“The salesman knows nothing of what he is selling save that he is charging a great deal too much for it.”

– Oscar Wilde

Car dealers sure get a bad rap. Well, you know what?

They deserve it!

They use sneaky, high-pressure sales tactics…and they usually work.

So when it comes to “dealing with the dealer,” here’s my first piece of advice:

1. DON’T

When I’m in the market for a car, I almost always buy used—directly from the owner and not from a dealer. A little bit of a hassle? Maybe. But…

Ever heard of advertising charges? Destination charges? Dealer preparation fees? Basically, all of these add up to me, the buyer, paying for the privilege of driving a car off the lot instead of someone else’s driveway. And that’s before we talk about dealership markups.

Buying used directly from an owner saves me a ton of money.

Recently, though, I made an exception.

My wife and I bought a Jeep Compass for our daughter, who’s in college. The girls wanted the peace of mind that comes with buying a brand new car from a respectable dealership. And sometimes, you just can’t say no.

So if you’re going to be like me and ignore my advice and buy a new car from a dealer, here’s how to blow through their sales tactics…

And negotiate like a Boss.


It bears repeating…many car dealers deserve their bad rap.

Mark McDonald at MotorTrend’s Car Salesman Confidential puts it this way:

“There is an incredible arrogance under the surface in the car business, and behind the smiles and the handshakes, an incredible disdain for our customers. In some places the culture has become so rotten it’s considered fashionable to talk in the most disparaging tones imaginable about the customers behind their backs. It’s almost as if salespeople are in a competition to see who can make the most damning statement about a customer.”

Does this statement apply to every car dealer?

Of course not. But while reputable dealers may be out there, they are almost indistinguishable from the bad ones. So when you walk on to that lot, do not, under any circumstances, let them tug on your emotions and get you to see them as human.

They’re not. They’re evil alien creatures trying to steal your money and your dignity.

Okay, I might be exaggerating a little. But that’s the kind of mindset you need to have. Everything they do is by design…

Designed to break you down.

Of course, this doesn’t mean you need to be overly aggressive. Walking onto the lot with guns blazing is likely to get you on the dealer’s bad side, and rather than working with you, they might be looking for reasons to rip you off.

Instead, keep it professional. Don’t show too much emotion, and don’t give them any excuses.

If you’re trading in, make sure the old car is clean, inside and out. Show them you mean business. They aren’t your friend…

They’re the opposition.


One of the biggest mistakes you can make is to walk in to the dealership without a plan.

To start, this makes you susceptible to flashy upgrades you don’t need. And…it makes you dependent on the dealer to tell you the value of the car.

Which has nothing to do with the sticker price.

Psychologists call this the Anchoring Effect, and it can wreak havoc on all forms of decision making, from managing your investments to buying a car.

Long story short: your first impression is often the one you rely on the most. So if the dealer quotes you an astronomical price, then brings it down slightly…you FEEL like you’re getting a break.

Are you? Probably not!

Luckily, like with most things in life, the internet makes research a lot easier. According to Autotrader, many people now spend 60% of their time in the car buying process doing research online before heading to the dealership.

That’s what we did, determining exactly what we wanted and what a fair cost would be.

With a “spec sheet” of colors and options for our Jeep Compass ready, we called 4 different dealers. Two of them—a mega dealer and a smaller one—were nearby. The other two were out of town dealers.

We called each one and “placed our order.” We told them exactly what we were looking for…and asked them to get back to us with the total walk-out cost for the vehicle.


This is where things got a little tricky.

Some of the dealers gave us the real walk-out number. Others gave us the car sales price—but failed to include other “mandatory fees or options.”

Why? For one, it makes their price look lower, and that’s more likely to get you on their lot. And once you’re on their lot, they know they have a better shot at selling you a car.

They also have a better shot at tacking on those extra fees.

Dig deeper to determine the real price. Beware of common dealership tactics like talking in circles and leaving out key pieces of information regarding their ‘final’ price.

Although it might seem counterintuitive, one way to do this is to avoid price talk altogether.

Weird, right?

But when you focus solely on the vehicle itself, overemphasizing any reservations you have about it, chances are you’ll find the dealer ‘compromising’ on several components of the price – components you might not have realized existed – in a bid to keep your business.

In our case, one dealer we called quoted us $1,500 less than the rest.

We might have been happy with that. But after digging deeper we found that they forgot to mention the $795 car monitoring system—non-negotiable.

This car monitoring system only costs the dealer about $100, so it’s a nice profit for them. Not to mention an effective tactic to bring you on their lot.

But, their total price was still lower than the others, so we kept our appointment.


When we arrived on the lot our minds were pretty well made up. It was straight to business.

At this point, the dealer knows you’re serious, and the price conversation can commence. But if the first thing they want to talk about is your new monthly payment, pump the brakes.

Dealers know most consumers focus on the monthly payment. It’s much easier to stomach a few hundred dollars added to your monthly budget than to imagine thousands of dollars looming over your head.

And that’s great news for the dealer.


It’s easy to manipulate the monthly payment number because there are so many variables involved. Everything from the length of the loan to the type of warranty you purchase will have an impact, and the final number will almost always be higher by the end than it was at the beginning.

Keep the conversation firmly rooted on the total price of the car. If you’re able to calculate your monthly payment based on the price and interest rate as you go—even better. That means you own the conversation.

Come to the table with a number in mind and give yourself plenty of wiggle room.

Don’t be afraid to be firm on this. If the total price is what you want it to be, the monthly price should follow suit.


The dirty little secret of car dealers is how much of their profit comes from fees, financing, and aftermarket service…and not from the actual sale of a car.

But if you think about it, this makes sense. Car dealerships are everywhere—both physically and online—so it’s become relatively easy to shop and compare the price of the actual car.

Their money is made off of everything that goes into car buying…and financing is one of the biggest.

So after agreeing to move forward on the new Jeep, we sat down with our salesman and started the paperwork. Things were going smoothly, until we told him that we would be financing through my credit union. There was a pause.

To receive the lower price you have to finance through the dealer, he told me.

No big deal, I thought. I was pre-approved through my credit union with financing that matched any rate as low as 1.99%. So long as the dealer matched my 1.99% rate, things were all set.

I told him that.

He said he needed to speak to his finance manager on this one…and that’s when things started to get out of hand.

What I realized is that this dealer wasn’t going to make what they wanted on 1.99%. That simple fact shifted the whole conversation, and what had started off as a relatively straightforward process became a battle to part us from our money.


Have you ever noticed how finance managers at dealerships are ensconced in glass towers with no visible door?

It’s like they’re Lord Sauron, the evil, fiery eyeball in The Lord of the Rings.

There’s a reason for this, of course…

The Lord Sauron tactic sets up the salesperson as a go-between, and installs the physical presence of a mysterious, unassailable authority.

What are they doing back there?

Trying to figure out an offer that you will accept. If you’re there at a peak time, this can take a while, since the finance manager is probably working on multiple deals at once.

Even if you’re there at 8:30 am on a Tuesday morning, they still might leave you sitting for a while.

Be patient. Stick to your guns. You’re still in control of this process. Don’t feel bad if the salesman has to run a 5k going back and forth between you and the sales manager. They’ve designed it that way on prupose.

They want you to believe Lord Sauron has the final word. But he doesn’t…

You do.


50 minutes later we were told that things were good. Next step? The finance department—not Lord Sauron, but a subordinate in a cubicle. Surely, we are approaching the finish line.

But nope—we had to wait for another hour!

The waiting game is by design. Trust me on this. What’s happening is you get tired, frustrated…and you just want the whole thing to be over and done with.

The thought of leaving and coming back—or going to another dealer and starting all over—is too much to consider.

That’s when the dealer has you where they want you. And the aftermarket guy makes his approach.

Great! You think, now we’re moving.

And you are…right into the fast lane of upgrades.

Although I was pacing and fuming—and my dinner reservations were out the window—I took a deep breath and settled down. I knew I still needed my wits about me for this next part of the process.


Finally, it was our time to ink the deal. I figured it would take 20 minutes to autograph the docs and we were on our way. Boy, was I wrong.

I realized why we’d been waiting so long. Knowing they couldn’t make enough money at 1.99%, the finance department had been prepping sales materials.

They pitched credit life…disability life…car protection packages…extended warranties…and more.

All of these extras fall into two categories.

1) Insurance to pay for convenient services that are only convenient should something catastrophic happen, or…

2) Flashy features that sound great on paper, but do little to improve the value of the car.

Remember that this is where the dealership makes their money. So while picking out the vehicle might have been a back and forth negotiation, this part is a full-force sales assault. Plain and simple.

The first thing the after-market guy does is make every added feature seem enticing—necessary even! Anti-theft devices and special tech features sound good, but really, you can find all of these options for much cheaper elsewhere. That’s when they hit you with the second thing.

It will only increase your monthly payment by a few dollars a month!

We’ve come full circle back to the monthly payment ploy. Even an extra twenty dollars per month added to your monthly payment piles up over time, and before long you’ve paid MUCH more than you would elsewhere.

Needless to say, I said no to all of it. Don’t fall for these overpriced options.


It was finally time to sign the contract and take the car.

This is where they flip the script. Once you get down to the real, FINAL paperwork, the dealer wants as little hassle as possible. They’ve almost got you—they can smell the commission on the way. Suddenly the waiting game feels like a blurry sprint to the finish line.

So I slowed things down… pulled out my calculator…read the prices of every line on the contract.

I searched for anything the dealer added that was not required. To be fair, most of the expenses were required and very normal…things like the title and registration fee, sales tax, etc.

Then I saw something I didn’t like—a line that said “Document Fee” for $150.

I was told that the document fee is only there to pay the secretary (well, the actual phrase was “the ladies upstairs”), and my salesperson had never disclosed this.

Folks—upfront means upfront.

So even though the dealer could not drop the fee (they claimed they would be sued), what they could and did do—because I insisted—is drop the sales price $150.

“A successful swindler has to be a great salesman even more than a great actor.”

– David Suchet

Over two hours after entering the dealership we were finally done. I went in prepared, did my research, negotiated the best price before even walking into the dealership, and arranged financing beforehand.

Yet, even with all that, I was taken through the “sales process.”

Next time? I’ll take my own advice and buy used!



Are you Retirement Ready? Take the QUIZ here to find out. Byron W. Ellis, CFP®, CLU®, ChFC®, CRPC®, is a CERTIFIED FINANCIAL PLANNER™ professional and Managing Director United Capital Financial Advisers, LLC, a Financial Life Management firm. The information contained in this article is intended for information only is not a recommendation and should not be considered investment advice. Please contact your financial advisor with questions about your specific needs and circumstances.

© Byron Ellis