Negotiation Tips From Honest Car Dealer

How to Spot and Avoid the ‘4 Square’ Price Negotiation Tactic

Buying a new car can be a stressful experience. Many buyers are very concerned about getting a good deal and the possibility of negotiating with a salesman. Car salesmen have been trained to make a deal appear great, when in truth it benefits the dealership more than the buyer. However, if you are well-informed you can avoid these tactics. Buying a new car doesn’t have to be stressful as long as you do your research, and Honest Car Dealer is here to help.

What is the ‘4 Square’ Tactic?

purchasing a carCar salesmen have several sales tactics they use regularly, one of the most commonly used tricks is referred to as the ‘4-Square Method’. In this method the sales person uses a piece of paper that has four boxes marked trade value, purchase price, down payment and monthly payment. When using this tactic the salesman will say this paper will assist the customer and the dealer come to an agreement.

When you sit down to negotiate this document will be the first thing you are presented with. The paper will mostly likely have a statement at the top saying the buyer will purchase a car on that day if the numbers are agreeable, and the dealer will have you initial next to this statement. The sheet will then be taken away to a sales manager who will fill in the boxes and send it back with the sales person, who will review each box with the buyer. If the buyer appears displeased, this will be acknowledged but basically ignored.

Essentially, the sales person wants the buyer to focus on all the other numbers except for the price. Buyers will oftentimes be unhappy with the low trade-in price and the amount of the down payment, and they will forget to look at the actual price. The buyer will then be asked which numbers they aren’t happy with and most times they will say the down payment and then the trade-in value. The sales person will probably fold the paper in half and leave only those two boxes showing, but not the actual price. They then haggle over those numbers and in the end the buyer thinks they got the deal they wanted, though the actual price of the new vehicle was left unchanged.

How to Get the Deal You Want

Get your own financing. In-house financing at the dealership often puts you at a disadvantage. Visit your local bank or credit union for financing and arrive at the dealership with that completed. The salesperson might be more forthcoming about details if they don’t have to negotiate payments with you. They may still try to beat the interest rate your bank offered.

When negotiating, focus on the price of the vehicle. With your loan secured you know what you can afford, which allows you to haggle more effectively. 

September 8, 2012 by Jamie Rettig