Buying A Car: Always Up The Ante

Over at the Get Rich Slowly blog, they have an excellent email from a reader illustrating the importance of never caving in to the high-pressure tactics of a car salesman.

If we were to distill the essence of the advice, it would be:

1) Constantly press for a lower price. Mark-ups on cars are huge. They can afford it.

2) If someone says to you “You need to sign now to get this price,” tell them you’ll sleep on it, then casually walk away.

3) Take your quote from one car dealership to another. Play car salesman against each other.

4) The same advice goes for trading in and old car towards a new one, except in reverse: always raise the ante. If the car salesmen really freeze up, you can always go to another, or reapproach them.

The full email is worth reading, since it’s essentially a parable of the wisdom of such advice. Go on over and check it out.

Reader Submission: Fritz Buys a New Car [Get Rich Slowly]


Edit Your Comment

  1. zentec says:

    The trick is to know what it is you’re buying and to keep saying the word no.

    You can’t negotiate if you don’t know anything about what it is you’re negotiating. The internet is a great tool for this; figure out what the car is worth and get a good estimate on what the dealer might have paid.

    I wrote this a long time ago on Motley Fool, and it’s all over the internet. But it still applies.

  2. Joe_Bagadonuts says:

    I used the spreadsheet and tips available at to great success when I bought a new Toyota Matrix back in January.

    Between using info there, doing all dealing/haggling over the web, and pre-arranging financing so I had a number they’d need to beat when I walked in (dealer financing couldn’t beat it), I ended up getting the car at about $1200 below invoice and on the financing terms I wanted.

  3. homerjay says:

    I’ve heard a bunch of times that people have gotten a better deal because they ‘paid cash.’

    First of all, who brings in a giant roll of 20’s to pay for a car? You pay by check. Secondly, Wouldn’t the dealer make MORE off you if you decided to finance through then and therefore be willing to come up with an even better deal?

    Or am I just lost….

  4. You’re partially right Homerjay. In fact, that is part of the cash back or low APR financing scam.

    Paying cash is not a huge advantage for the dealer, because as you said, they make more money on you through financing.

    NEVER disclose if you are going to pay cash or finance through the dealer when purchasing a car. The saleman will always ask you and you should only answer by saying, effectively, “We’ll cross that bridge when we come to it.”

    And yes, no one brings in rolls of $20’s and $100’s to buy a car…even if they did, the dealer has to report the transaction so there is no advantage to cash over a check. However, as in real estate closings, cash in this case, means no seller side financing.

  5. DeeJayQueue says:

    This is all well and good for people with good enough credit to be choosy about where to get a loan. What about us poor schmucks who have shit credit but still need to get to work? I have to take whatever someone gives me, should the finance gods be gracious enough to shine down on me with a loan.

  6. MonkeyMonk says:

    In my experience, walking out on a dealer is the one of the most important things you can do when buying a car. Unless you absolutely need the car that day, you can gain a lot of negotiating leverage by acting very interested and then leaving to “think about it.”

    Take the few days to check the price on the internet, check with other dealers, etc. and then go back ready to play hardball.

    Also, don’t take a higher finance rate than you really need. I took a 2-year, 0.9% rate on my last new car but the dealer kept pushing the 4-year, 3% rate because of the attractive lower monthly payments. Always look at the total out-of-pocket expenses for the life of the car payments.

  7. acutusnothus says:

    Way back in the 80’s a guy named Remar Sutton (former car salesman) wrote a book titled “Don’t Get Taken Every Time.” A few tips from his body of work to pass along:

    1. Wait until the end of the month–the last Saturday–to do your shopping. Reason: Dealerships don’t want to carry over inventory; don’t want to pay the bank again for the same car; and manufacturers are spiffing the dealerships pretty high dollars to move those cars. (manufacturers pay kickback incentives on models that escalate each week; by the end of the month, a dealership can make as much on a car from a manufacturer spiff as any sales profit)

    2. If at all possible, wait until the end of the model year; even higher spiffs from the manufacturers; no dealerhip wants last years models mixed in with the new stuff.

    3. Pray to whatever god you believe in for rain. Nobody shops in the rain; dealerships are desperate on rainy days and will deal even more. The car buyers holy grail trifecta is end of the model year, a saturday, and rain; have that and you;ll literally save thousands.

    4. Show no emotion. None. Nada. Zip. Favor no particular car; no car is unique; manufacturers make zillions just like the one you’re jonesing for. If this dealer won’t meet your price, walk.

    5. Carry a pencil, pad, Edmund’s print sheets, even a Consumer Reports and keep ’em in plain sight. this tells the salesman you’ve done your research and won’t be a creampuff.

    6. Absolutely, positively, do NOT commit to anything; do NOT sign anything; do NOT agree to anything other than you’ll walk if the salesman starts the run-to-the-manager’s-office dog-and-pony show; salesman are told each and every morning what they can sell their cars for; attempting power and control games is a waste of your time.

    7. Arrange your financing beforehand; buy a simple interest loan–preferably from a Credit Union–rather than an APR loan; never EVER buy a dealerships mula.

    8. And if you’re trading, make sure the two transactions are separate; they buy your car, you buy theirs. If you allow them to work your car into the deal, you’ll get screwed every single time.

  8. cebailey says:

    I wrote a lengthy article about the car-buying process that has been well received by other Gawker blogs:

  9. acutusnothus says:

    Oh, I failed to post a couple more tips:

    9. Always DEAL UP FROM INVOICE; 3% above invoice is a fair price. Do the same for accessories. AND never EVER buy anything the finance person is selling.

    10. If this all too much for you to bear, just use the internet to do your buying, but make sure in your communication that any variance from the accepted deal is not only a cause to walk, but a print-out of the “contract” and record of how the deal went sour will be submitted to the state attorney general’s office.

  10. KristiW says:

    My favorite tip is the walk-away thing. When I bought my last car, the salesman could tell I really liked it… which worked to my advantage, since he thought he was so close to a sale. I told him I was going to go to a restaurant nearby and have lunch and think about it (which was totally true, and make some phone calls) but he assumed I was going dealer-shopping. The mgr even called me and left me a message trying to get me to come back. After about an hour, I called back and said I did some further research and I would buy the car for $x price. If I came back, it was going to be that price or nothing. I got the car! :)

  11. homerjay says:

    I think the big question then is WHAT is reasonable? You can get ‘invoice’ pricing online but with all their incentives invoice doesn’t really mean invoice. What number do you give that would be reasonable?

  12. Triteon says:

    My tip on buying a car is this: don’t buy new. Unless you love depreciation there isn’t a real reason to buy new, as long as you’re willing to perform routine maintenance.

  13. trixare4kids says:

    I used the consumer checkbook service called “Car Bargains” a few years ago and ended up paying far, far less than I thought I was going to have to PLUS I didn’t do any work — just went down and paid for it. I don’t think I could have negotiated that price, no way. Worth evey dollar($190). Essentially you tell them what you want and they have dealers bid against each other for the sale. This doesn’t work with the most popular cars because everyone is willing to pay sticker.

    The bay area consumer checkbook is also a good thing if you happen to live in the San Francisco Bay Area.

  14. GenXCub says:

    DJQ, I have the so-called crap credit you speak of… I also have a credit union at my company. Perhaps you have a local CU that you’re eligible to use? If they can deduct stuff direct from your paycheck, and you’ve been employed awhile at the same place, it’s just like having good credit.

  15. alicetheowl says:

    All good reminders about why I’m going back to the Saturn dealership the next time I need a new car. I have nothing but good things to say about their sales and service, and there’s no bartering necessary.

  16. thrillhouse says:

    Such crap advice from get rich slowly. How about avoiding the dealer altogether? At least stay off of the new car lot.

    You wanna save some bucks on a car? Buy used. There is an endless supply of perfectly reliable 2-4 year old cars on the market. Let GRS take the butt kicking on the initial depreciation.

    And for Homerjay – the reason dealers like a cash buyer is the fact that the deal is a lock. No credit check, no “if the financing comes thru”, no bull. The last thing they want to do is spend a few hours selling a car to someone who can’t take it home if they wanted to.

  17. Daytonna says:

    As an FYI, any individual may use a credit union, you do not have to be an employee of company X, in order to use company X’ credit union. Part of Federal regulations for bank/C.U.’s are that they are equal oportunity lenders. Just like sellers/renters of homes.

    In my experience I have always gotten a superior deal at my credit union. Also my credit card APR through my C.U. is at a substantially lower rate then most banks I have seen, 12.9% for my generic card, and 8.9% for my wifes Platinum, with no anual fees for either.

  18. SexCpotatoes says:

    read up. Take friends with you to constantly talk you out of the deal, or at least pretend to.

    or do what I just did, buy a $400 beater, and fix what it needs. If you have any knowledge about cars or a trusted mechanic, you’re good. I just dropped a $600 transmission in it, total cost with shipping and professional shop install was $1400. The shop wanted $1700 just for a transmission (not including $500 installation), and would only guarantee it for 1 year 12000 miles, the cheaper (remanufactured) one from ebay came with 2 year, 24,000 mi warrantee.

    But this 400$ car came with new shocks and struts and brand new tires, a bulletproof 3.0 6cyl. engine, and 216,000 on the odometer.

    I get 30 MPG out of a 14 year old station wagon on the freeway, what do you get?