Car Buying: Secrets of A Reformed Car Salesman

Car Buying: Secrets of a Reformed Car Salesman
An Overview of What You’re About

to Learn …
First of all, thank you for making this purchase. And congratulations - You’ve just
taken an important step that most buyers fail to take. You’ve decided to educate
yourself about the buying process. This decision is going to save you a ton of
money in the next few days and weeks.
You’re about to learn the ins & outs of how the car buying process really works –
From someone who bought and sold cars professionally for 9 months.
I’ve seen customers just like you come in and get cars for an absolute steal –
Where even the dealership is surprised at how low they sold that car for.
I’ve also seen customers get ripped off for literally thousands of dollars – Which
would have been preventable, if they only knew how.
You’re about to learn exactly how you can save hundreds to thousands of dollars
in buying your vehicle. Specifically, here’s what you’ll learn in this book:
 How to Get a Killer Deal – You’ll learn things like how to position yourself
for dealership incentives, how to negotiate the lowest price, how to get
mass-distribution prices and much more.
 Shorten the Deal Time – Some deals can take hours and hours to get
finalized, while others take less than two hours from the moment you step
onto the lot. I’ll show you how you can take the all the difficulty out of the
deal and make the whole process fast and easy.
 Little-Known Money Saving Tips – Such as what time to buy your car, or
how to manipulate the car salesman’s commissions so he’s inclined to help
you rather than the dealership.
You’re going to learn all this and more. Without further ado, let’s get started with
an overview of the whole car buying process.
Stepping Into the Lot

In this chapter, you’ll learn what to expect from your experience when you
actually step foot into the lot.
You’ll learn about how salespeople meet and greet customers. You’ll learn the
do’s & don’ts of interacting with the salesperson on the lot, to ensure you get the
best service and lowest price possible.
First Impressions
Stepping foot onto a car lot can be intimidating. You already know that the
moment you step on the lot, you’re going to be sold to.
If you’ve done your homework you’ll be well prepared. For many buyers, just
stepping onto the lot can be nerve wrecking.
Within about 60 seconds of stepping foot on the lot, you’ll be approached by a
salesperson. Here’s what you can expect from the conversation.
Qualifying: Are You Ready to Buy Today?
Most salespeople will ask you at some point (sometimes right upfront,) “How
soon are you looking to own?”
Or, put more directly: “Are you ready to buy today?”
Salespeople generally consider anyone who isn’t ready to buy right now a waste
of their time.
This is because many customers say they’ll “be back” – but never actually come
back. So salespeople screen customers by asking them questions that test their
“buying temperature.”
If you say no to this question, the salesperson’s goal will often switch from trying
to sell you to trying to get you off their back without the manager noticing. They’ll
be unwilling to take you on a test drive and will often do their best to get you to
say “thank you” and leave without taking too much time.
The best answer to this question is yes – Even if you might have to think about it
today, let them know that you’re a serious buyer and that if everything works out,
you’re ready to buy.
Taking a Look at the Car
When you step foot on the lot, you either know what car you want or you’re
browsing.
Note: I highly, highly recommend already knowing what car you want or having a
very good idea of what car you want before you step foot on the lot. Salespeople
often have incentives to sell particular cars, and if you go to the lot looking for a
recommendation, the answers they give you may or may not be in your best
interest.
The salesperson will either show you the car you’re interested in or show you a
variety of cars that might interest you.
When you’ve chosen one you’re interested in, a good salesperson will now do
what’s called a walkaround.
This is when they walk around the car and show you all the features and benefits
on the vehicle.
Taking the Test Driving
There are two attitudes salespeople tend to take towards test drives:
1) Salespeople with more experience will tend to want to push you towards a
test drive. They know that customers who have driven the car start to take
emotional ownership of the car.
2) Salespeople with less experience tend to want to qualify before they take
you on a test drive. This is because their ability to close the deal is lower
and they want to see if you’re ready to buy before they take you on a test
drive, as taking a test drive takes more time than just getting a new
customer.
If you ask for a test drive, the salesperson will likely be more than happy to oblige
(as long as they don’t get the feeling that you’re “just browsing.”)
Some Things to Look Out for On the Car Lot
Salespeople have quite a few practices that might seem completely normal to the
outsider, but are carefully planned ways to extract the most money from
customers.
This happens before you even step foot into the negotiation booth. Here are a
few things to look out for in this part of the process.
Getting “Switched”
Here’s something you’ll often run into in the car purchase process. This is when
the salesperson tries to switch you from the car you want to a different model.
We called this switching the customer.
With new cars, they’ll often want to do this because they don’t have the exact car
you want. If you want an exact color, they’ll almost definitely try to switch you. If
you come in wanting a CR-V EX-L in red, they might try to switch you to an EX
(without leather) in red or an EX-L in blue for example.
This is usually driven just by inventory – They want to sell what they have on
hand.
They could do this by telling you the price is lower and that there’s a special, or
that the closest dealership that has that car is X miles away and that there’s an
extra charge to get the car. They might try and make it look like there’s a special
deal if you buy this particular car today.
The most common switch is from new cars to used cars. Salespeople make much,
much more money on selling used cars than new cars. Commissions from new
cars are rarely more than $200. Commissions on used cars can be anywhere from
$200 to $1,500.
The salesman might tell you things like “With a new car, the moment you drive off
the lot it’s worth 30% less. We have a preowned CR-V that’s just 2 years old with
very low mileage, you save $3,000 right off the bat.”
They can make it sound very appealing. The best thing you could do is decide
beforehand whether you want a new car or a used car. Decide for yourself –
When a salesperson suggests switching from the model you want to a different
model, usually it’s motivated by commission rather than your best interest.
Getting “Turned”
Another common tactic you’ll see on the lot. A salesperson can “turn” you to
another salesperson for 50% of his commission.
He might do this for a number of reasons:
1. He doesn’t feel that he can get you to buy.
2. He doesn’t think you’re a serious buyer.
3. He’s new and has been instructed to get experience by talking to
customers, but to turn everyone to more experienced sellers.
The salesperson who first introduces himself to the customer ‘owns’ the
commissions from that sale. If he doesn’t want to continue the sale, he might pass
you off to another salesperson.
In my opinion, this is perfectly fine if it’s done in a respectful manner. It happens
pretty often.
However, sometimes salespeople will pass you from salesperson to salesperson,
wasting your time and creating an unpleasant experience for you. If that’s
happening and you’re feeling frustrated with the service, just walk away.
Beware of Pre-Installed Accessories
Many of the cars on the lot will already have accessories pre-installed. Chrome
sidesteps, roof racks, etc. These are already added onto the MSRP price on the
price sticker – And they cannot be removed.
Salespeople will have you think that you have no choice but to buy the car with
those add-ons on them. That’s not true.
Just tell the salesman to find you another car without the add-ons, or go to
another dealership.
An add-on like Chrome Sidesteps can cost as much as $2,000 – There’s no reason
to pay that extra money simply because the dealership felt like sticking it on
beforehand.
Getting To the Negotiation Booth
Once the test drive is over, then the salesperson’s next goal is to sit you down
into the negotiation booth to try and get you to buy the car.
At this point, you have a few choices:
a) Decide you’re not ready to negotiate today. You leave.
b) Decide you want to get some numbers just to have an idea of what you’re
looking at.
c) Decide that you want to drive away with the car today, provided the price is
right.
Usually salespeople will just start walking towards the office once you get out of
the car from the test drive.
This is called the “assumptive close” – They just start walking and assume you’ll
follow them.
You can follow them into the office if you intend to buy if the price is right, or you
can just let them know if you’re not ready yet outside or inside.
The Negotiation Process

The goal of the car dealer is to make as much money off you as possible. Your
goal, naturally, is to save as much money as possible.
The negotiation process is an important phase in buying a car – A lot of buyers get
ripped off like no tomorrow during this process.
In this section of the book, you’ll learn exactly how the negotiation process works
from the dealer’s perspective – Including all the tricks and techniques they’ll try to
run on you.
You’ll also learn the ins and outs of saving money on your car.
Before we get into that, here’s a bit of “insider information” on how the
dealership works, so you’ll know what you’re talking about:
Who Actually Gives the O.K. for a Car Deal?
Many buyers make the mistake of thinking that the salesperson decides the deal.
Not so. Negotiating with the salesperson is almost completely useless.
This is especially true in the car lot. If a salesman promises you a price while
you’re test driving a car – Or if you ask “Hey, can I get this car for $22,000 out the
door?” and he says “Yes,” chances are he’s lying. Perhaps not intentionally, but
the salesperson doesn’t have the authority to make you that promise.
Chances are, he’s just saying that so he can get you into a car, get you to test
drive it and “fall in love” with the car before he tries to bump you to a higher
price.
Here’s how the structure of a dealership works:
The Salesperson:
The salesperson is your first contact. When you first walk into the lot, the
salesperson is the one who greets you.
He’s the one who will take you on a test drive. He’s your primary contact.
The Closer / Team Manager
A dealership generally splits their salespeople into teams. In a dealership with 20
salespeople, there might be 4 teams of 5.
Each team has a Team Manager, also known as “The Closer.”
The Closer’s job is both to manage the team and to close deals. More on this in
the negotiation process.
“The Desk”
A dealership might have anywhere between 3 and 6 managers. These managers
sit in a glass boxed room called “The Desk.” No joke.
The Desk is the decision maker. They are the ones that give the OK for the deal.
They’re also the ones to say no to a deal.
You are not negotiating with the salesperson. The salesperson is only the go-
between guy between you and “The Desk.”
You can’t negotiate directly with The Desk. If you ask for a manager, you’ll get the
Team Manager.
If you ask for the Team Manager’s manager, one of the managers from The Desk
might come out to talk to you. I’ve had several customers ask to talk to The Desk
(the decision makers) directly, in their office – The answer is always no.
The General Manager
The G.M. is the General Manager. He’s not involved with the deals.
The GM manages car sales, but he also manages car repairs, car parts, staff and all
operations at the dealership. In other words, although he’s the “big guy at the
top,” you usually won’t be dealing with him at all.
Now that we’ve covered the dealership’s structure, here’s what you can expect
when you begin the negotiation process:
The Four Square
When you walk into the negotiation room, they’ll pull out what’s called a “Four
Square Worksheet.”
It looks something like this:
The way negotiation works is that there are numbers filled out in each of these
squares, then the numbers are negotiated up and down.
Step One: Asking for Commitment
At this point, your salesperson will ask you a question that goes something like
this:
“Since you seemed to love the car, assuming the numbers work out, are
you ready to drive off with your new car today?”
The idea here is they want to get your commitment to buy. They don’t want you
to back out once you have a deal.
If you are ready, just say yes. There’s no harm – You actually can still change your
mind if you need to, though I think it’s bad form to lead the salesman on unless
you do intend to buy.
If you say no, you won’t get an honest price quote. Why? Because the dealership
knows you’re going to take their lowest price quote, go to the competition and
ask them to beat it. And they’ll always be happy to do so by $100 or $500.
In other words, they believe the moment they give you a real quote without
commitment to buy is the moment they lose you as a customer.
The salesman may say something like “Well, without your credit check and trade
in value I can’t give you a proper price … Just let me know when you’re ready and
I’ll be happy to give you all your prices & options.”
It doesn’t matter how nicely it’s phrased – The long and short of it is, until you’re
ready to buy, they won’t give you a real price quote.
The Two Numbers You Should Know Before Negotiating
The first number you should know is the invoice price of the car you’re
purchasing. If you have several cars in mind, then get the invoice of each car
before you step on the lot.
You can get the invoice price for any vehicle at Edmunds.com.
The second most important number you should know is the absolute maximum
you’re willing to pay, both on the purchase price and in the monthly payments.
One of the worst mistakes you could make is to start your negotiations at $300 a
month, when you can only afford $300 a month. Chances are the salesperson will
bump you – Say, to $350 a month.
Although that amount might seem small, it will put extra financial stress on you
for the next two to five years.
In other words, always aim to purchase a car that’s slightly below your means,
and have a maximum number that you can comfortably afford for your purchase
price, your down payment and your monthly payment. Be prepared to walk away
if the numbers don’t match what you’re looking for.
The #1 Mistake Customers Make in Negotiations
One of the worst mistakes you could possibly make in negotiating is to negotiate
anything other than the actual purchase price.
Customers who negotiate based on their monthly payment, their down payment
or even the out the door price get ripped off far more easily than any other
customers.
There are so many ways the dealership can disguise their real profit if you’re not
negotiating the purchase price. For example:
If you’re negotiating by your monthly payment and you tell him that you’ll
absolutely not pay more than $300 a month, the salesperson might come back
with something like:
“Congratulations! My manager agreed for you to drive off in your new car for
$300 a month – We just need to make it a 72 month loan instead of a 60 month
loan and the car is yours. Deal?”
Many buyers would agree to a deal like this, because their attention is on the
monthly amount, not the purchase amount. In reality, because the dealership
extended the loan by a year, they just added $1,200 to their profit.
And you’ll never know, because you’re not negotiating the purchase price.
The bottom line is never, ever negotiate anything but the purchase price. Once
the purchase price is decided, then negotiate your monthly payments and your
down payment. The purchase price is the key.
The First Pencil
The first offer the dealership gives is called the “first pencil” and is almost always
far too high.
Salesmen don’t actually expect anyone to pay this price – However, every once in
a while someone does.
They set the bar high so that even as they lower the price, the final price will be
higher. That’s the expectation anyway.
Trick Alert: The Nodding
Salespeople will often nod as they ask you a statement to try and put a “sense” of
affirmation, or yes, in the air.
For example, if you tell the salesman you don’t want more than $350 a month
after he came back with $450, he might say: “Great, so $450 doesn’t work for
you, but $400 is closer to what you want, right?” He asks why smiling and
nodding.
Just understand that this is part of what salespeople do – And be clear on what
your numbers really are.
Trick Alert: Specific Numbers
A salesman might go back the The Desk and come back with a pencil for $347 a
month.
That’s not $300 or $350 – That’s $347. In reality, the way these numbers are
derived at is pretty arbitrary. It’s whatever number the dealership thinks they can
get you to pay.
Ending a price in $231 instead of $230 makes it sound more official and more
credible. Again, just know that these numbers are an arbitrary negotiating
technique.
The “Up To?” Technique
This is a particularly subtle technique, but it’s so brutally effective almost

everyone falls for it.
You tell your salesman “I don’t want to pay more than $200 a month.” The
salesman responds with:
“You want to pay $200 a month … Up to?” *pause*
He looks at you expectantly. At this point, most customers balk. They’ll say: “Hmm
… Well, 200, up to maybe 230.”
They’ve just bumped you by 30 a month – That’s more than $1,000!
In short, if you have a price to stick to, when a salesperson asks you “up to?” just
say “No up to, I want to pay X dollars a month.”
The Rule of Three
Most deals happen the third time the salesman goes to the desk.
Say you come in, interested in a Honda Civic whose MSRP is $21,535.
You know MSRP is way more than you ever need to pay. You come in and offer
$19,000.
Now – Even if the dealership will make money by selling at $19,000, the
salesperson will come back telling you that you’re being unreasonable and that
there’s no way they can sell at $19,000.
That said, he’ll say that if you can come up halfway - $20,200 – Then you’ve got a
deal. He may even reframe it as “Just a $40/month difference – And your down
payment is the same today.”
Some buyers will take it. Others might say no – But $19,500 is O.K.
You’ll go back and forth between the desk until a deal is arrived. The deal
generally happens at the third go between. Meaning negotiations end on the
third deal.
The Trade In
Having a trade in is a great way to get ripped off by the dealership.

A dealership will almost always, always, always give you a price that’s significantly
less than what your trade in is really worth.
Here’s how it works: The salesperson does what’s called a “walkaround,” or a
comprehensive check of your car, looking for every little flaw they can find in your
car.
They then come back and tell you: “Well, a car like this might normally be worth
$4,000 – But because all 4 hubcaps are scratched, the transmission is 3 years old
and needs to be replaced soon, the breaks are squeaky … … [etc] We can really
only give you $2,300 for the car.”
The salesperson will try his best to make it sound completely logical that your car
is only worth $2,300 (or whatever the amount is.)
But in reality, the Kelly Blue Book price listings depend on the condition of the
vehicle – It takes into account small scratches, dents, minor mechanical issues, etc
that come with a used car.
In other words, salesmen are taking money out of already depreciated values.
If your car is actually worth $4,000 and they only give you $2,300, that’s an extra
$1,700 they’re earning on the deal.
This $1,700 can be used in two ways:
1) To give you the illusion that you’re getting a really good deal. For example,
the salesman could give you the car for $1,000 less than what most are
paying for – Yet he’d still be making from you $700, because he got your
trade in so low.
2) Or, the money could just go towards profits and commissions.

Here’s the real kicker: If your car is worth $4,000, they say it’s only worth $2,300 –
In a couple weeks, that car will be on the lot for $6,500.
There’s not a whole lot of advice I can give you in this department. A car
dealership will not give you a good deal on your trade in, period. They’ll almost
never give you KBB value.
My best advice is to sell your car yourself. It comes down to convenience versus
money saved. If you’d rather just trade it in at a dealership, then you won’t have
to go through the hassle of selling your car. You will lose a significant bit of money
though.
You could sell your car yourself on Craigslist at KBB value. It takes a little bit of
time and energy, but it may be worth it for you. I’d estimate selling your own car
takes 10-20 hours; depending on the car you’ll probably save yourself $1,000 to
$5,000.
If you’re a doctor or lawyer making 200K a year, then it may not be worth the
hassle for you. For most people, selling the car on their own is well worth the
money.
You could also take it into a used car lot and get a quote before you sell it
yourself. Or you could just sell it to a used car lot. You won’t get much more than
you’d get at the dealership, but at least your trade in can’t be used to create the
illusion of a good deal in your new car.
The trade in is often where the dealership makes most of their profit on the deal.
It’s also where you can lose the most money on a deal if you’re uninformed.
Trick Alert: “What Did We Get Those at Auction For?”
Here’s a trick that salespeople can use to create the illusion that your trade in is
worth less than it really is.
Let’s say you have a 1992 Mitsubishi Eclipse. A salesman might at this point pick
up the phone and ask the used car manager:
“Hey, what did the last few Eclipses sell for at auction?”
Then he’ll write down … $2,578, $3,275, $1,789
Now, if your trade in is really worth $4,500 – After hearing what they went for at
auction, they’re counting on that having you lower the number you think your car
is worth.
In reality, auction prices and open market prices are completely different. A car
that might sell for $4,500 to an end user might only go for $2,000 at auction. This
is not a reflection of your car’s value.
Getting the Salesman on Your Side
The salesperson will always position themselves as “your buddy.” On your side,
trying to get you a good deal.
However, when they have their personal commission checks on the line, they’re
unfortunately not usually looking out for your best interest – They’re looking out
for their own.
There are two ways a car salesperson gets paid:
1. A deal that doesn’t result in enough profit gives them a minimum

commission. This is usually between $100 and $200 per car. At my
dealership it was $150. This is called a “mini,” short for “minimum
commission.”
2. If the profit is high enough, they get paid a percentage of the amount you
pay above invoice.
So at my dealership, commission was 20%. For example:
Example: Invoice is $16,000. If the car goes for $16,750 or below, the salesman
makes a “mini.” Anything $16,750 and above is profit for both the dealership and
the salesperson.
With a used car the salesperson almost always gets paid more than a mini. The
margins on a used car are very high; meaning the salesman gets a nice
commission.
On a used car, it’s hard to be sure the salesperson is on your side, because there’s
so much profit to be made.
On a new car, once you get near the invoice price (within about $1,000,) the
salesperson knows they’re getting a minimum commission. You can let them
know that you know and that you’re both on the same side.
You both want the deal to go through – You want to get a good deal and the
saleperson wants to make their minimum commission. Ask them to help you get a
good deal, since it’s not going to change their commissions anyway.
Getting Passed Around – It Happens
If the salesperson can’t close the deal, you’re likely going to get passed to
someone else. It’s considered bad etiquette in car sales to let a customer go
without letting another salesman have a shot.
If he can’t make a deal happen, you’ll likely be passed to another salesperson. The
salesmen split the commission if a deal is made.
Don’t take it personally – They’re just trying to make a deal. But if someone else
takes over for your salesman, that’s what happened.
What to Do When They Get

“The Closer”
The “Closer” is the team leader of the salesperson who you’re talking to. As the
name suggests, their job is to close deals for the salesman.
First of all, realize this is normal: For new salesman, every deal they’re required to
have the closer talk to the customer instead of closing the deal themselves. It’s
training, in a way.
For more experienced salespeople, if they can’t close the deal themselves they’re
also required to get the Closer.
Now, there are a variety of ways Closers can approach the deal. There is of course
the “high pressure” Closer that none of us want to deal with. There are closers
who’re actually quite fun to deal with – They’ll laugh the customer into a sale.
Some try to scare customers into buying. Some befriend them into buying. Some
pressure them into buying. Some cojule them into buying.
There’s a wide range of people who could be a closer. But the basic strategy is still
the same: Know your numbers. Know the invoice price, know your credit score,
know what kind of loan you qualify for and know what’s the absolute most you’re
willing to pay.
A Note on “Out the Door” Price
The “Out the Door” price is the final price – The price you have to pay to drive the
car out the door. It includes your purchase price, the taxes, the license fees, the
documentation fees and anything else. It’s the “Once everything’s included, what
do I need to write you a check for” price
It’s important to know what out OTD price is – Don’t get surprised by the taxes &
licensing fees. Generally these come out to about 10%. If your car is $20,000 then
taxes and licensing fees are around $2,000.
It’s important to know the numbers, but I don’t recommend negotiating based on
OTD prices. Negotiate your purchase price as low as you can get it – The OTD price
will take care of itself.
How to Price Shop
If you get a price quote from a dealership, always get it in writing or printed out. If
you get an internet quote, print out the screenshot that has the quote on it.
If you went to another dealership, get a photo copy of the four square worksheet
they used to negotiate your price.
The dealership is much more likely to say they’ll beat a price when you have it in
writing. If you walk in and say “The other dealership quoted $19,000” with no
written proof, they’ll likely see it as a negotiating tactic. If you have printed proof,
they’ll take it seriously.
More often than not the dealership will match any price quote you bring to them.
Moving On …
These are the absolute basics of how negotiating a car works.

In the next chapter, I’m going to teach you how to skip as much of this process as
you can. It’s still important to understand how negotiation works as there will be
a little bit of negotiation, but what you’ll learn in the next chapter is going to save
you a lot of time and money.
Let’s get started …
How to Skip the Negotiation Process

That whole process of negation can be skipped. You can get a pretty darn good
deal, without having to spend hours going back and forth about price. Here’s how.
The Only “Salesperson” Who Can Give
You a Straight Answer
Most salespeople aren’t authorized to give you a straight answer about the price.
They have to get your price offer, get it to the manager and either get an approval
or get a counter offer.
However, there’s a special group of salespeople who can give you this price offer.
In fact, they can give you a price offer without checking in with management –
And give you a pretty good deal.
This group is called the Fleet Department or the Internet Department.
What is the Fleet Department?
The Fleet Managers (they’re generally called managers, even though they’re
really salespeople) are salespeople whose job it is to …
1) Sell cars en mass. If you own a catering business and want to buy 10
minivans, the Fleet Manager is the guy you’d talk to to get a bulk order
price on your vehicles.
2) The Fleet Manager is also the person who processes internet orders. They
issue price quotes to people who requested them online, then sell cars to
those people.
In other words, the Fleet Manager is paid to sell cars by large volume rather than
trying to get a high commission on each car.
What most people don’t realize is that Fleet Managers can sell cars both
individually and in bulk – And you don’t have to go through the tedious process of
placing an internet order in order to work with them.
Why Work With the Fleet Department?
There are many reasons to deal directly with Fleet Managers rather than
salespeople:
 Better Service. Most fleet managers have been around the dealership for at
least a year – They know how to provide good customer service.
 They sell more cars – Which is actually a good thing for you. The high
pressure salespeople tend to be salespeople who have a hard time making
sales (wonder why?) Salespeople who aren’t desperate to make a sale are
much more pleasant to deal with.
 They can quote you a price right upfront and stick to their offer. Usually the
price quotes will be made in $X Dollars Above Invoice. For example, “This
Accord is $450 over invoice, the Civic Coupe is $300 over invoice.” These
are decent deals, you can negotiate a little but not a lot.
 The process is faster. You get a price quote, you agree on price, you come
into the dealership to sign the paperwork. There’s no tedius negotiation, no
closer, no need to go through all the hassle you’d normally need to go
through.
Now you know why you’d what to deal with Fleet instead of sales. Here’s how to
contact Fleet.
How to Order from the Fleet Department
Give the receptionist a call and ask to speak with a Fleet or Internet Manager. Tell
them you want to buy a car directly from them, that you’re ready to buy. You
want to know what the best price they can give you is.
This is the part that requires the most finesse. There are several ways you can go
about asking for the price:
1) The most aggressive method is to ask them to get as close to Triple Net as
possible. Triple Net is the dealerships actual cost on the vehicle – Invoice
price minus factory rebates minus kickbacks.
In other words, this is their true cost, which is lower than invoice.
If I were buying a car, I’d tell them I used to sell cars and want to buy as
close to triple net as possible.
I’d first ask for triple net. Their counter offer would probably be $500 to
$1,000 over Triple Net. We’d negotiate from there.
2) Most Fleet / Internet Managers negotiate invoice up. So they might quote
you $300 or $500 over invoice. This is pretty simple – You just say yes, you
come in and get the car. Very little negotiating is necessary. In my opinion,
$100 - $500 over invoice is still a pretty good deal.
3) Price shopping by phone. If you call the internet departments of several

dealerships, you can often say “X Dealership offered me $21,300 – They
said its $400 over invoice. If you can beat the price, I’ll buy from you. Can
you do that?” they’ll often be more than happy to beat it by at least $100.
Note on Car Demand: Getting killer deals generally works only on “regular” cars.
In other words, new model releases often have a “hard limit” on how low they’ll
go. For example, when the new Honda CR-V came out, it generally wouldn’t go for
anything less than $1,000 over invoice – The dealership would sooner run out of
cars to sell than customers who want to buy it.
If you’re buying a new, hot car on the market, be prepared to pay more if that’s
the car you absolutely want. Or, wait for the market to stabilize before buying the
car.
Make sure the car is actually in demand and that it’s not just a sales tactic the
salesman is trying to use to create a sense of urgency and value.
How This Process Works
Once you’ve called the Fleet Manager and arranged a price, then come into the
dealership and test drive the car.
If everything is in order, then you’ll fill out the credit application, get the final
monthly figures and go to F&I for paperwork.
Be aware that things can still come up even if the price is pre-negotiated: The
interest rate could be off, your monthly payments could be off, or they may offer
a price too low for your trade in.
That said, dealing with the internet manager still gives you a significant advantage
over dealing with a “normal” salesperson. You’ll definitely get a better deal and
you’ll save a lot of time.
If you call the Fleet Manager, make sure you make an appointment and only talk
to him and not any other salesperson. If you talk to another salesperson
somewhere in the process, they might be entitled to half the commission – In
other words, the guy you work with will do all the work but only get half his
paycheck.
Now, once you’ve negotiated the deal – Whether through Fleet or through Sales –
Once everything is in order, then it’s time to go to sign the paperwork.
Let’s get into the F&I Process …
Finance and Insurance

Once you’ve agreed to the final price, you’re done right? Not quite …
The final step of the process is the Business Office or the Finance and Insurance
(F&I) office. This is where you’ll sign all the final paperwork necessary to take
ownership of your new car.
The paperwork process itself is pretty straightforward. The F&I manager will have
you sign the purchase contract, the loan agreements and any other paperwork
that’s necessary. While you should read every word of the contracts, this part is
pretty much auto-pilot.
But beware – The F&I office is not just about paperwork. This is another
opportunity for them to sell you a bunch of products.
The F&I manager’s real job is to sell you on their accessories and other products.
Car alarms, fabric protection, gap insurance and more – Their job is to make it
sound like you really need what they’re selling.
In reality, most of these are just a waste of money. Here’s my (personal) opinion
on the products that are sold in F&I.
F&I Products Reviewed
Paint Protection
Don’t buy paint protection. Paint Protection is really just an overpriced wax job.
If you really want it, get it somewhere else.
Rust Protection, Fabric Protection and VIN Etching
Pretty much the same as above. Overpriced, unnecessary, get it somewhere else
if you really want it.
LoJack
Don’t purchase LoJack unless your car is truly irreplaceable. It’s much better to
just have insurance on your car.
That said, if you really want LoJack, it’s also much cheaper to get it elsewhere.
Gap Insurance
Gap Insurance is basically an insurance that makes sure you don’t go upside down
on your car. If your car is worth $20,000 on purchase, in a few months it’s worth
$16,000 and you still owe $19,000 – What happens if you crash your car?
Gap insurance will cover that gap. This is optional (I actually recommend it) with a
straight up car purchase, but if you’re leasing you should absolutely get gap
insurance. If you’re buying with low to no money down, you should also get gap
insurance.
Even with comprehensive collision coverage, the amount auto insurance
companies pay you is based on current market value. If you buy a new car at
$25,000, in 3-6 months it’s “market value” would drop 20% to 30% right off the
bat. Let’s say it’s $5,000 – If you don’t have Gap insurance, you’ll have to come up
with this $5,000 out of your own pocket.
If you have gap insurance, it’s covered.
I recommend checking with your insurance company to see how much Gap
insurance would cost before getting it from your dealership. Both will offer Gap,
one will be cheaper.
Extended Warranty
This is a tricky one with a lot of factors.
First off, you can buy extended warranty at places other than the dealership. And
you can bet it’ll be cheaper. That said, it is much more convenient to just get it at
the dealership.
The markup on extended warranty is generally around 100%, sometimes higher.
Let me say that again: The markup on extended warranty is often 100%,
sometimes higher.
If they’re selling you extended warranty at $1,500 (or “only $30 a month”) you
can bet their invoice on it is less than $900, perhaps as low as $700.
When you step into the F&I office, they’re going to position the warranty in a way
that makes it sound irresistible. It might sound something like this:
“As you know, Hondas are very well known for having high quality
cars. That’s why things don’t go wrong for many years.
However, even with Hondas, electrical equipment like sunroofs can
and do break – And can cost as much as $3,000 in cash to repair.
I’m sure you don’t want that, and I’m sure you don’t want to be
driving around a car with a broken piece of equipment either. For just
$30 a month, you can make sure that doesn’t happen.”
Here’s the thing with Extended Warranty. Most people buy a new car every 3
years, maximum 5 years. If you don’t plan on keeping your car for more than 3-5
years, extended warranty is almost definitely not worth it. The standard warranty
is more than sufficient.
The standard bumper to bumper sticker covers 3 years or 36,000 miles – In other
words, one thousand miles a month or 3 years, whichever comes first.
The power train is covered for five years, 75,000 miles. The power train is
everything that makes the car move. In other words, the most important parts of
the car are already covered for 5 years.
In short, unless you plan on buying the car and not trading it in for 7 to 10 years,
then don’t buy the extended warranty.
Decide before you step onto the lot whether you want to buy extended warranty
or not. Don’t let the salesman talk you into buying it if you didn’t already decide
you want to.
That said, if you really want to buy the warranty at the dealership, make sure that
you negotiate. The price they give you isn’t set in stone – If they present you with
a $1,500 warranty, they could easily sell it at $1,000 and still make a profit.
Alarm System
The alarm system is as it sounds: An alarm system. It actives on impact or if
someone tries to open the car.
The alarm system is moderately overpriced (by perhaps $200,) but getting it at
the dealership is usually worth the convenience.
The alarm system and the extended warranty are the dealership’s #1 best sellers.
Again, I recommend deciding beforehand whether or not you want to buy these
add-ons, instead of buying them at the dealership when your decision can be
influenced by the salesperson.
Warning: Beware of the “Package Selling” Technique
One common method of getting customers to buy add-ons is to simply package

everything into 3 different packages. For example, the F&I manager might present
the options in this way:
Platinum – The Platinum option includes Extended Warranty, Gap Insurance,
Alarm, VIN Etching and Rust Protection. This option is just $60 a month.
Gold – The gold option includes Extended Warranty, Alarm and Gap Insurance.
This option is $40 a month.
Silver – The silver option includes Extended Warranty and alarm and is just $25 a
month.
The F&I manager will then ask you “Which option would you like?”
The correct answer is usually “none” – But most customers don’t realize that’s an
option and will pick one of the three.
None of the options sold in F&I are ever required purchase.
Scam Alert:
You Do Not Need Extended Warranty to Qualify for Your Loan!
If you have less than impeccable credit, one somewhat common scam F&I people
will try to use is to say that in order to qualify for the financing you want, you
have to get extended warranty.
There is no such requirement in any financing deal. This is nothing more than a
sales ploy to try and pressure you into buying extended warranty.
In other words, this is just a flat out lie that F&I salesmen use to try and force
customers into getting extended warranty.
Tip: Everything is Negotiable
In the F&I office, they’ll make the prices sound very official – As if everything has a
set price.
The reality is that it doesn’t. They pay a certain amount for the products they sell.
Everything above what they paid is profit.
Even if you pay less than their initial offer, they can still make decent money. If
you choose to buy anything in F&I, make sure you negotiate and don’t just take
the number offered in the beginning.
The Delivery Process

This part of the process is pretty self explanatory – There’s not a lot you need to
look out for.
Free Gas & Detail is Standard
Almost all dealerships will give you a free tank of gas and detail your car. (Detail
meaning wipe down all the windows, clean the car inside and out including
hubcaps.)
Sometimes salespeople will try and phrase this as if it were a bonus they’re
throwing in – It’s really just part of the standard procedure.
The Walkaround
Once you’ve signed the paperwork and gotten your car detailed, the final step is
for the salesman to show you around your new car.
He’ll show you all the features of your car and how to use them. How to set your
alarm, how to use the air conditioner, etc.
If you have any questions about your car, now is the time to ask them.
After the walkaround, they’ll hand you your new keys and you’re ready to drive
off!
Note: The moment you sign the contract and drive your car off the lot, the deal is
irreversible. Even in California, the “3 day law” really isn’t enforceable just
because you change your mind. In other words, no matter what any salesperson
tells you, there is no such thing as a refund policy on a car. Make sure everything’s
right before you drive off.
The Best Times to Buy a Car

When you buy a car can make a significant difference on what you pay. Here’s
why:
Understanding Dealership Incentives
A dealership might have an incentive to sell, say, 500 cars in a month. If they sell
500 cars in a month, they’re allotted more new cars (of rare models) in the next
months’ shipments.
They might also receive kickback incentives. In other words, if they sell more cars
they get paid more.
This bonus is passed to the managers and to the salespeople. In other words, a
salesperson and the manager may have a goal of selling a certain amount of cars
in a week.
This is particularly true on weekends. On a Saturday for example, a dealership
might set a goal of selling 30 cars in a day. The top salesman of the day will
receive a $500 bonus; top team gets a $1,000 bonus, etc.
When there are cash incentives from the manufacturer / dealership to sell cars,
they’re much more likely to sell you a car for a lower price!
Here’s how to take advantage of this.
When to Buy Your Car
Buy Your Car on a Weekend – Most incentives happen on the weekends.

Dealerships know the weekends are the busiest times and therefore throw down
a lot of incentives for salesmen & managers to sell cars on weekends.
Buy Your Car Towards the End of the Month – For the same reasons, if the
dealership is trying to hit a monthly goal, you’ll want to come in towards the end
of the month to take advantage of them “scrambling” to sell cars to hit their
goals.
Come Towards the End of the Day – Around 4:00PM. At this point they will have
sold some cars, probably not enough to hit their goals. They’ll feel incentive to sell
the car for less at this point.
Even if the dealership has hit their goals, they’ll still want to let cars go at less if
there’s the feeling of high pressure – If they’ve already sold 30 cars in a day,
they’ll still want to sell more to go for a feeling of achievement. “Hey, we’ve
already sold 30 cars today – Lets see if we can sell 40.”
More Insider Tips & Secrets

Who to Complain to If You Something Goes Wrong
They quote you a price over the phone and refuse to honor it. You catch your
salesman in a lie. You’re passed around one too many times. Any number of
things could go wrong during the car purchase – And you have every right to
complain.
Most people just don’t know how. See, if you ask your salesperson to talk to their
manager, they could do any number of things. For one, they might just say no.
They may just get another salesperson to pretend they’re the manager.
Or, most likely, they’ll get their team manager to come and talk to you. The team
manager has no authority to make it up to you financially, only by saying sorry.
Even if you get a desk manager to come talk to you, there’s not a lot they can do
in terms of making it up to you.
The person you should ask for is the General Manager – And you should ask the
receptionist to talk to the G.M., not your salesperson. The receptionist’s job is to
page the person who’s being asked for – So ask for the G.M.
If the G.M. isn’t in the office when you’re there, then ask for one of the managers
at the desk. However, the difference in authority is pretty big – Dealing with the
G.M. is dealing with the boss. Dealing with anyone else is not dealing with the
boss.
The G.M. can make up any mistake to you financially. If you feel like it’s justified,
ask the boss for a “Triple Net” deal – Basically a deal where the dealership makes
no money.
Never Add Leather!
One of the worst things you could do is add leather to a car without leather seats.
If they don’t have the leather version of the car you’re looking for, salespeople
will sometimes try and recommend that you just add the leather.
No!
Go find another car, one that already has leather. There are a whole lot more
features, the price is lower and the chances of something going wrong are lower.
Never, ever add leather to a car that doesn’t have leather – Just find one that
does.
Frequently Asked Questions

Q: Should I pay in cash or get a loan? Should I get a loan beforehand?
If you have your own loan or plan on paying in cash, wait until after negotiating to
let them know. They’ll sometimes give you a lower price on your purchase price if
they think they can make money off you from the financing.
Getting a loan beforehand or not is your choice. It doesn’t make that much of a
difference. I recommend getting a letter of pre-approval, then going to the
dealership and seeing if they have better interest rates.
That way, if their interest rates are worst than what you can get on your own, you
can simply use your own loan. If their interest rates are better, then you can use
theirs.
Q: They said they have to do a credit check – Is this true?
Yes.
Every deal requires a credit check to be finalized. Even if you pay in cash, you still
have to run a credit check.
Q: Can This Damage My Credit?
Yes.
If you shop around at several dealerships and get different price quotes and
different monthly payments at each dealership, each one having run your credit,
that can and will damage your credit rating.
Each time your credit report is pulled, it affects your credit rating.
The best way to go about this is to pull your credit report only when you’re ready
to make your purchase. So your credit report is only pulled once throughout the
buying process.
Calling a Car Dealership

You might want to call a dealership to check if they have a car, a color or can
match a price first before coming into the dealership.
Here are a few tips for dealing with a salesperson on the phone, before you’ve
met him in person.
Asking for a Price
If you ask for a price on the phone, they may or may not give you a quote.
Chances are, this is the salesperson making up a number as opposed to a real deal
that’s put on the table by management.
When a customer calls, the salesperson’s #1 job is to get you through the door.
Often times salespeople will promise a price that they’re unsure whether they can
deliver on or not – Just to get you to come in.
If you ask them if they can match the price that another dealership gave you, and
they say yes, that may often be true.
Asking for a Color or Car
If you call and ask if they have a “Red Honda Civic EX,” the salesperson may say
they do – When in reality they don’t.
They may have the car in a different color, or they may not have the car at all.
Again, the salesman may just say yes to try and get you through the door.
Often times what the salesman would do instead is have you test drive say a red
car instead, and if you’re a go on the deal he’ll then go and get the red car from
another dealership.
Deal With Fleet
Again, I recommend going directly to the Fleet Managers. These are the people
who are ready and willing to deal straight with you, to negotiate quickly and have
you drive off the lot quickly.
You’re much more likely to get a straight answer from Fleet than an attempt to
get you into the dealership without actually answering your questions.
A Review
Now you’ve learned …
How to Research & Prepare for the Car Buying Process. You’ve learned how to
research invoice prices and compare prices between dealerships. You’ve learned
how to come up with your budget before you step onto the lot.
What to Expect When You Step Onto the Lot. You’ve what the best way to deal
with the salesman is. You’ve learned how to handle questions like “Are you
looking to buy today” and “Would you like to take a test drive?”
How to Negotiate a Killer Deal. You’ve learned all the common pitfalls car buyers
make and how to avoid them. You’ve learned how to get a great deal on your car,
even if you negotiated the “normal” way.
How to Buy from Fleet & Save Big. You’ve learned how to directly contact and
negotiate with the Fleet Department to get a killer deal in record time. You’ll skip
the tedious negotiation process and buy directly from the guy who has the
authority to give you a deal.
The Do’s & Don’ts of F&I. One of the biggest areas where consumers mess up is
when they let their guard down in F&I and get taken as a result. That’s not going
to happen with you – You’ve learned how F&I really works “behind the scenes,”
how they’ll try and sell you extra products and which products are worth their salt
(and which ones you should avoid.)
Plus … You’ve also learned a handful of tips & tactics that will put you hand over
fist ahead miles ahead of the average buyer. You’ve learned what the most
common dealership “scams” are and how to avoid them. You’ve learned how to
get the exact car in the exact color you want and a lot more.
Finishing Up
Congratulations again on purchasing this book. We’ve covered a lot of ground and
hopefully at this point you know exactly what you need to know to get the car you
want at a great price.
Once you make your purchase, I would love to hear from you. Please send me an
email at Derek@CarBuyingExposed.com. Any feedback about this book would be
greatly appreciated.
Specifically, let me know what helped you the most and what you’d like to have
more coverage around. Let me know how your deal went and how this book
impacted the way you approached the deal.
Thank you again for your purchase. If you have any questions, don’t hesitate to
contact me.
Kind regards and best of luck with your new car,
- Derek Young

Car Buying: Secrets of A Reformed Car Salesman

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Car Buying: Secrets of a Reformed Car Salesman

Car Buying: Secrets of a Reformed Car Salesman

An Overview of What You’re About

Stepping Into the Lot

Qualifying: Are You Ready to Buy Today?

Some Things to Look Out for On the Car Lot

Beware of Pre-Installed Accessories

Getting To the Negotiation Booth

The Negotiation Process

Who Actually Gives the O.K. for a Car Deal?

The #1 Mistake Customers Make in Negotiations

Trick Alert: The Nodding

This is a particularly subtle technique, but it’s so brutally effective almost

Having a trade in is a great way to get ripped off by the dealership.

2) Or, the money could just go towards profits and commissions.

1. A deal that doesn’t result in enough profit gives them a minimum

What to Do When They Get

How to Price Shop

These are the absolute basics of how negotiating a car works.

How to Skip the Negotiation Process

Why Work With the Fleet Department?

How to Order from the Fleet Department

3) Price shopping by phone. If you call the internet departments of several

Finance and Insurance

One common method of getting customers to buy add-ons is to simply package

Tip: Everything is Negotiable

The Delivery Process

The Best Times to Buy a Car

Buy Your Car on a Weekend – Most incentives happen on the weekends.

More Insider Tips & Secrets

Never Add Leather!

Frequently Asked Questions

Calling a Car Dealership

Kind regards and best of luck with your new car,

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