Making a deal

When you’re ready to buy, you’ll take a seat at the bargaining table — literally. You and a salesperson will sit on opposite sides of a desk to agree on a price.

When talking price, your salesperson might tout a manufacturer’s cash-back rebate, or “factory-to-customer” rebate, on the car you want. In fact, these rebates do not change what the dealer paid for the car, but are due to you directly. So you should negotiate on cars with rebates just as you do on any other vehicles. Many buyers use a cash-back rebate as part of their down payment.

Factory orders

If you plan to make a factory order, which means you want a car with features unavailable on any vehicles the dealership has in stock, don’t be talked into paying more. In fact, you should pay about the same or even less than if you bought a car off the lot. That’s because your order saves the dealer money on flooring costs, or the financing fees that it must pay to stock its inventory of cars. You may, however, need to make a large deposit when making a factory order — so be sure it’s fully refundable.

Profit motive

It’s important to remember that dealers want to make a profit on each sale, and salespeople are paid a percentage of the profit on those sales (often 20% to 25%). So they have refined the negotiation process to a virtual science.

For instance, your salesperson might turn you over to a colleague who’s more experienced in negotiating or who tries another bargaining angle. They may have agreed to split the commission. In this case, it’s smart to stick to your guns. Don’t be disconcerted or distracted if you’re told you have to talk with the manager.

Shop around

Remember, too, that there are other car dealerships. Once you’ve been quoted a sales price, ask the salesperson to write it on the back of a business card. Then consider taking the offer to another dealership. While shopping this way won’t please your salesperson, other dealerships may offer a better price on the same car model.

For this reason, car salespeople are quite good at turning on the pressure — they know if you leave their dealership empty-handed, you might never return. So they may say a certain deal ends “today,” or that the exact car you want won’t be available tomorrow or next week, or is in low supply throughout the area. If they do, stay calm, and if you’re uncomfortable, you may simply leave.