Evil Week would not be complete without an intrinsically "bad guy" of our society: The car salesman. There are few other professions so naturally associated to deception and greed. Stereotypes happen for a reason, yet there is more than meets the eye. If you ever wondered what goes on in those offices while you wait during the negotiation talks, get ready... it's more interesting than you think.

Yes, the car salesman... that lurking creature that always appears before you finish reading the information in the car tag, obnoxiously dodges your questions and always seems to have a plan of his/her own. Learning about the "enemy" can give you powerful insight to leverage your negotiations and potentially saving you hundreds, or even thousands of dollars on your next car buy. Having been in the trenches myself, I would like to share some insights of the wicked mind of the car salesman.

First, some background...

The typical car salesman is an individual that for some reason or another ends up gambling their livelihood in selling cars. No kid tells his dad "when I grow up I want to become a car salesman". Actually, the best place to get stories about broken dreams is the break room in a car dealership. That eclectic mix of divorcees, failed businessmen, recently fired individuals and international hustlers of all types is what you'll be dealing with. With a few exceptions, the car salesman would be happier in a salary job elsewhere. Trust me. After working that dealership schedule for a while, a forty hour week seems like part time with benefits.

Having said that, there are some key points you need to know when you walk in that dealership:

1) EVERYTHING in life is a negotiation… including car purchases
If there is a valuable lesson in the car selling experience, it is the negotiation skills you acquire. Negotiation skills are useful in a wide variety of fields, from romance to corporate acquisitions. Needless to say, this should be your main focus when going into the dealership. Yes, you will find the car you like. But, first and foremost, you are there to negotiate. Get that mindset ready and you’ll avoid distractions and a bad deal. Speaking of distractions…


2) The car salesman knows you're ready to avoid him
Please save yourself the trouble of premeditated defense mechanisms. "I'm just looking" is just not good enough. As our General Manager said on one of our pep talks:

People don’t spend a Saturday afternoon in the dealership if they’re not ready to buy a car. If they were just looking, they’d be at the mall.

Surprise! We can smell your avoidance a mile away. We actually expect it. Don’t insult your own intelligence and be upfront about your intentions. Your decisiveness puts you in a better negotiation position from the start. Don’t waste that advantage pretending you’re not ready to buy a car. If you’re price shopping, say it. You’ll have the salesman eating off your hand and craving for your business. If that sounds good, then also remember…

3) The salesman works twice as hard as you think. Be polite
We understand how tedious it is to sit for hours waiting for reasonable figures. We do it everyday. Your impoliteness will do nothing but discourage your evil car salesperson to work with you. Remember, the salesperson is working hard to earn your business. Think of him or her as an intermediary between the desk manager and you… the messenger, so to speak. The manager is the one that tweaks the numbers. The salesperson just wants you to buy the car (salespeople have a unit quota to meet; managers have a figure to meet). One major unknown fact in car dealerships is that quite frequently the salesman is negotiating in two fronts: you and the desk manager. Managers can be just as unreasonable as difficult customers in giving figures, but leave that to the dealership. Just remember that your politeness can definitely encourage your fellow salesperson to negotiate harder for you in his or her effort to make both sides meet. Sounds vague, but trust me when I say that it can mean the difference between a $22000 and a $26000 final price tag. In case that you are confused with the process…

4) Mind the hierarchy
Like in every organization, there are people managing people. You, as a customer, will be better off knowing that different levels work under different incentives. The hierarchy scheme below is consistent across brands and dealerships, and knowing it may help your negotiation strategy in the time of need. Know who you talk to when you approach the jungle of the sales lot. Here is a brief description of each category:

• Salesperson: The "soldier" of the dealership. Disposable labor trying to make a buck by finding the right car. They are the ones that will approach you and walk you through the entire process until your agreement to buy. They’re the pawns of the dealership, and many times are ill equipped in the art of sales. Don’t get frustrated. If there’s something they don’t know they can find someone that does. Their compensation is often based on numbers, so in their side, selling more cars for cheap is better than selling a few "heavy hitters". Remember this.
• ASM: The initials stand for "Assistant Sales Manager". Arguably the hardest position to hold within a dealership. The ASM is the direct supervisor of the team of soldiers. ASMs are usually soldiers that have been promoted due to exceptional displays of salesmanship (meaning they sell a lot). He is there as a "safety net" in case that negotiations go sour. Given the astronomically high turnover ratio for car salespeople, "taking turns" happens quite often, since the typical newbie is often horrible at presenting numbers to the customer. Other responsibilities include (constant) training, producing detailed reports for the higher echelons of management, interviewing job candidates, and many other activities that make this job quite a challenge. To make things even worse, they often get paid based on how many units their team sold, and how much money the sales made. When your fellow salesperson brings somebody with him/her, most of the times it will be their ASM. Be careful, for they’ve proven themselves to be good negotiators. Also know that higher levels of management will put more trust in the ASM than any typical salesperson, meaning they are tougher to deal with, but can help you in ways the typical car salesperson’s lack of authority impedes.

• Finance Managers: Assuming you agree in numbers, the salesman will shake your hand, congratulate you on your new purchase, and even buy you a soda before taking you to the finance office. Known in the business as "the box", the finance office is the place where the finance manager presents you with a wide variety of warranties and complimentary services in a "live infomercial" fashion before signing the official documents. Yes, you guessed it. They get paid on gross revenue figures alone. They are ASMs promoted from "the floor", and often are exceptional negotiators. The fact that the dealership trusts them with official paperwork should hint on the level of trust they have. The finance managers are the only individuals that can make decisions independently during your purchase process, so if you have any hard questions, ask them in the box. Also, don’t mind the rush you may feel. Make sure you read every single figure before signing the official contracts. Nothing is done until you sign, no matter what they tell you.

• Desk Manager: They are the mysterious figures sitting in the office, in front of a monitor, talking with the soldiers that come in and out of the office. Ninety percent of the time, they will not have direct contact with the customer. They are the ones that tweak the numbers and structure deals based on the information they receive from the salespeople and ASMs. They print the paper your salesperson brings to you, and they are the other side of the negotiation. During the "back and forth", your salesman will talk to them about your negotiations. In exceptional cases, they will come out to the floor to directly negotiate with you. They are the best of the finance managers, promoted. Their compensation is based on store figures and gross revenue. If you’re negotiating hard enough to get one of the "big guns" to sit across the desk with you, probe his greed a bit and analyze him. He is the brains behind the entire system.

• General Manager: The alpha dog of the pack. GMs enjoy absolute authority in everything concerning the dealership. The "boss" will deal mostly with desk managers, and administrative personnel (finance directors, accounting, etc). Nevertheless, if there is somebody that can make magic happen, it is the GM. He will sell a car for a dollar if he deems it appropriate, because he can. They are often very reasonable businessmen. If you deal with one during your purchase, he will tell you what it is and why it is.

Remember that they need your business just as much as you need their car. Whether you are talking with a disgruntled employee trying to earn quick cash by selling cars or a hard core desk manager with 20 years of experience, the end result is that you will not be denied a good business proposal. And if there is one thing that business proposals have in common, is the importance of facts.

5) Do your homework
No matter how good your salesperson is, how big of a discount you get, or much "magic" is involved, the best weapon you may have is previous knowledge on the car you buy. By researching the product you decide to buy before hand, you will solidify a strong negotiation position that cannot be budged by any "trick" of the evil salesperson. Don’t be afraid to go deep. For example, be aware that domestic cars usually have a high markup compared to import vehicles. Know how much you are willing to pay for your purchase, what interest rate your credit yields (we like people that have external credit), and how much money you are willing to put as a down payment. The more information you get before going to the dealership, the less room you give the managers to tweak the numbers in their favor. If you lack pieces of information, ask for them, and wait until you get the answer before you move on with the deal. After they try (and they will), they will eventually learn that their gimmicks are nothing compared to a well educated buyer. If you know your facts, you will win that match. The toughest negotiator I ever had was a 75 year old man that was not scared to pull out a calculator during negotiations and actually spotted two numbers that my desk manager had maliciously tweaked. He got a square deal on his vehicle, and the negotiations lasted only 20 minutes. My desk manager gained a lot of respect when he knew the customer knew exactly what was going on.

As a final piece of advice, always remember that behind the fake smile, the monitor and the pen, there is always a person that has a family waiting for him/her after work. By understanding their different incentives and motivations, you can end up being the topic of conversation during the next lunch break. You can be that customer that gained respect from "the enemy" by his or her excellent negotiation skills, no matter what jargon they threw, how tight the saleswoman’s slacks were, or how awesome the advertised deal was in the first place. Don’t let them win. Make sure you set an example that will make them doubt the next time they tweak a number.

 

Thanks Chuck
I have learned that the hardest work has already been done by the dealership and that is the price given to the previous owner of the car I want to buy. There is a sometimes large distance between wholesale, a moving target, and retail, whatever the market can stand. I know that if I am on with my homework and the month end is looming I can place myself in the drivers seat. Pun intended.
Great post/article.