Wednesday, March 12, 2008


I sold cars for 5 months, made 25,000.00 dollars (which was very far from the top) and learned a whole lot. Since I will never do it again I have decided to give away my knowledge on the subject.

1st I would like to acknowledge that 5 months is not long but I will teach you what I know. I have helped my mom get an interest rate 5 points below what she was initially offered, she got gap and warranty for less than was initially offered, and she bought the car for less than invoice (which is almost unheard of). Oh and it was a Honda one of the highest rated cars out there.

2nd I cannot teach everything I know in one post. So this will be a series. However if you have questions before I mention something please just comment to the topic and I will respond A.S.A.P.

3rd It may be possible to help you specifically via email. No charge of course. Just because I like to mess with car salesmen...

Now, the first thing you need to know is that you don't know more than the car salesman. Thinking you do only complicates matters and causes problems in the long run. I have had many people not play ball and end up not getting the car. You must realize that your on their turf and nothing can change that.
The second thing you need to know is that buying a car is a game. Have fun with it but don't let the salesman know you know it is a game. The salesman must think he's in control at all times. 3rd Everything is negotiable, car price, warranty, gap, A and H, and yes interest rate is negotiable also. Now before everybody gets excited about the interest rate and starts turning down offers, there is a specific way to do this any other way will most likely cause you to leave with out a car. With that said I will now talk about how you go about picking a car.

Do not I repeat do not go to the car lot until you are ready to buy a car, a specific car. Now there is an exception. Some people need to test drive the car first to see if they like it. This is the only acceptable exception. Make it clear that you are only here to drive and demo the car. Most salesman will respond well to this but do not get frustrated if the he/she attempts to sale it to you that day, it's his/her job. I suggest Internet research or maybe just cruising the lot at night to pick something out. Now if you are someone that must drive the car first and want to look at several at different lots then do so. But keep what I said in mind. Also do not tell the salesman that you want to look around at other lots. This will release the super salesman that you want to avoid. Why does the salesman become so aggressive when you tell them this? Because statistics show that people searching lots buy at the 3rd dealership they visit. So they will do anything you want to get you to buy today. Now this seems like a good position for you but its not. As soon as you say show me what you have to offer, they know they have you. So tell them that you just haven't decided if you are ready to buy yet. This shows them that you can leave even when offered the world. Most will attempt to change your mind but remember its their job, you may even have to meet with a manager or even another salesman but I stress remember that's there job.

New car mark up from my experience
base models- 900-1500
middle of the road- 900-2000
top of the line- 2000-3500
Keep in mind that I have seen some with lower mark up like 500 dollars and that not all new cars are marked up this way.

This is a whole new ball game. Used car salesman are the best, they make the most money, and they can be a bit abrasive. Do not be offended by them because by the end of the day they will lose. Why, because you have me... First when looking for a used car decide what you want, whether it be a specific make, a cheap car, or a demo/program. Now if its a specific make then look around online at either or autotrader. Check prices, mileage, and features. Find the one you want. Then find as many others as you can that are similar in mileage and features. Once you have done this. Compare prices seeing where yours falls, in the upper range or lower range. If it falls in the upper range then you know that other dealers can sale the same car cheaper, so the one you want can be sold cheaper also. If it is in the lower range then it might be a good deal already. Now that you know what they are selling for, make some mental notes or just print them out and take them when you go to the dealership of your choice. Only take them if your car is in the upper range. Now the cheap car, your looking for a basic car with simple amenities, no real preference just not a junker. 1st I suggest if your credit is good enough to finance at a big dealership, go there. Used car lots are not reputable or trustworthy plus most do not have a service department. Again I suggest and autotrader. Search for your price range, check millage and features. Pick a few cars, then check them out at night. Find the one you want. Call and make an appointment with the used car manager, to demo the car. This is really important, it will show that you are truly interested and he will not be super aggressive with you. If you like how it drives. Start negotiations. Oh and always get a CARFAX REPORT on used cars. The dealer will do it for you for free, if your willing to buy it. This will show wrecks, water damage, fire damage etc...Now to the Demo/Program care. First I will define these too you. Demo, a car that has been used by management only and never titled. This is very Rare, the car will be in exceptional condition and well maintained. Prices will be close to new. Program, this means the car was sold to a company for example Ford May buy cars for there upper level employee's. Also car rental companies will buy cars like this in bulk and then some where between 15-49000 miles they are sold at auction to car lots. These cars will look like used cars and they will be fairly well maintained. However a carfax is strongly recommend especially if it was a rental car. Most used car lots at major dealers have both of these types of cars. Demo's like I said are hard to come by and even harder to negotiate price. Why? because the dealer took the car off the lot and let someone drive it regularly. By doing that he took a loss. Normally you will be able to get it for invoice, sometimes its a good deal sometimes its not. You have to consider millage in this. To find one I suggest calling around asking the New Car manager's if they have any, making the point that you do not want a program vehicle but a DEMO(an untitled car). Now if your looking for a program again I suggest or autotrader. Pick the type and check prices of similar cars. With this knowledge you should be able to decide on the one you want. Remember that program cars are just used cars. I also want to note that allot of times you can get a program vehicle at a very good price compared to new. Also Call ahead of time and speak to the Used car manager about a good time for you to come by and take a look at it.

Used car markup from my experience.
The average is 4000 dollars. However some lots do not put a price on any of their used cars. Instead they tell the salesman what the dealer owns them for and says sell them for what you can. Most salesman will not start lower than 2000 over what its owned for. And keep in mind that some used cars are marked up as much as 6000 dollars, and I've also seen worse. I know its surprising but its true.

Things to remember

  1. Always call ahead, speak to a manager.
  2. Remember its a game but don't let it show.
  3. Let the salesman think hes in control.
  4. Research is the key to any good deal.
  5. Everything is negotiable.
  6. You do not know more than the car salesman. He does this everyday of his life.
  7. Do not go to a car lot until you are ready to buy
  8. Its the salesman's job to sell you the car don't get agitated.
  9. Program does not equal Demo.

While I have given you some great ammo for buying a car. I have not even scratched the surface of what I learned in those 5 months. If you are considering buying soon, subscribe to this, I will attempt to add a new topic daily. However I am in the process of moving so the next few days I may not update. I truly hope I can help some people out with this info. And don't hesitate to ask there are no dumb questions in the car business.

3. Myths about buying cars, debunked.

  1. There is no 3 day return policy at any dealership, once it has been driven off the lot its yours. Now someone might have gotten out of a deal but that doesn't mean this is true.
  2. Telling the salesman the note you want is not a bad thing. People think that the salesman will raise the note to what you want no matter what it is. 99.9% of the time the note whether you tell them or not will be higher than what you want. Occasionally it will be lower and some salesmen not many will try and raise it to what you asked for, with interest rate. I will discuss this at a later date this can be avoided also.
  3. Large dealers do not buy the cars cheaper than small dealers, everyone pays the same. however large dealers make more bonus's because they can sell more cars, which means sometimes and I stress sometimes you can find a better deal. But it really doesn't matter where you buy it. Just what you know.


 Just Do It!


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