Bad Credit Blog

Verbal Tricks Salespeople Use To Confuse You And Make You Think You’re “Getting A Deal”

Car negotiating is extremely stressful. What most people don’t realize however, is that “the grind” you go through is a tactic dealerships use, on purpose, to maximize profit from you!

As an ex-car salesperson (or is it a reformed car salesperson?) in Phoenix, I know the verbal tactics dealerships use during the car negotiating process to create confusion and diversion - designed to get you to say “yes” to buying that shiny new vehicle for the absolute most they can get out of you!

Here are the three most common verbal tricks salespeople use during car negotiating to confuse you and maximize their profit.

Verbal Trick #1 - “If I Could Get This Vehicle In Your Price Range”

Phrases like this are better known as giving you “hope for gain.” You hope that the price is right. You hope the payments fit your budget. Whatever your trigger is, the salespersons job is to focus in on that and give you hope that it can be achieved.
For instance:

Good news! You’re looking over the lot and you see the perfect truck. It’s low miles and clean inside and out. Bad news! It’s about $2,000 more than you’re budgeted for. The salesperson sees that you’re in love with this truck, so they ask, “if I could get this truck around the price you want would you buy it today?”

Naturally you think that the salesperson is offering to discount the vehicle. But pay attention to the words, “if I could.” A promise was NEVER made to discount the truck. In fact, nothing has been promised at all! You were given hope that the truck will be discounted to fit your budget, but never actually promised anything. And this is before any car negotiating has truly begun!

How To Counter This

1. Know what make, model, year, etc. you are looking for and basic prices by shopping online first. Better yet, work through. Get the vehicle you want without having to shop all over town. If you’re looking for a used car know the approximate resale values by looking in Auto Trader or at dealerships inventory online.
2. Get pre-approved! A lender like RoadLoans or HSBC Auto can pre-approve you and the check is sent overnight to you to use at any dealership. When you are pre-approved you know your budget and the salesperson won’t be able to convince you to purchase a higher priced vehicle.
3. DO NOT walk on a car lot assuming that the dealership will come down by $3,000 or $4,000 dollars during the car negotiating. Most cars today are not marked up that much. Ask for a discount of $1,000 to $1,500 and you should get it. This will leave $500 to $1,000 profit for the dealership (that’s reasonable) and you’ll get a good vehicle for a fair price.

Verbal Trick #2 - “If I Can Get Your Payments Around Where You Want Them Will You Buy Today?”

This “hope for gain” tactic usually happens during the second or third pass in the car negotiating process.

For example:

You are budgeted for $500 payments and tell the salesperson that up front (bad move by the way. Discuss payments LAST not FIRST when car negotiating).

The salesperson presents you with payments at $750 a month. You tell him that you can’t afford the car at that payment and reiterate your $500 budget. If you hold your ground during one or two more attempts to bump you by the salesperson they will usually ask, “If I can get your payments where you want them will you buy this vehicle today?”

Once again, listen to the words. A promise is NOT being made to get your payment exactly where you want it. Any good salesperson will tell you that the term “around” means $50 to $100 a month higher than you are asking for in payments!

How To Counter This

1. If you want to go purchase a vehicle from any dealership you choose the best thing you can do is get pre-approved from a lender like RoadLoans or HSBC Auto! Then crunch the numbers and see how much vehicle you can purchase to fit the payments you want BEFORE you go shopping. Why? Because by shifting interest rates or stretching payments the dealership can usually get within range of what you want for payments without discounting (or minimally discounting) the vehicle.
2. During the car negotiating process take each element of the sale piece-by-piece. Get them to agree to a purchase price FIRST. Then a trade-in value and finally lock in the payments - which should be easy if you are pre-approved.
3. Never talk about payments until the very end of the car negotiating process. If a salesperson asks you “how much you were hoping your payments to be?” don’t answer them. Just keep focused on the price of the vehicle. By diverting you to payments the salesperson can take your focus OFF how much they are charging you for the vehicle, the REAL value of your trade-in and the interest rate they are charging. Through interest rate manipulation, stretching payments or talking you into more money down they can reap a larger profit for themselves!

Verbal Trick #3 - “We’ll Pay Off Your Trade!”

The final hope for gain tactic during car negotiating goes something like this: “OK. Mr. or Mrs. Smith. Here’s the price of the car, and with your trade-in, tax and documentation fees, paying off your trade, your payment is $700 a month.”

Often you hear this phrase “paying off your trade” used in advertising. “Bring in your car - no matter what you owe - and we’ll pay it off!”

This word trick is designed to make you think the dealership is offering you exactly what you owe on your trade-in vehicle - no matter what it’s actually worth! So, with a subtle phrase they leave you with the impression that if you owe $14,000 on a car that’s worth $10,000 they will give you $14,000 for it anyway.

Here’s what they are really saying:

Your trade-in will be paid off, by using what they give you in trade, and rolling the remaining amount into your new car loan. When the money comes from the lender for your new vehicle, the dealership will “pay off your trade” by mailing them a check!

How To Counter This

1. Know what your trade in is worth. A simple visit to Kelley Blue Book or Edmunds will give you an approximate value of your trade-in. Keep in mind that these are estimates only and actual values may vary by market. But if during car negotiating the dealership is offering you thousands less than Kelley Blue Book says your vehicle is worth walk out of that dealership - fast!
2. Keep focused on the price of the car and the actual amount they are offering you for your trade while car negotiating. Instead of focusing on payments, which can be manipulated based on lowering the interest rate and stretching the payment out, negotiate on the price and real trade-in value.
3. Get pre-approved. Once again, pre-approval from a major RoadLoans or HSBC Auto is your best bet. This way you know exactly how much you can spend on a car and what your payments will be. It takes the dealership out of the drivers seat and puts YOU in it!

Don’t be fooled by word tricks! Listen to what is being said and get everything in writing! Most importantly - Get pre-approved! This one thing will truly put you in the drivers seat during negotiation!

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Why Dealerships Use Them And How They Are Designed To Confuse You

When it comes to car negotiating, car salespeople are masters in the art of diversion. Using tricky phrases or writing on paper with arrows and cross-offs, all designed to confuse you and take your mind off the bottom line - the actual purchase price of the car!

As an ex-car salesperson (or is it a reformed car salesperson?) in Phoenix, I know the car negotiating tactics dealerships use for confusion and diversion - designed to get you to say “yes” to buying that shiny new vehicle for the absolute most they can get out of you!

So what exactly are these tricks and how can you counter them and keep the control in your court? That’s what this article is all about. Let’s get started . . .

So, you’ve found the vehicle you want and you’re ready to start the car negotiating process. The salesman takes out a piece of paper and draws a large plus sign on it. This is called the “four square.” In the first square he writes the sticker price of the vehicle. In another square he writes your down payment. Then he leaves to “talk with his manager” assuring you he’s going to work you a great deal!

After making you wait what seems like an eternity (another tactic designed to make you anxious) he comes back with a big grin on his face and says “good news!” and puts down the paper. The remaining two squares are filled in with the trade value and payments.

This is where things quickly begin to go south in the car negotiating process. The trade value is usually WAY TOO LOW and the payments are WAY TOO HIGH.

Don’t be fooled! This car negotiating tactic is designed to throw you off balance. The salesman’s job at this point is to get a signed commitment “bumping” you up from the original down payment and payments you want.

Here’s how he does it:

You’re looking at his sheet and getting nervous thinking you can’t afford this vehicle! Then he asks you, “What payments were you hoping to get?” Or “What were you thinking your trade-in was worth?” These phrases are designed to plant doubt in your mind. Maybe you thought your trade-in was worth more than it is . . . Maybe the payments you want are not reasonable for this vehicle . . . maybe you need more money down.

For instance:

He says you can purchase the vehicle for $700 a month and you wanted $500. You think you’re miles away so you say, “Well . . . . I can afford $570 if I budget myself.” So, already you’ve come up a bit more than you already wanted.

Also, during this phase of the car negotiating process he’s taken your focus OFF the primary goal - the PRICE of the vehicle you want to purchase! Now, instead of talking “purchase price” - which translates into less profit for him, he’s got you looking at “payments” - which translates into more profit for him because he can control those through stretching the term or changing the interest rate, without touching the price!

Taking the “four square” sheet he writes down $570, then asks the next question “Up To?” Meaning, $570 to $600 maybe? So, the salesman writes down something like “I will buy and drive right now for $570 to $600 a month” and asks you to sign it. Then he goes back to “talk to his manager.” So you see, already he’s bumped you up by $100 a month, and hasn’t even discounted the vehicle yet!

You’re thinking, well, to get to that payment he’s going to have to come up in trade value (which is usually about $1,000 to $2,000 more than he quoted you) or come down in price (which is a last resort). But even if he comes up in trade value, he’s low-balled you on it anyway, so he still hasn’t LOST any real profit. And the truth is, YOU haven’t even begun car negotiating because HE is controlling the entire situation!

After waiting another eternity (another car negotiating trick) he comes back with more “Good News!” He’s gotten his manager to increase your trade-in (or discount the car) by $1,000! Wowee! This lowers your payments down to $675! And it’s all written nicely on the four square sheet and circled and initialed by the manager to look official.

Now you’re starting to get tense and a little overwhelmed. You state that you just can’t afford that payment and start to get up. The salesman sees his commission going out the window and stops you. He says, “If I could get the payments around where you want them will you buy the vehicle?”

Listen to the words again, “around where you want them.” In car negotiation-speak this translates into about $35 to $50 more than you’ve already committed to.

At this point he whips out his sharpie pen and starts drawing circles. Saying things like, “Well, to get payments around where you need them we need to come up in trade or down in price. I need to talk to my manager and see what he is willing to do to sell this vehicle. Obviously we’re a long ways apart.”

Here he’ll start drawing arrows from payments to trade-in, etc. He’ll write down your payment ($600, NOT $570) and then he’ll circle it, and cross it off (another car negotiating trick: subtle implication, don’t count on it buster).

This is where the second “bump” comes in. He’ll say, “If I can get my manager to come up in trade or down in price, can you come UP in down payment? Remember, each $1,000 down equals about $25 in payments (which isn’t necessarily true).”

Once again, focus is OFF the price of the car and ON the payments, which can be controlled through interest rates and stretching them out! You’re still at or around full sticker AND your trade has been undervalued by probably $1,000 (still), and you’re growing more tense by the minute - which hampers your ability to focus.

So you say, “well . . . we can give you an additional $1,000 if we eat dog food for a month.” And he writes that down.

Then he scribbles another “commitment” on the paper and asks for your signature. By now the “four square” is looking a little ragged with numbers and arrows and slash marks everywhere. You’re thoroughly confused and tense thinking that maybe you can’t afford this car - and you really want it!

In terms of car negotiating he’s got you right where he wants you. He’s bumped you up in monthly payment, up in down payment, he’s still holding back on the trade value (if it’s worth $2,000 and he gives you $1,000 - that’s considered an additional $1,000 profit for him too), AND he hasn’t touched, or only slightly touched, the price of the car!

I could go on and on and on about these car negotiating tactics. Suffice it to say, they are designed to confuse you, sell you the vehicle for it’s full price and steal your trade for less than it’s really worth. At some point a sales manager steps in and pressures you to increase your down payment or monthly payments also. And by this time you’re tense, excited, nervous, and who knows what else!

So, how do you keep the ball in your court and control the situation?

First and foremost - Get pre-approved! A lender like RoadLoans or HSBC Auto can pre-approve you and the check is sent overnight to you to use at any dealership. This is the easiest way to take the wind out of their sales. When you are pre-approved it puts you in the drivers seat because YOU control the negotiating on the PRICE of the vehicle and the VALUE of your trade-in.

Shop online first! Better yet, get pre-approved from a lender like RoadLoans or HSBC Auto who will connect you directly with a dealership that will work with you and not jerk you around. This way you’ll be working one-on-one with a single salesman and he’ll know up-front what you can afford and help you accordingly.

Know your trade-in value. Visit Kelley Blue Book, Edmunds, or check out your local Auto Trader to see what similar vehicles are selling for. Then hold them to that value no matter what! Often lenders who pre-approve you will also give you a good estimate of your trade-in value to help you when car negotiating.

Once pre-approved, don’t let the dealer talk you into “pulling your credit to see if he can get you a better interest rate.” Once again, this puts the ball in their court because with another lender perhaps they can lengthen payment terms and lower your monthly payments without discounting their vehicle.

Shop with a friend or someone who is a good negotiator. Then - listen to them when they give you advice about what to do or say!

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Car buying can be an extraordinarily stressful experience if you don’t know what you’re doing. It’s like playing a game where only one side knows the rules. And that side is the dealership. So to even the playing field here’s some simple car buying rules to help you truly get the best deal on your next car.

Once you’ve found the car you want, it’s time to sit down with your sales rep to negotiate the terms of your contract. After a little back and forth on price, figuring out your interest rate, and calculating your monthly payment, you’re ready to sign on the dotted line, right? Not so fast. You’ve only taken the first step in car buying.

When you read the fine print you may find that additional fees and charges have found their way into your contract – including add-ons you didn’t necessarily ask for.
Most people in the middle of the car buying experience are so focused on getting the best interest rate and negotiating the most affordable monthly payment that they’re unconcerned with the fine print of the contract. By the time they get to the step where they review and sign the paperwork, if the sales rep is throwing industry terms at them that they don’t fully understand, they become exhausted from the entire process and just want to get it over with.Here are a few insider tips to make sure you don’t regret signing those papers.

First Rule Of Car Buying - Read the Fine Print

While this seems pretty obvious and self-explanatory, it’s amazing how trusting the car buying consumer can be. Honestly, the last time you bought a car, did you read and fully understand the contract before you signed it? Probably not. Most people don’t. Some unscrupulous car dealerships are betting on that.

Because most people don’t read the fine print, some sales reps can slide in additional, undisclosed charges or extras with huge mark-ups to their profit.

Also, make sure there are no blank spaces on your finance contract that can be filled in later - wherever there are blank spaces, write in “$0″ or “N/A.”

Second Rule Of Car Buying - Typical Extras

Most of us are familiar with learning about the standard features of a vehicle and then figuring out which additional features we are willing to pay extra for. But here are some extras to look out for when reviewing your contract

• Fabric protector
• Car alarm (this includes LoJack)
• Paint sealant
• Credit life insurance
• Window etching
• Extended warranties
• GAP

The value of such extras depends on individual customer needs and situations. If the sales rep attempts to tell you that some or all of these extras are “standard” for every vehicle on the lot, ask to order your car from the factory, or suggest the dealership trade with another dealer that hasn’t pre-packaged their vehicles. Extra products can add thousands to the negotiated price of the vehicle.

The Problems With Extras Occur In Two Areas

First - Rather than suggest specific extras individually priced, the sales rep lumps all the products together and pushes you to buy them as a package.

Second - Unscrupulous sales reps can add thousands of dollars to the amount financed for these products, but not disclose the price increase until the last possible moment, when the financing contracts are being signed.

Ask for a Menu System Disclosure

The best disclosure method I’ve seen in years involved using a menu system. On a separate sheet of paper the rep produces a document that includes:

• The negotiated price of the vehicle or trade difference
• The additional price of suggested extras (these can be shown as various option packages that may save money when bought in combination and as individually priced options)
• New totals initialed by both parties. This procedure makes sure that any suggested extras are properly explained and disclosed. It also allows the customer time to consider each item separate from the longer and potentially confusing finance documents. The final numbers from the menu should get carried over directly to the finance document.

Your best bet when car buying - as always - is pre-approval for a vehicle loan. With pre-approval you will know how much you can afford for a new vehicle, and will be able to leave a little room for warranties and GAP, without getting duped by the dealership into purchasing unwanted items and paying for them with higher payments or longer terms.

If you want to purchase from any dealership you choose then we highly recommend getting pre-approved for a loan from RoadLoans or HSBC Auto.

If you want to work directly with a dealership that has a relationship with the lender then DriverLoans or Harbor Credit are great companies.

All of these lenders are major nationwide banks. They will treat you right, regardless of your credit situation.

Your wallet does not have to go through the ringer when purchasing a new vehicle. You can protect yourself from blindly signing an unfavorable car deal by doing your homework, going to a car dealership with a good reputation, being prepared, asking questions, and double checking behind your sales rep.

By Scott Conklin

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No one wants or expects to get duped by a car dealership. Unfortunately, it happens more often than it should. If you’re in the market for a new vehicle, protect yourself by recognizing the most common car dealer tricks and traps.

Scams happen on the car lot everyday. These aren’t the clever and amusing schemes you’ll see in movies like Catch Me If You Can or Matchstick Men. Car lot scams are nothing more than simple, petty tactics used by unethical dealers to trick you into spending more than you have to. You can avoid this by being Pre-approved before going car shopping .

Dealers love to say that they’re looking out for your best interest; but they aren’t always sincere. Here are some things to watch for:

VIN etching. Your dealer might recommend having the car’s windshield etched to deter theft. Not a bad idea, but politely decline if he wants to charge you a premium for the service. You can buy a VIN etching kit online for $20 to $30.

Loan guaranty. Ignore any claim that your dealer makes about paying off your loan if you find yourself unable to meet that obligation. If you default and the dealer pays it off, you’ll end up owing money and fees to the dealer instead of to the bank. Either way, your credit rating will be shot.

Affordable payments. Some dealers will want to negotiate with you on the car loan payment , rather than on the price of the car. They might say that they’re trying to make it more affordable for you. But it’s more likely that they’re trying to confuse you into paying too much. What’s another $1,500 when you’ve already agreed to pay $25,000? Some dealers like to strong-arm you into paying more by adding in fees after you’ve already agreed on a price. Here’s how they do it:

Dealer prep. Every dealer will try to charge you dealer prep costs. Your job is to know ahead of time what the standard costs are for that car by checking an Internet site, like Edmunds.com. Try to negotiate these as low as possible. And never pay more than another dealer would charge, or more than what’s listed on the sticker.

Extended warranty. It’s your decision to purchase or not purchase an extended warranty. Period.

Bait and switch APR. You buy the car and take it home. A week later, you’re notified that, due to a problem with your loan approval, your interest rate and monthly payment are being increased. The bait-and-switch APR scam is one of the most frustrating tricks a dealer can pull. Avoid this by arranging for financing before you walk into the dealership.

In this storyline, it isn’t the con artist who’s the clever one-it’s you. Keep an eye out for the warning signs and head for the door if you suspect someone’s trying to rip you off.

Ref: MortgageLoan.com

BY: Catherine Brock

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What is a car loan refinance? A car loan refinance is a similar concept as refinancing a home . When you refinance a car loan, you pay off your current car loan and replace it with a refinance car loan with a new lender at a different (generally lower) rate. If you have purchased a car and were given a loan with a high interest rate, you may want to think about refinancing your auto loan for a lower interest rate. Refinancing your existing car loan can save you money each month by lowering your car payments.

Is an Appraisal Needed to Refinance a Car Loan?

Some people think an appraisal is required to refinance their auto loan. This is not true. When you refinance your home, you do need to have an appraisal since the loan is based on the equity in the home. With a car loan refinance, the loan is based on how much money you need to pay off your current car loan, not on the value of the car.

Bad Credit Auto Loan Refinance

If you had credit problems, refinancing a car loan might be a good option for you. You may have accepted an auto loan with a high interest rate because of a bad credit history . But, if you have maintained a stable job since you bought the car and have been making consistent, on time payments for a year or more, you may be able to lower your current interest rate. It’s worth looking into it.

Car Refinance Example

If you financed a car loan for $20,000 over 5 years at an interest rate of 17.32% APR, the car loan payments would be $500.50 per month. If you were able to refinance this auto loan after twelve months and decreased the interest rate to 12.43% APR, the monthly car payment would drop to $457.80. By refinancing your auto loan, you would save $42.70 per month. This equates to a savings of $2,049.60 over the remaining 48 months of the loan, assuming all of the installments were paid on their due date.

HSBC Auto Finance HSBC Auto Finance is a leading provider of financing for new and used vehicles and has products that serve the full spectrum of credit consumers. HSBC Auto Finance originates or refinances auto loans through direct solicitations, the Internet and alliances. They are one of the top auto refinance companies in the US. If your interest rate is above 12% then give HSBC Auto Finance a call and see if they can get you a lower interest rate today!

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As interest rates drop, people’s thoughts turn to refinancing - refinancing their home loan, that is. What they don’t know is that refinancing an auto loan is easier to do, and it can save you some serious money.

How much? Say you bought a new car six months ago. And say there were a few dings on your credit so the dealer told you that your auto loan would be 11% on a five-year loan for a $23,000 car. Your monthly payments are $500.

Now let’s say that you surf the web until you find a company that offers auto refinancing. You could refinance the balance of your car loan and lower your payments to about $400 a month. That’s a savings of nearly $6,000 over the life of the loan!

Other examples could well be more dramatic. In some cases, a new-car buyer could wind up with an auto loan based on an 18% interest rate. By refinancing at a competitive rate, the monthly payments would be slashed, and all it takes is about 10 minutes to fill out the application.

So what kind of consumers should consider refinancing their auto loans? An industry expert I spoke with identified the four types and gave them each a name:

The Saver: This type of customer is always keeping an eye on the Fed (Federal Reserve) and when interest rates drop, he begins shopping for a way to improve his personal financial picture. He may also consider refinancing when his credit score has improved, which could enable him to qualify for lower rates.

The Newly Educated Remorseful: A car owner may have recently bought a new vehicle and financed it through the dealership. Then, a neighbor or friend innocently asks, “So what interest rate did they give you?” The car owner goes back to her contract and finds that the dealer made a pretty penny on her by marking up the interest rate by several percentage points. Buyer’s remorse sets in…and the search for a new auto loan begins.

The Budgeter: This customer may have bought the car on a short-term loan — say, two years. The payments are high but affordable. Now suppose this customer’s economic picture changes — he buys a house, for example — and his monthly expenses shoot up. He looks at that auto loan and wants to spread the payment out over a longer period of time. Refinancing the auto loan is just the ticket to do that.

So, if refinancing is such a great move, why don’t more people do it? Possibly, they anticipate the same kind of application-heavy process found in refinancing a home loan. Or it could simply be that people don’t know it is possible. After all, the only risk is the 5-10 minutes it takes to fill out the application. Make sure, however, that no points are charged for the refinance process.

Remember, as the federal interest rate drops, auto loan rates follow. Why throw that money away paying interest? Join the wave of the future and refinance that auto loan today!

Ref: www.Edmonds.com

For more credit help, please visit our site. We have been there and know how bad credit can affect everything, including your health. Take a look!

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