
six "slippery" sales strategies.



Whether you are buying new or used, be aware of sales tactics that could

bait you into paying more than you should.

Even though the worst recession in
memory has been declared to be nearing
an end, the auto industry is still limp-
ing along, and most car dealers are still
in need of increased sales. It may be a
buyer's market, but that's no reason to
let your guard down in the showroom.
Experienced salespeople have one goal
in mind: to put you in a new car today.
And it's their job to get as much profit
out of every sale as possible.
While most car salespeople are
honest and forthright, says Howard
Krueger, a former car salesman, oth-
ers may be looking to take you for a
ride. So before you set foot on the lot,
be aware of sales tactics that could bait
you into paying hundreds or thousands
more than you should. Krueger, now an
Internet auto sales manager for USAA,
offers a few of the more common sales

• The Four Square

A salesman puts four numbers in front
of you: the new vehicle price, your
trade-in value, your down payment and
the monthly payment. He's looking for
your "hot button." When you focus on
one of the numbers (say you demand
more for your trade-in), he knows he
can hook you by meeting your terms
on that part of the deal. Problem is, the
other three numbers are already inflated
to favor the dealer.

down — this is the best deal we've given
anyone on this car." Don't bite. The
dealer's betting that the longer you sit,
the more anxious you'll be to reach an

• The Turnover House

Sometimes, the sales manager comes
to talk to you himself. Now that you're
talking to the boss, you'll know you're
getting the best possible deal. The truth
is, the "boss" is a professional closer,
brought in to win you over when the
first string can't. It's not uncommon to
go through three layers of salespeople
before you reach the dealer's true best

• The Sympathy Play

"Hey, I need to make a little money on
this deal, too," he says, citing the strug-
gling economy or, worse, four kids to
feed. It's only fair for the dealer to make
a reasonable profit, but don't be guilted
into paying too much. Rest assured the
dealer won't knowingly lose money just
to earn your business.

• The Now-Or-Never

"This deal is only good for today" or
"there's another buyer interested in this
car" — whatever the salesman's story,
some dealers rely on fear tactics to rush
you into a sale. You know better.

• The Free Extras

• The Waiting Game

"Let me go talk to my manager and see
what I can do," says the salesman. It's
a classic technique. After what seems
like ages, the salesman returns, osten-
sibly exhausted from negotiating on
your behalf "My boss is willing to come

To sweeten the pot, your salesperson
might throw in pin striping, rust proof-
ing or fabric protection at no extra cost.
But unbiased experts agree that these
add-ons aren't worth much, despite
what the dealer usually charges for

them. Your best bet is to ignore them.
Being street-smart about sly sales
techniques is one thing; sticking to
your guns and actually getting a good
deal is another. So how can you tilt the
odds back in your favor? The answer is
simple: research.
The Internet has helped level the
playing field for consumers. Thanks
to sites like Edmunds.com and mem-
ber-based resources such as USAAs
Car-Buying Service, you can enter the
dealership armed with more information
than the salesman himself.
Not only can you research your pre-
ferred vehicle and every available bell
and whistle, you also can find out the
dealer's invoice (the dealer's cost) and
uncover special incentives and rebates.
It's also smart to know the fair value
of your trade-in (visit Kelly Blue Book
at kbb.com), get a quote for insur-
ance on the new vehicle and get pre-
approved for auto financing. Lining up
these numbers in advance simplifies
your negotiation in the sales office. Still,
be sure to set aside plenty of time for
your visit to the dealership and avoid
distractions while you focus on getting
the best deal.
An even simpler approach to con-
sider is having the price negotiated for
you before you step foot on the car lot.
Taking advantage of car-buying pro-
grams that offer these special member
prices and services can save you time,
money and the hassles of negotiations.
With solid knowledge about what
you want and how much it should cost,
you'll know how to spot a good deal.
And all the slick salesmen in the world
won't be able to change your mind.

Car Lot Lingo

Deciphering the dialect of auto

dealers can help you negotiate a

lower price.

MSRP: Manufacturer's Suggested

Retail Price including destination

fees. You can usually pay less.

Does not include tax, title, license,

dealer processing or any other mis-

cellaneous fees.

Invoice: Often referred to as deal-

er cost, before rebates and incen-

tives. Includes destination charge,

optional equipment costs, dealer

holdback and advertising costs.

Customer Rebate: A manufac-

turer incentive usually in the form of

cash or lower interest rates.


Incentive: Extra money the

automaker pays the dealer for

selling certain cars. May be used

to increase advertising, lower the

prices and/or increase dealer's


Dealer Holdback: A bonus

amount (usually 2 to 3 percent of

MSRP) the manufacturer pays to

the dealer for meeting sales and

customer service goals, regard-

less of the actual sale price of the


Carryover Allowance: Another

manufacturer-to-dealer incentive to

clear out prior year models.

Courtesy .ARAcontent

JN platinum •

JANUARY 2010 •

P 1 7

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