Introduction to Internet Car Negotiation
Still unknown to many buyers, these days most car dealerships have a separate Internet Sales Department with one or many salesmen that respond to online requests. Due to the nature of these requests the Internet salesman is very different than the traditional “Showroom” Salesman.
The Internet Salesman…
- Is forced to provide you with a competitive quote because you are not physically at the dealership and can easily move to the next offer.
- Has an objective to move a large volume of vehicles rather than maximizing profit from an individual sale.
- Is not as pressured as the “Showroom” Salesman to sell a car that is currently on his lot. He’s more used to looking at inventory from other dealerships and arranging trades.
- Responds to many more leads than the “Showroom” Salesman and has a different commission structure (typically a higher salary % and lower commission %; or no commission at all). Often times this can lead to better deals than what you could possibly get walking onto the lot.
- Typically, has a portion of compensation dependent upon the score of customer satisfaction surveys…which can be used as a negotiating tool.
- Without a face to face meeting, cannot use many of the psychological hard-selling tactics utilized by “Showroom” Salesmen to close the deal.
Speaking of which, some of the “Showroom” Salesman’s tactics you will be able to avoid are…
Showroom Salesman Tactics and Car Dealer Scams…
- “Take it or leave it” negotiating or “this offer is only good for today”. You are much more likely to make concessions on price than leave the showroom once you go to the trouble of getting there.
- “I have to check with my manager.” A classic sales technique is to introduce a third party (which he may never even talk to) that will create a good cop bad cop dynamic. The “Showroom” Salesman wants to appear to be on your side and not have to deliver any bad news or inflexibility on price. He can do this by having the tough news come from someone else in the back room.
- “I have to buy new shoes for my kids” or playing the sympathy card that he or she stands to lose money on the deal. When you meet with someone in person they can appeal to your soft-side, show you pictures of their family, and cause you to empathize with them.
- “Let me get an estimate for your trade-in right now.” Once you hand over your keys, dealers will take their sweet time getting an estimate for your trade-in. They do this because (1) they can keep you on the lot longer and (2) so they can muddle the cost of the new car and trade-in together. If they cut you a deal on one of these items, they most definitely will try to make up for it on the other. You’ll want to keep these items separate so that you get the best deal on each.
- “What do you want your monthly payment to be?” By focusing on the monthly payment amount, dealers can make the total cost of your purchase ambiguous. A dealer could come up with the same monthly payment for two wildly different purchase prices by shifting around other factors including the amount of up-front payment, whether you purchase or lease, interest rate, length of loan, and your trade-in value.
- “The only available model for that car already has these extra options installed at an additional cost”. Even if you do not want it, the make and model of car at that lot may have some extras installed which the dealer will not remove including GPS, satellite radio, heated seats, splash guards, pin-striping, etc.
- Last minute fees may pop-up as you start filling out the paperwork when the dealer knows you are less likely to back out. These include “dealer prep-fees”, undercoating, VIN etching, paint sealant, rust-proofing, and more.
Using the Internet Department is one of the keys to getting a good price. By comparing prices without being on the lot, you are turning the car into a commodity where the lowest bidder wins. After all, a black Nissan Maxima SV from Springfield, NE is exactly the same as a black Nissan Maxima SV from Omaha, NE. As soon as you step foot on the lot, you can easily lose objectivity and forget that the same exact car is available elsewhere as well.
Now that you understand why it is so important to go through the negotiating process without visiting the showroom, it’s time to read the…Ultimate New Car Buying guide