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This weekend my wife and I went shopping to replace our beloved minivan. Negotiating car prices is a fascinating experience. I'm not good at negotiating because I've never taken acting classes. I find it hard to get into character. When the salesman asked me how much I wanted to spend on our chosen vehicle, I only had one response ready: "I'd like to spend zero, you boiled turd. Just give it to me. Or did I misunderstand the question?"

Okay, I didn't say that. But I did laugh at him in a mocking sort of way. Obviously the question is designed to determine how dumb the customer is. You pass the test by not taking out a copy of your bank statement and saying, "I can't read. Can you tell me how much money I have?" The sales guy bowed out of the negotiations and introduced us to the General Manager. The GM went into his ridiculous spiel about how he was willing to sell this vehicle for less than he paid because he wants the manufacturer to give him a higher quota of that model next month. Apparently his business plan involves having a greater inventory of cars that no one is willing to buy for more than his costs. The general manager looked me in the eye to see if I believed his absurd lie. My wife and I just glanced at each other with mock disappointment. The game was on.

It was time to get into character. I played the part of the husband who insists on doing endless research, thus providing the dealership with no hope of closing the sale today. I said, "I want to spend some time doing research and then I can give you an offer. Maybe I can get that done by tomorrow."

Sales people hate two things: Informed customers and postponement. This was the worst case scenario for the dealership, and my ploy was designed to make the general manager "negotiate with himself," as the saying goes. In other words, we wanted him to keep offering lower prices before we made our first offer. That brings down the ceiling price and prevents us from accidentally offering more than he would have asked for.

Then the general manager goes into his canned routine about some sort of dealer incentive or other ambiguous pot of money that he could reluctantly dip into, thus offering an even lower price. He said that if we accepted this offer his children would have to wear clothes made of plastic grocery bags or some damned thing. I wasn't paying attention to the details.

We acted unhappy and asked for his business card. "We'll do some research and get back to you," we said.

Later that evening, an hour before the dealership closed, Shelly sent a text to the general manager offering a glimmer of hope. Shelly took on the part of the "good cop." Her character wanted the car but she needed a way to convince her stubborn husband to stop researching. She told the general manager by text that she needed another $1,000 off the price he offered to make that happen. He offered half of that. We accepted.

Before we made our offer I did my research only to discover that there was no way to figure out a fair price for this particular vehicle. There are plenty of sites that seem to offer that sort of information, but not credibly, and usually not for this model. I assume the car-buying sites are in the pockets of the car dealers or have their own scams going. In the end, we were flying blind and probably got screwed on the price. But that leads me to my favorite part of the negotiating process. No, we weren't done yet. Once you have an agreed price, the dealer keeps negotiating, but more cleverly this time.

The next step in the negotiations - if you can call it that - involves a fill-in sales guy making a "mistake" that lists the price on our paperwork far higher than what we agreed. By the time you get to this stage of the process, you're worn out from looking at all of the numbers, and you're tempted to sign whatever they slide in front of you. But I've been through this process enough times to know that the first version is always the "mistake" paperwork. I asked to see what price he had on his forms before he went too far, showed it to my wife, and explained to her the "mistake" price ploy. The sales guy apologized for the "mistake" and corrected it.

The sales guy introduced us to the finance guy for the rest of the paperwork. This is the final phase of our negotiations. The finance guy goes into his transparently phony act of amazement that we convinced the general manager to give us such a good price. He acts as if the price is so low it might be a mistake, or some kind of once-every-hundred-years situation. This is total bullshit, of course, and every finance guy at every dealership says the same thing to every buyer. But it still feels good, which makes me feel dirty.

The finance guy goes into his sales pitch about how we need some sort of invisible coating of magic protection for the exterior of the car. Without that protection a midsized bird can shit right through the hood and halfway through the engine block. We also need some invisible chemicals to protect the interior of the car because otherwise we are just wasting our money. Oh, and we need a more comprehensive warranty to cover all of the many, many things that will be breaking on this car. Apparently we had negotiated a terrific price on a car that was highly vulnerable to the elements. I kept craning my neck to see if it had dissolved into the parking lot behind me. All of the invisible and magical products he offered totaled several thousand dollars.

I declined all offers, but the finance guy wasn't done. He poured water on a sample of floor upholstery that had allegedly been coated with magic protectant. The water beaded and rolled like a marble. It was cool. But I turned it down.

As I assess our performance in this process, I want to believe we got a good price and that we cleverly declined offers for useless add-ons. The reality is that we are amateurs and we were dealing with professionals. The rational part of me knows that somewhere there are customers getting better prices on this same vehicle, which causes me to hate both the car and the dealership. And thanks to the finance guy, I have to worry that my car has no magic protection. I've afraid to exhale in its general direction.

Today we will take the car back to the dealer to find out why it is leaking so badly. It might be water from the AC, but it's a non-stop stream. I just hope we don't run into the finance guy at the dealership. I don't want to hear how the magic protection would have stopped this leak.
 
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Aug 20, 2012
@Scott:
"So there is an acceptable price for magic coating?"
Mine is zero.

"Competitive bids don't work these days because dealers are networked. If my local dealer offers me a price on a specific car, the other dealers in the state know about it instantly and don't try to beat the first offer. If dealers competed in a real sense, they would drive their margins to zero."

How did you reach this conclusion? Admittedly I last used the Predictioneer's Game/Fighting Chance approach in 2007. However a co-worker used it this past March.

 
 
-1 Rank Up Rank Down
Aug 20, 2012
You're right -- there is no way to find the price on these so get bids. I used info from fightingchance.

[Competitive bids don't work these days because dealers are networked. If my local dealer offers me a price on a specific car, the other dealers in the state know about it instantly and don't try to beat the first offer. If dealers competed in a real sense, they would drive their margins to zero. -- Scott]
 
 
+15 Rank Up Rank Down
Aug 20, 2012
Out of curiosity, did the sales manager or finance guy ask you to excuse his uncontrollable tail wag?
 
 
+5 Rank Up Rank Down
Aug 20, 2012
I love cars, I hate buying them. Classic irony. Everything you said, Scott, is dead accurate. I,too, went through the "mistake" scenario. Only I had to fight to get it corrected because I bought the car 2 hours out of town, traded-in my vehicle, drove the new one home with the obligatory temp tags and was subsequently informed via phone the finance guy gave me a rebate AND a low interest rate. But was only allowed to give one or the other but not both. So, if I ever expected to get tags for my new vehicle new forms would be Fed-Ex'd to me that I was expected to willingly sign in order to screw myself. The fight that ensued was irritatingly stressful involving many phone calls to various managers, and ultimately the owner of the dealership. Finally, after lowering myself to behave like a maniacal serial killer and having my good friend who happens to be an accomplished trial lawyer call them, the acquiesced. I never liked the car after that and sold it in a couple years. Like you, I've been through this experience so many times I know I've taken it in the shorts every time but that experience topped them all.
 
 
+10 Rank Up Rank Down
Aug 20, 2012
Ya, I had the "mistake" paper work but they insisted it was the original that was the mistake. My "final number plus tax, tag & title" forgot a $400 something. Hate, hate, hate this crap.

Curse you, Infiniti of Tampa!
 
 
Aug 20, 2012
As you well know, while on your computer you are in control. That's the stage when you should decide which dealer you should visit; I'd say your mistake was in visiting the dealer without knowing whether another would have given you a better price.

BTW, the way to avoid the nonsense about undercoating, waterproofing etc. is to stipulate the exact menu of options you want and insist on a quote for the total cost, after fees and taxes, calculated to the penny to drive it off the lot. Then you bring it in and hold it up to the finance guy's face.

For more, see Chapter 1 of "The Predictioneer's Game," and for even more explicit detail, see the site Fighting Chance.

[So there is an acceptable price for magic coating? -- Scott]
 
 
Aug 20, 2012
The "amateurs vs. professionals" comment intrigues me. I wonder if there is a business opportunity here for professional negotiators to do this work for you in return for a percentage of what you are saving. The biggest problem would be scheduling.

Actually, an even bigger problem might be setting the fee, since the actual cost of the car is so hard to determine. The negotiator would probably have to have set prices for all current models of cars, to give a pre-determined starting point. You could try to negotiate that price with him, but...
 
 
Aug 20, 2012
Here's how I deal with the finance guy who is trying to get me to buy the extended warranty and protective add-ons: "Wow, this vehicle must be a piece of crap if it needs all that extra protection and warranty!" I then threaten to abandon the purchase because of said crappy-ness. It is amazing how quickly they back off of these extras, or reduce the price to an agreeable value.
 
 
-2 Rank Up Rank Down
Aug 20, 2012
Finance guys never try to hard sell me anything. I can never decide whether I should be flattered by this or take it personally. I'm a hard negotiator and I never do trade-ins, so I always worry that the lack of pressure in the finance office means that they've already made their money on the sales price and I'm not as hard a negotiator as I think I am. I bought a brand new car in February and was in and out of the finance office in 15 minutes.
 
 
Aug 20, 2012
And this is why bought my last two cars online. First experience was about 6 years ago and it couldn't have been better. The last time was not as good and required me having to be willing to walk away from the dealer before they honnored their price. But both times I've bought my cars below invoice with no haggling.

[The Internet price is designed to be a sucker trap. You always pay more that way. -- Scott]
 
 
Aug 20, 2012
Salespeople are like trial lawyers and tax collectors: they are all resiliant and numerous as roaches, they have all the power but there's nothing you can legally do to thin their numbers or keep them under control. Therefore you are up the creek without a canoe.
 
 
Aug 20, 2012
What I found the most interesting is the "mistake" paperwork comment. I had a similar "mistake" happen on the 2nd of the 3 new cars I have purchased. Only difference was that the finance guy made the mistake. I had dismissed it as an accident (because it only happened once to me). I've now changed my mind. Thanks Scott.
 
 
 
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