Drive the Deal
by John Kenda and Michelle McCune
Smashwords Edition
Copyright 2012 John Kenda and Michelle McCune
Smashwords Edition, License Notes
This ebook is licensed for your personal enjoyment only. This ebook may not be re-sold or given away to other people. If you would like to share this book with another person, please purchase an additional copy for each recipient. If you’re reading this book and did not purchase it, or it was not purchased for your use only, then please return to Smashwords.com and purchase your own copy. Thank you for respecting the hard work of this author.
Table of Contents
The Dealership Environment
Value
Training
The Key To Our Approach
Salespeople
Sales Manager
Finance Manager
When You Get to the Dealership
Negotiations
Lot Allowance, aka Holdback
Holdback Math and Manufacturers
Rebates and Incentives
Hard to Find Vehicles
Choosing Your Car
Arriving at the Dealership
The Test Drive
Mechanical
Walk Away
Negotiations
Vehicle History Report
NADA Report
Further Negotiation Points
Warranties
As Is – No Warranty
Implied Warranties
Unexpired Manufacturers Warranties
Service Contracts
Oral Promises
Vehicle Systems
Optional Signature Line
Bad Credit or First Time Buyers
Know This Before Signing Anything
Appraisal
NADA Bookout
Intro
Financing Tricks
Negotiating Financing
The Call Back Sheet
The Gross Screen
The Contract
Internet Sales
Contract
Negotiations
Hidden Costs
Closed End/Open End Leases
Gap Insurance
Credit
Early Termination
Residual Value
Capitalized Costs
Used Car Leasing
Fees
Rebates
Contract Review
What People Are Saying About Drive the Deal!
Drive the Deal is an innovative new program designed to empower consumers to effectively negotiate their car purchase. The Drive the Deal system is easy to understand and provides you with step-by step instructions about how to create advantages and reduce problems at the dealership.
Developed in partnership with leaders in the retail vehicle industry, Drive the Deal gives consumers the tools to effectively counter all the tricks, trials, and tribulations that a visit to the dealership brings.
This e-Book is for you if you intend to buy any kind of new or used vehicle and you want to do the best you can in an environment you’re smart enough to know that you don’t fully understand. You have a life outside of the often-murky world of automotive sales and aren’t fully briefed on all the tricks that go into the purchasing and financing process.
The Dealership Environment
It’s an unfortunate truth that car salespeople are trained to take control and influence consumer decisions by using both your emotions and their insider knowledge of the system against you.
So let’s start at the start, and talk about car salespeople. Some stereotypes exist for a reason, and the stories you hear about car salespeople have more than a few grains of truth.
And while the loud-jacketed brash car salesman who talks down to women has somewhat fallen by the wayside in recent years, his neatly-dressed replacement isn’t any more interested in your well-being.
Sure, there may be a selfless salesman out there who sees himself as a crusader, dedicated to giving people a great deal so he can make less money at a commission based sales job. We don’t think it’s too likely, though.
What salespeople actually do is use built-in advantages and knowledge of the system to extract every possible advantage at every step of the transaction. And if that wasn’t bad enough, the salespeople shamelessly play on your emotions, alternately flattering and bullying you until you’re in the car you love on conditions and prices they love.
We’ll discuss the mechanics of how salespeople and managers are paid later in this e-Book. It’ll be important for you to keep that information in the front of your head during each part of the negotiation. It’ll definitely be on the mind of whoever you’re dealing with.
Value
Buying a car is generally a confusing and intimidating experience. Car salespeople and finance managers work as a team to sell you on whatever they can get away with. You need to ask yourself the same question that the dealer is focusing on:
What’s this part of the transaction worth,
and
how can I maximize my benefit?
Dealers will use every trick in the book to ensure that they make the highest profit possible on every step of each sale. One look at the huge dealerships being built will tell you just how much money there is to be made in the retail car market.
So in underlining what you already know about the built-in difficulties of purchase process, what we’re doing is making a point about value. In this transaction, you value a good deal, an attractive car, not getting hassled, and finance terms that aren’t too difficult. Everyone at the dealership values one thing: your money. And they are going to do what they have to do to get it from you.
An underprepared car buyer is the car salesman’s bread and butter. Car salespeople are paid for the number of cars and aftermarket items they sell. As such, the salespeople at the dealership have a direct conflict of interest against helping you find the best car for you at a reasonable price.
So what does all this mean for you? You’ve got to be as prepared as possible to navigate your way through the vehicle-purchasing maze.
The most important parts of the transaction for you to understand are as follows:
There’s no such thing as a standard price on any vehicle, new or used, purchase or lease. The MSRP or sticker price is a tool for dealers to anchor the price to where they want it to be.
Like most consumers, you probably think of the purchase transaction as a single unified action. It isn’t, and the people at the dealership have a deep understanding of how each of the components affects the other ones.
In fact, there are three component parts, purchase price, trade-in, and financing, each of which has their own specific traps and pitfalls. In the sections below, we break down how exactly to proceed in each of these three distinct transaction segments.
Training
As in any deal, it’s important to know who you’re dealing with and how they are likely to behave. As an example, dealerships have extensive training and seminars to teach salespeople how to take advantage of customers’ weaknesses and award huge prizes when the salespeople do so. Salespeople are taught to take control of the negotiation from the moment they say hello to you and keep control until you leave the dealership with a vehicle and financing.
Beyond taking and keeping control, the continuous training for salespeople covers one subject in exhaustive detail: closing the deal. Sales managers conduct daily role-playing and team sales exercises, motivate their personnel with daily bonuses (called spiffs) and provide nearly fanatical levels of sales support. The salesperson will tip the manager about how to behave around you and they will tag-team you into a deal that makes them the most money. Every time.
Past all of the sales tactics, outright lies/deception and blatant emotional appeals is a single imperative:
Line 1 on the salesman’s training manual is
“Don’t
let them leave without a car”.
If you leave without buying, the chances of your returning to buy a car from the same salesman are very low. When you leave the lot, their commission leaves with you.
So there’s going to be not-too-subtle pressure from your new friend, the salesman, who would very much like to put you in this car, but there are these other people making offers, and gee, he’d hate to see you lose your chance. And every other trick, mind game, and manipulative nonsense he can think of.
Sure, the car may be gone tomorrow. But if you don’t take your time and go through all the necessary steps to get the best possible deal, the payments you agree to are going to be there for years.
While the sheer number of emotional appeals and other tricks are exhausting, their intent is the exact same: To get you to sign on the dotted line at terms that maximize their commission. This is going to happen at every. step. of. the. process. Guaranteed.
The bedrock tenet of our program is:
Be ready to walk away if
the deal isn’t right.
The Key to Our Approach
The key to the Drive the Deal approach is to establish and then stay in control from the moment you step onto the lot to the end of the financing process. There are at least three people in the dealership working together against you. Your only defense is to stay assertive and in control. Some people may find our approach difficult, but you are not being intentionally rude. The best way to approach this is as a business deal in which each side is attempting to do the best they can. It is the dealer’s job to make the most money they can, just as it is your job to save the most money you can. We give you the tools to confidently negotiate with the professionals at the dealership. And make no mistake, car salespeople and finance managers are some of the savviest negotiators on the planet.