LOOK: 4 Tips That Will Save You A Bundle At Your Next Car Auction
Many of us have been at the car dealership and have got hit by a salesperson during price negotiations for the purchase of a new car. A lot of people give up too easy or do not negotiate at all because they want to avoid the dreadful act. This only means more extra money in the car dealers’ pocket, while you are out of some thousand dollars! Yes, they earn that much in profit per car.
This article reveals the dealer’s selling tactics and how you can get around them. Just before we dive into the car buying tips, we want to know what makes up the dealer’s profits.
In addition to the MSRP (manufacturer suggested retail price), which is the dealer’s expense for the car plus an extra 20-25% profit, a dealer also gains financial incentives from the manufacturer when a brand new car is sold. This is named Holdback.
Depending on the car, dealers can earn hundreds on each car throughout holdbacks. Dealers also win extra incentives and bonuses on selling a car before the end of the month and/or quarter.
A shrewd dealer can reach thousands by selling a new car even at invoice price. This is how a new car buying can get tricky for some consumers.
Ready to discover how not to put a dent in your wallet on your next car purchase? Here are four tips to begin with. Each one is a dealer tactic to be conscious of.
1. The Guilt Trip
You maybe noticed every desk in a dealership has photos of the salesperson’s family, rather than photos of cars. Halfway in the negotiation, the salesperson will bring them up and make it look like his little paycheck can hardly pay for his daughter's college and little Bradley’s braces.
An experienced salesperson will shortly have you feeling guilty for driving the price down and hurting his commission. Watch out not to fall for this tactic, considering you already understood holdbacks and incentive programs from manufacturers.
This article reveals the dealer’s selling tactics and how you can get around them. Just before we dive into the car buying tips, we want to know what makes up the dealer’s profits.
In addition to the MSRP (manufacturer suggested retail price), which is the dealer’s expense for the car plus an extra 20-25% profit, a dealer also gains financial incentives from the manufacturer when a brand new car is sold. This is named Holdback.
Depending on the car, dealers can earn hundreds on each car throughout holdbacks. Dealers also win extra incentives and bonuses on selling a car before the end of the month and/or quarter.
A shrewd dealer can reach thousands by selling a new car even at invoice price. This is how a new car buying can get tricky for some consumers.
Ready to discover how not to put a dent in your wallet on your next car purchase? Here are four tips to begin with. Each one is a dealer tactic to be conscious of.
1. The Guilt Trip
You maybe noticed every desk in a dealership has photos of the salesperson’s family, rather than photos of cars. Halfway in the negotiation, the salesperson will bring them up and make it look like his little paycheck can hardly pay for his daughter's college and little Bradley’s braces.
An experienced salesperson will shortly have you feeling guilty for driving the price down and hurting his commission. Watch out not to fall for this tactic, considering you already understood holdbacks and incentive programs from manufacturers.
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