What you say can have a big impact when negotiating on a car deal. One wrong word could greatly influence how much a dealer is willing to compromise. We’ll help you avoid common pitfalls that could lead to higher prices, unfavorable financing terms, or lost bargaining power. Keep reading to learn what not to say when buying a car.
Why Words Matter in Car Negotiations
What you say matters, especially when trying to negotiate a good car deal. Knowing exactly how to negotiate buying a car could save you serious money in the long run.
The Power of Language in Negotiations
Language and confidence are key to making a good business deal, and in our case, a good car deal. When you communicate effectively - being persuasive, not pushy and confident, but not arrogant - you can move a deal on further.
How Dealers Use Buyer Statements to Their Advantage
A dealer is more likely to be willing to compromise with someone who listens before jumping into aggressive haggling. Sometimes it is better to hold back before jumping right in, so the dealer doesn’t take advantage if you give too much away.
A car dealer is not going to want to lower their prices, so they will use anything you say to guide them into how to negotiate with you. If they see that you are eager to close the deal quickly, or know that you are not tight on budget, they could use this to keep prices high.
Common Phrases to Avoid and Why
Here is a cheat sheet on phrases that you should not say when entering into a car-buying negotiation.
“I Love This Car” – Showing Too Much Enthusiasm
This shows the dealer that you are emotionally invested and will probably be easily swayed into paying a higher price. Buying a car is essentially a business deal, so you should keep your emotions in check in the same way you would in a boardroom. You should be able to walk away from a bad deal at any moment. A dealer will know that this is harder to do when you love the car, so they will use this to their advantage.
“I Need a Car Today” – Revealing Urgency
If the dealer knows you need a car urgently, they know that you will be more willing to agree to a higher deal. While it may be true that you really do need a car ASAP, it’s best to not disclose this to the dealership.
“My Trade-In is Right Outside” – Losing Leverage
While you may want to trade in your car, it’s best not to tell the dealer this straight away. This is because you actually end up being able to sell it for more than the trade-in value. It’s best to see what price the deal is offering for the car without the trade-in, before adding more components to a potential deal. It’s better to inform them about your trade-in when you are certain you want to go through with it, instead of mentioning at the beginning and then withdrawing because you’ve found a better option.
In another scenario, the dealer may manipulate the value of your trade-in and show your more expensive cars to get more out of you. It is better to understand the true price and value of the car they are offering without the trade-in, before adding it into the mix.
“I Can Afford $XXX Per Month” – Focusing on Payments Instead of Total Cost
While this might seem like the obvious first step, please hold back. If you give the dealer your maximum monthly payment, it will probably end up being that same cost. This is because they are likely to move numbers around to fit your payment so you may be overcharged in some areas.
Revealing your monthly payment budget is also unadvisable because it may not include other factors like insurance and interest rates. It’s better to focus on the car’s final price, including loan length and interest rate and then move from there.
“I Haven’t Researched Prices Yet” – Lack of Preparation
This is something you should neither say nor do. Research is essential before walking into a deal, otherwise, how can you negotiate? Informing the dealer that you are ill-informed is letting them know that you have nothing to make any comparisons with, allowing them to jack up the prices because you wouldn’t know any better.
Smarter Ways to Communicate with Car Dealers
Asking the Right Questions
Being prepared with the right questions will show the dealer that you have done your research and are not willing to just jump into a deal. Having questions prepared also ensures that you are covering all the bases and won’t have any nasty surprises later. You must be prepared to negotiate and query everything, like what fees are negotiable when buying a car.
Keeping Personal Finances Private
If the dealer knows your personal financial situation, they are more likely to use it to their advantage, and not yours. Remember the word “personal” in personal finances means they only relate to you, don’t volunteer up this information as it is likely to be used against you.
Using Silence as a Negotiation Tool
Remember, less is more. A car dealer will be trying to pull information out of you to sweeten the deal to their advantage. Keeping your cards closer to your chest will allow you to have stronger power during the negotiation. You’re not there to make friends, you’re there to make a deal.
Understanding Dealer Tactics and How to Counter Them
High-Pressure Sales Strategies
Sometimes a dealer will put time pressure on you to panic you into making a bad deal. Buying a car is not a small feat and you should not be rushed into it. The likelihood is that that “amazing deal” will still be there or not much different after having a week to think about it.
The “Four-Square” Negotiation Trick
This is where a dealer divides a piece of paper into four squares and writes in each one:
- Your trade-in value
- Car purchase price
- Your down payment
- Your monthly payment
This trick is designed to make you pay more without realizing it. The dealer will cross out numbers and draw lines to make it look as complicated as possible to confuse you into signing on to a deal. Most times the dealer will try to trick you into focusing on only the monthly payment and not the final price.
There are a few steps to avoid being led down this track:
- Auto-loan pre-approval: This will stop the dealer from manipulating the length of the interest rate or loan
- Use a loan calculator: While the dealer is setting out their deal, use a loan calculator on your smartphone to figure out what the monthly payment will be. Make sure to input interest rate, monthly loan term and total price of the car to figure this out.
Add-Ons and Extras – What to Watch For
Be wary of being talked into add-ons and extras you neither want nor need. Most times these extras are cheaper if you buy them separately or elsewhere.
The same applies for things like gap insurance and extended warranties. Just because the dealer is offering them, doesn’t mean you can’t find a more affordable option somewhere else. Moreover, insurance that a dealership offers is usually the same as standard comprehensive insurance that has been priced up and rebranded.
Final Thoughts
When negotiating the purchase of a car, it’s important to know when to speak, and when to hold back. A dealer will use anything you say as leverage to drive up costs and keep you from making a good deal. When preparing to go into negotiations, it’s important to research thoroughly before entering into a deal.