March 24, 2007

Hi Tony,

Wow, what a great site you have! I'm thinking of buying new this year and you have very valuable advice. Although I have to admit I'm still a little bit confused about trading in.

I understand your advice regarding withholding info about a trade-in and instead focusing on negotiating the sale price for the new car, however in the time or two that I've bought a new car, they get you to sign/initial a final offer before they present it to the Sales Manager.

At that point, once you've signed this offer aren't you committed to anything? Or can you still introduce the trade-in after you've signed, the hands have been shaken, and you've agreed on a price for the new car? Are you still free to walk if you can't agree on a trade-in value that you feel is fair, and if so what is the significance of signing the offer (to my recollection it's nothing more than a blank piece of paper with the hand-written description of the car and a final price)?

Thanks in advance for this and thanks for the great site.

Dave

Answer:

Hi Dave,

First of all Dave, by having you sign an "offer" the dealer is trying to make you think you are committing to buying the vehicle for that price. More than likely they are going to come back at you and "bump" you on the price. It's all part of the game they play to lock you in.

My advice to you is to not play their game - make them play yours instead. They want to tie you up right away because they don't want you taking any time to think things through. They want you to make an emotional decision (one that you will more than likely regret later), because that's when you are most vulnerable.

Once you decide on the vehicle that you want to negotiate on, just tell the salesman to give you their bottom line on the price. This will most likely send the salesman into panic mode because his Sales Manager is telling him to get you to commit to a price. Don't do it! If they won't cooperate with you get up and leave. Tell them you are a serious buyer and you are going to buy a car somewhere within the next few days, but you will not be rushed or pushed into anything.

You must maintain control, otherwise they will take total control of the deal, and this is bad for you!

Tell them to just give you their best price on the car . . . period. In fact take that price and go to several different car dealers and play them against each other. Chances are one or more of them will "low ball" you, meaning they will give you a ridiculously low price to guarantee that you will come back to them. They know no other dealer can beat that price, because they can't even sell it at that!

Then when you go back in the "bumping" starts again. Once you have secured a realistic price on a car that you want then ask them to appraise your trade. You are going to receive wholesale value for it, so let them know that you are aware of that. Then see what they offer. Again you may want to shop your trade around or even consider selling it yourself.

This is the only way you can be sure you are getting the best price on the car you want. If someone gives you a price that you are happy with then just go with that. It's up to you.

The whole purpose of all of this is to turn the tables on the car dealer. Their standard plan is to beat you up on price and get you to make an emotional decision before you can think it through. You want to beat them up instead and to take your sweet time so you are sure you are making the right decision.

By playing car dealers against each other you can be sure you will get the lowest price. You also want to keep the price of the car, the trade and the financing separate from one another. If you don't they will jumble them all together, confuse the hell out of you and it will cost you dearly.

Don't sign a darn thing or give them any deposit until you are ready to buy, and the price and the trade is set. Do it any other way and you are playing right into their hands!

All my very best...

Tony Iorio