Five Things You Should Never Tell a Car Salesman (Wealth Tip #29)

Author: Eric Peters,

Here are five things you should never tell the guy trying to sell you a car:

* How much you like the car …

Never show emotion; it’s the surest way to end up paying too much. It lets the seller know you really, really, really want that particular car and are probably not thinking clearly and are thus willing to overlook a lot of things – including very possibly the price – in order to make it yours Right Now. The smart policy is to feign indifference. The car’s ok. But you’re not all that attached to it – and don’t mind buying a different car on another day, if it means getting a better deal. Maybe from someone else.

If your will is weak – or you need moral support – bring a trusted friend to help keep you in line.

* How much you can afford to spend …

Keep that card close to your chest. Once the salesman knows your price point, he will try to steer you toward cars that cost about that much. But never less. On the other hand, if the dealer isn’t sure what you can afford or want to spend, he may be more inclined to show you some better deals. Act poor. Or at least, act cheap.

* How little you know about the car  …

Ignorance is rarely bliss. And one sure-fire way to encourage Salesdude Skullduggery is to let on that you don’t know much about cars, generally – or the car you’re looking at, specifically. Keep your mouth shut – and let the salesman talk. It’s also important that any questions you ask sound informed and intelligent. You don’t have to be a “car guy” to be able do that, either. But you do have to spend a little time researching the make/model vehicle you’re looking at (along with competitor models) so that you know enough about it (and them) to not sound like a Mark when you start talking with the salesman.

If you’re totally clueless about cars, bringing along a knowledgeable friend/spouse is a smart move. If you don’t have any such car-savvy friends/family members, consider a buying service. These handle the negotiation process for you – and while there is a fee involved, you’ll know what it is up front and it’ll probably be lower than what you could have achieved on your own through “haggling” with a sales shark.

* Never discuss the monthly payment …

Related to the point about not letting on how much you want to spend overall – but potentially even more damaging – is avoiding any discussion about the monthly payment. It’s very easy for a clever salesman to get an unsophisticated buyer to focus on that Low Low monthly payment – soft-pedaling the total purchase price (and interest) he’s about to saddle you with. For example, by extending a loan from three or four years to five or even six years, the monthly payment can be lowered by  a few bucks per month – but the actual purchase price may have been jacked up by thousands. You could be paying additional thousands in unnecessary interest payments, too. This is how the mathematically challenged end up “upside down” – owing more in payments than the vehicle is actually worth.

Negotiate the purchase price first – and the monthly payment will take care of itself.

* Say nothing about your trade-in plans …

A common mistake some buyers make is to arrive at the dealer with their old car – and get sucked into a discussion about its trade-in value before negotiating the price of the new car. It’s an old car salesman trick to make the buyer feel he has the edge by giving him what seems like a great deal on his trade – while making up the difference on the price of the new car.

If you plan to trade, it’s smart to avoid any discussion of what your plans are until after you’ve settled with the dealership on the sales price of the car you’re buying. Then bring up your trade.

Sneaky tip: Drive to the dealership in a vehicle other than the one you intend to trade. This way, the dealer has no clue about the potential value of your old car until later on – which makes it harder for them to manipulate you over the price of the car you’re trying to buy. Ideally, drive up in a middle-of-the-road, nothing-special older car. Not too old; definitely not too fancy. You want to convey the impression that you’re employed and solid – but neither rich nor poor.

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