Car Buying Scams, Auto Dealer Executive Breaks Code of Silence!

Transcription

1 Car Buying Scams, Auto Dealer Executive Breaks Code of Silence! Complete Mind Numbing, Shocking Exposé on Every Psychological Trick, Scam, and Take Money Out of Your Wallet Scheme That Goes on at Your Local Car Dealership! Never before has such a high ranking insider a General Manager confessed to the sleazy tactics used by car dealers and made them public! 1

2 Table of Contents Introduction Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 5 Chapter 6 Chapter 7 Chapter 8 Chapter 9 Chapter 10 Chapter 11 Chapter 12 The fastest & easiest way to purchase an automobile! Skip the slick car salesman! How to find Invoice, Hold Back, Rebates, Dealer Cash and all the good stuff! How to get the most $$$ for your trade in and how dealers appraise your car! How to cut thru the bull! What happens to buyers who shop thru the sales department! Don t buy a lemon! Everything you need to know when purchasing a used car! Car dealer sales scams! The Art of Psychological Warfare from the dealer s perspective! Finance scams! The truth about what happens inside the Finance Managers office! More red hot car dealership scams! The simple facts about auto leasing! The software you need if you re going to lease an automobile! The cold hard facts about bad credit! How to buy a car without the dealer knowing your credit rating! Hush-hush secrets of the car business! How car dealers rip off their own employees and how they are set up internally! Your express Action Guide. The car buying process laid out fast and simple! Video Links are located on page 4 This e-book MAY NOT be copied, sold or distributed without prior written consent from the author. This e-book is copyrighted material. Anyone who attempts to copy, sell or distribute in any way, shape or form will be prosecuted! Peter M. Humleker Jr All Rights Reserved 2

3 Introduction Inside this manual you will find information that has never been made public until now. You are about to embark into a world that is like nothing you have ever read about before. Yes, there are plenty of books about the car shopping experience and how to buy a car, etc. However, this book will go behind the scenes and strip away the veil that is shown to the public. It will reveal what is actually going on behind all the closed doors and whispers inside auto dealerships! The industry of the car business is like an island unto itself. The inner workings are things that are never spoken about to the public. This book goes against the grain and exposes everything under the sun when it comes to auto dealers and their practices. You will learn everything you need to know about auto dealerships as well as everything you need to know about how to purchase an automobile for the least amount of money. Not to mention you will also find out everything you need to know about what to do before you buy and after, as well as all the information you need regarding the aftermarket products such as extended service contracts, GAP insurance etc. Don t be surprised that you won t find this book being advertised on radio or TV. Why? You ask. Good question. You see auto dealerships are the biggest advertisers in local newspapers across the United States. They also are the biggest advertisers on radio and television as well. The actual car manufacturers are also one of the biggest advertisers on TV and print. What does all this equate to? When a consumer advocate, especially an auto consumer advocate, comes on the radio for an interview, the local dealerships get very upset. They simply apply pressure to the radio stations and threaten to pull advertising. Of course, the radio stations listen to their top sponsors. Needless to say, you don t hear many auto industry consumer advocates on the radio being interviewed. 3

4 When the writer was living on the West Coast, there was a lawsuit brought against the biggest and most well-known auto dealer in the state. It was huge news, because it involved racial epithets and several of his employees suing him. However, the problem was that this particular car dealer was the #1 biggest advertiser in the local paper. Needless to say, the paper never even ran a story until after one small outlying newspaper already blew the lid off of the entire ordeal. Then they finally ran a very small story and buried it in the back of the paper. That s a picture of the power of advertising, at least the power of the one paying for the advertising that is! If you hear about this book either by the radio, TV or print then you know that the source is unbiased and consumer-oriented. I hope you enjoy my book, and it is my wish that you will save a great deal of money the next time you purchase an automobile! Sincerely, Peter M. Humleker Jr. Consumer Advocate Video Links When you click on a video link, if the audio starts playing before the actual video don t freak out! Simply wait for the video to load and then click on the button going across the bottom of screen and move it to the beginning and the video will start again in full. This video is on finding incentives and rebates: This video is on finding out the invoice price and true market value: This video is about the Educated fax: This video is about determining your used car value: 4

5 Car Coaching Program Congratulations and thank you for making a wise decision in investing in this e- book. I hope that you will pass my web site along to your family, friends, and colleagues. If you have not done so yet, be sure to sign up for my newsletter, because I will keep you informed of all updates to the e-book as well as answer your questions about the car buying experience and the auto industry. I also send out information from other consumer advocates and their products as well. This insures that you will always have the chance to educate yourself and never be a victim again of fraud, deceit or rip-off practices and scams. To subscribe to my newsletter The Scam Alert News simply go to My newsletter is free, and you can always unsubscribe at any time! I doubt you would want to with all the important advice you are going to receive on scams from many different industries. Some of the industries we will keep you up to date on are: auto industry scams, mortgage scams, furniture scams, credit card scams, auction scams, and many other areas that will affect your life in one way or another. When you have a question, send it to mailto:peter@carbuyingscams.com. Many times I can answer the directly, and if not I will answer it in my newsletter. Do not forget that you have six-months membership to my car buying coaching program. It starts on the date that you purchased this e-book. When you have a question about your car buying process then it to mailto:peter@carbuyingscams.com The car buying coaching program works as follows: If you have a question about your car buying experience then me at the private address of mailto:peter@carbuyingscams.com. I will answer your questions as fast as possible. I can only answer questions about the car buying process. I cannot give you advice on what kind of car you should buy or whether or not you should get a van or SUV. These are questions that are a personal choice that only you can answer. Hot Tip: When you read this e-book, do it with your Internet browser open so that when you click on one of the links in the book, it can take you directly to that web site. Then you can bookmark it into your favorites and go back to it later. I look forward to helping you the best I can! 5

6 Disclaimer: I give many examples of fraud, deceit, and different examples of stories of what goes on in auto dealers today. This book is from my own observations while working in the automobile business for 6 years, the last 4 1/2 in management. Is every single dealer in America doing the practices that I explain about in this book? Of course not. If you search hard enough you will find a few honest ones out there. Just like there are some honest sales consultants and managers in the car business. The point I am making is don t throw the baby out with the bathwater. In every profession there are always the few, the proud, the Marines! Oops, I got carried away. (I did my time, U.S.M.C ). What I meant is that there are always a few good people in any organization or profession that has a reputation for being crooked or dishonest. The problem lies in finding those few people. ABC Motors is a fictitious name. Peter M. Humleker Jr. Consumer Advocate Version 6 6

7 CHAPTER ONE The word Fleet may or may not sound familiar to you. This first chapter is about the Fleet Department that large dealerships have and how it can save you massive amounts of time and energy. Basically it boils down to this: The fleet department in an auto dealership is set up to only sell to businesses that purchase vehicles in bulk and typically they buy the cars at invoice. For example, when your local city wants to purchase ten brand new trucks they do not deal with a car salesman like the public. Instead they call directly to the fleet department and get a bid in writing for the trucks. They deal directly with a fleet manager, and he does all of the paper work involved for the entire transaction. The fleet department also sells to other businesses that purchase vehicles either one at a time or several. Here is the real kicker! You do not have to have or own a business to buy from the fleet department! They also sell to individuals at the same discounted prices; it s just that not too many people know this information. Anyone can purchase from the fleet department, but not every dealership has a fleet department. If you live in a city with a population of over about 25,000 people, chances are that your local auto dealer will have at least one person assigned as the fleet manager. If you live in a large metropolitan city, basically every dealer will have several fleet managers who can assist you. Purchasing from the fleet department is by far the easiest way to buy a vehicle and bypass the salesperson! When you go online to inquire about purchasing a vehicle or you speak with your local auto broker, who do you think they purchase your vehicle from? Yes, you re right! It s from the fleet department in the nearest city to where you live. Why is buying from the fleet department far less expensive than buying from the sales department? The fleet managers are paid differently than the sales consultants. They are paid from true dealer cost. There is very little if any advertising budget for fleet departments. Fleet managers work on a higher volume and less profit plan of action. They are the wholesalers in the auto industry. The Educated Fax Assault One way to go about getting your price quotes from the fleet department is to fax them your price quote request. Some people (not in the car business) think this is the best way to get price quotes from the dealers. I can tell you as an insider it is not. 7

8 Here is why. When a fleet manager or sales manager gets your fax they automatically assume you are faxing to 20 different dealers. They don t give the fax request the highest priority, simply because they figure some other fleet manager will fax you back a price $50 lower than what they quote you. Therefore, your fax gets thrown on their desk and buried under paper work, and many times no response will be sent. However, there is a way to make this method the very best way to get the best deal and that is to follow up the fax with a phone call! If you want to use this method, type up a fax describing the exact car with the options and colors that you want. Then fax it to the attention: Fleet Manager. Request their best price. I call this method the Educated Fax Assault, because when they get your fax they know you have educated yourself in the car buying process. This is the beautiful thing about buying a car by going through the fleet department. You never have to set foot into the dealership until you have gotten the best price on the vehicle you want to purchase. Let me go back to what I said earlier about the Educated Fax Assault. If you just blast out a fax to ten different dealers and do nothing else, you re not going to get the best deal. You need to combine this method with a phone call! You also need to make your fax very detailed in the type of automobile you want with all the options, color, etc. It s a complete waste of time to send out a fax and expect to get the lowest quote when you don t even have the model number, and proper options. If each dealership has the exact same information then you can compare oranges with oranges and not apples to limes. After you fax the dealerships then you follow up each fax with a phone call to the fleet department. Why do you have to follow up each fax with a phone call? Because the fleet manager feels that the person who calls is more serious and gives him or her a higher priority. It also gives you a chance to smooze with the fleet manager a little bit and tell him or her exactly what you re looking for. Let him or her know that you already have your own financing set up. Ask them what rebates they have on the vehicle that you wish to purchase. When you reach the fleet manager, tell him or her that you sent them a fax with exactly the vehicle you are looking for and do they have what you want on the lot available? If so, get the best price quote. After that, call the next dealership and do the same thing until you have your lowest quote on the vehicle that you wish to purchase. 8

9 You always want the fleet manager to know that you are getting several quotes. Be very kind and considerate. People shopping prices on cars with negative attitudes rarely get what they want, because they act like they have a chip on their shoulder. The fleet manager may not be able to give you a quote right away but make sure that you tell him or her that he or she can call you with a quote. If you want to buy a Chevrolet for example, some large cities will have 8 to15 different Chevrolet dealerships within short driving distance from your house. Depending on the vehicle you want to purchase, you should be able to buy one for invoice or less. Step-by-Step Educated Fax Example Here is the very best #1 way to purchase a vehicle, get the best price and not have to go into a car dealership and deal with sales people: Go to and bring up the exact car you want to purchase. On Edmunds you can type in the vehicle you want, and it will ask you what options you want on that car. There is a button that says Price with Options. You can then check each option you want on your car. You punch in all the options you want, color, etc. The next button you will click after you check the options you want is the TMV Pricing Report button. This will give you the invoice price of the car with the options. Now this part is very important. You want to copy and paste the vehicle information into your fax, so that each fleet manager knows exactly what type of vehicle you want with the exact options! Here is a sample fax that I have made, and I used a 2006 Subaru Legacy as my example: I went to and did what I described above and got the car I am interested in with the exact options I want on the vehicle. Below on the next page is a sample fax that you can use as a guide for your own fax. Notice that I copied and pasted the options into my fax. 9

10 Attention Fleet Manager To: ABC Subaru Fleet Manager From: Your First and Last Name Date: Subject: Vehicle Price Quote Dear Fleet Manager, I am contacting several fleet managers and requesting your best price quote on the vehicle below. We are looking to buy within the next week so please get back to me quickly. I want to purchase a brand new 06 Subaru Legacy with 2.5 GT Ltd. 4dr. Sedan AWD w/navi, Black Int. (2.5L 4cyl Turbo 5A) with the following options: L9S Appearance Group 1E S5L Spoiler - Obsidian Black Pearl L6F Popular Equipment Group 1A K5G Auto-Dimming Mirror and Compass w/homelink J4C Shift Knob - Momo LWI Moonroof Air Deflector P5E Hood Protector - Turbo B5A All-Weather Floor Mats MSV Wheel Locks - Alloy Wheels Color: Obsidian Black Pearl The price should include all applicable rebates, dealer cash shared, etc. We are looking for the very best deal possible and in return we will give very high marks for the dealerships CSI or Customer Service Survey. We will be paying cash for the vehicle. Thank you very much, and I look forward to hearing from you! Your Name Here P.S. The best way to reach me is my cell phone or my address your @yourhost.com. I will also follow up with a phone call. ********************************************************************************** 10

11 Notice some of the things I wrote in my fax which are very important. The first thing is that I let the fleet manager know that I was getting several quotes. This is so he or she knows that there is going to be competitive bids on the vehicle that I am shopping for. The second thing I did was let them know I wanted to buy within a week. This way they do not waste time in getting back to me, and they know that I am a serious buyer. The third thing I wrote is the exact type of vehicle I want with the exact options I want. This assures them that I have done my homework and know exactly what I want. The fourth thing I told them is that the price should include all rebates and dealer cash shared. This lets the fleet manager know that I am an educated car buyer and that I expect to get all applicable rebates for the vehicle and also some of the dealer cash. These terms are explained in detail later on in this book. Why should they give me a great price? The reason is the fifth item I discussed in the fax and that is the customer survey from the manufacture that is sent out to each new car buyer. It is very important for dealerships to get good customer satisfaction surveys from customers. Customer satisfaction is now a very big decision factor when manufacturers decide on whether or not to give a dealership more franchises. Therefore it s important to get high scores for the dealership. Last but not least, I let the fleet manager know that I would be paying cash and my contact information. I also said I would follow up with a phone call so he or she knows that they need to get cracking on my price quote, because I am a serious buyer. After the faxes are sent out, wait about an hour and call every fleet manager, so you can introduce yourself and find out who is working on your quote. If you re confused about some of the terms such as rebates, dealer cash, etc. don t worry. Everything is explained in detail later on in the book. Why those Internet sites with the free car buying information will end up costing you thousands of dollars! Let me explain something that probably 90% of the people surfing the Internet don t realize. When you go to a web site that gives you lots of free car buying information, they are not doing it in your best interest! 11

12 The sites I am talking about are not listed in this e-book. I don t want to give them any more publicity than they deserve, so I will not mention them by name. What they purport to do is give you a lot of advice on how to get the best deal on a car and where to get the best warranty deal, etc. Do you notice that none of them tell you about the fleet department? That is because they don t get paid for telling you about the fleet manager. They only tell you to get price quotes from the Internet sites. The reason is because they get paid for every person that they send from their web site who goes and gets a price quote. The same thing with warranties. They don t tell you what the difference between the different warranties is or how to buy one etc. They just guide you to a warranty web site, so that they can make money when you buy one. This is why these sites can cost car buyers thousands of dollars, because those car buyers are not getting true information. They are just being led around like sheep to different companies that pay them money. The companies mentioned on their web site pay them to send them customers. That is why you won t find the information in this e-book on those types of web sites. Most of them are not even owned by former car industry veterans. Those web sites are geared strictly to making a profit and not geared to giving you the real insider information such as is provided in this publication. What about this e-book? Do I get money when people click on the links in this e- book? Some of them I do. Most of them I do not. The difference is that the companies in this publication are not my source of income. The price you paid for this e-book is. If I recommend a company in this e-book, it s because I have researched that company for you. If they send me a couple bucks, because you clicked on their link then its just a little bonus. If you want, you are more than free to not click on any link and manually type it into your browser. Internet Car Buying Sites The other thing you want to do in conjunction with getting quotes from your local fleet managers is get quotes on the car you want to buy from the Internet brokers. You want to do this, so that you can compare them with the quotes you get from the fleet managers. In the event that you get a lower price quote from one of the Internet sites then you can use that as leverage. See if the fleet dealer will match that price if his or hers is higher than the Internet quote. 12

13 I am going to give you the best ones that I have found on the Internet and you can check them out for yourself. Invoicedealers has my highest recommendation. They are at The other site I recommend is In fact you can get quotes when you re doing vehicle research for your Educated Fax Assault. These sites will ask you for your zip code and get you quotes from dealers in your area. These sites will also have reviews and research information on them as well as giving you price quotes. Recap: Let s recap this first chapter on what you have learned so far: You can skip going through a salesperson by calling the fleet department at the auto dealership directly. You can get the best price by purchasing through the fleet department and comparing with other dealers and price quotes via the Internet. You learned how to do the Educated Fax Assault. You found out how the so-called free car buying sites are actually costing car buyers money instead of saving them money. I am sure you have other questions and they will be answered in the following chapters. In the next chapter, we will learn all about Invoice pricing, Dealer Hold Back, Rebates, etc. Keep reading my friend. There is lots more to learn. 13

14 CHAPTER TWO Invoice Let s talk about Invoice pricing for those people who may not know what I mean. Every new car comes with an invoice from the manufacturer for that specific vehicle. The basic information on an invoice will state the vehicle identification number (VIN for short), the make and model, dealership name, and the MSRP (Manufacturers Suggested Retail Price), the invoice price, holdback, and some other insignificant information. The invoice price is what the dealer pays for the vehicle less the holdback dollar amount. For example an invoice might show an MSRP amount of $23,274 with an invoice amount of $21,365 plus a holdback amount of $445. In this example the true dealer cost is $21,365 minus $445 equals: $20,920. Typically the more expensive a vehicle, the greater the difference between MSRP and invoice then the greater amount the holdback will be. Negotiating: I have actually read that some people tell you to negotiate the price you pay for a car from MSRP on down. Nothing could be further from the truth! You always negotiate from cost up! So the question is, what is a fair mark-up to pay the dealer. How do we find out what the invoice amount is, so that we can even begin to find out what we should be paying for the vehicle we want to purchase? Let s start with finding out what the invoice price is on the car you want to buy. You have two choices. Ask the fleet manager to show you the invoice, which they will. Or go to the Internet and find out. The fleet manager will gladly show you the invoice, because they are accustomed to dealing straight up with customers and selling the vehicles at invoice cost or slightly over cost. They get paid differently than sales people who work on the floor of the dealership. Fleet managers get paid from the true cost of the vehicle, which as we know, is Invoice minus the Holdback amount. Hot tip: Fleet managers can also sell used cars! If you see a used car you like at a dealership, make an appointment with the fleet manager. Have him or her show you the car and sell it to you. The Internet, as you know, is a place to find out just about anything on any subject. There are many web sites that you could visit and just click in the type of vehicle you are looking for with the options that you want. The web site will give you the MSRP and Invoice amount, and some will also give you the Holdback amount. I have listed three here for a reference for you to check out: 14

15 I believe these Internet sites to be the very best sites on the Internet for you to go to and get all the information you need in regards to car research, used car research, forums, price quotes on cars, auto insurance quotes, etc. Warning: When you get an invoice amount on a vehicle from an Internet site, always assume that it may be off by several hundred to several thousand dollars! Usually the amounts are very close. However, when making an offer for a new car, you must always make an offer based on the actual Invoice of the car that the dealership has. For example, if you were making an offer on a car of $200 over invoice then make that clear to the fleet manager. Tell him or her that you need to see the actual manufacturer s invoice, and that you will pay them $200 over that amount. Never make a dollar amount figure offer such as $21,543 because if the Invoice amount that you took from an Internet site is wrong, you could end up paying too much for the car. Important Government/Nonprofit Related Car Sites. Investigate These Sites Before You Purchase! There are a couple of other sites that you will want to be familiar with because they have information that is of the utmost of importance. Let s visit a couple of these sites right now, so you have an idea what kind of information they provide. is the site for the National Highway Traffic Safety Administration and gives lots of great information such as child safety seat reports, crash test reports, rollover consumer information, and tons of great safety related information. When you re at the site click on the link in the middle called, Recalls Search From Office of Defects Investigation. This is a site where if you were shopping for a used car, you can input the type of car, make, model, year and then see what recalls were done. Then if you buy the car you could call the local dealer, give them the vehicle identification number of the car, and see if any recalls need to be done. Now go visit because they have additional information on safety, auto defects, fuel economy, lemon laws, etc. If you want to know what the safest vehicles are, go to for total crash test ratings. 15

16 Does this next site need any introduction? The following site can give you lots of information on any car you want as well as objective information on hundreds of other product recommendations. Go to Market Values At an Internet site like Edmunds and Kelley Blue Book above, there is a nice feature that when you type in your information on the type of new car you are looking for, it gives you the MSRP and Invoice price, as well as a third number which is what that particular car has been selling for on average according to their sites statistics. On Edmunds this feature is called True Market Value and on KBB it s called New Car Blue Book. This is a nice feature because it gives you an idea of how much that car is selling for on average over the Invoice amount. Now remember that the selling figure these two sites will give you is just an average. You could end up buying the car for less money than what the sites average selling price gives you. Regarding how much you should pay for a new car from your fleet manager or salesperson, it really boils down to the type of car and the demand for the car. That is why the above features that I mentioned, True Market Value and New Car Blue Book, are such great price numbers to know when you re doing your research. By using the True Market Value and the New Car Blue Book features, you can easily see that if your quotes from the fleet managers are less than the prices you got from the Internet sites, you should feel confident that you are getting a good deal. You can also take your best two quotes and play them against the fleet managers and continue to negotiate for a better price than what was first quoted. Speaking of Internet sites, what is the deal with all those price quote sites on the Internet? It s really simple, actually. Those sites take the information you give them in regards to the kind of automobile you want to buy with all the options you want, and they in turn get price quotes from the fleet managers. When they get the cheapest price quote, they you with the price, and either: A) mark the price up for their profit or B) they keep the price the same as what they were quoted from the fleet manager. After you purchase the car, the dealership then pays the auto broker a fee. This is usually $100-$500 dollars per car. 16

17 You could also get price quotes from some of these car sites just to make sure your fleet manager is giving you the lowest price. If the Internet quote is less than your fleet manager s, then use it as leverage to get your fleet manager to match the price. If he or she does not match it, then purchase through the Internet site that gave you the lowest quote. Keep in mind they will simply tell you which dealership to go to in order to purchase your vehicle for the agreed upon price. Most people, of course, want to purchase a vehicle for as little as possible, which means at Invoice price or less. Do some research on the web sites I listed above. Find out how much the car you want to buy is selling for on average. Now find out what the Invoice amount is, and you will be light years ahead of the average car buyer. Most cars can be bought at Invoice price with the exception of higher-line cars and cars that are in greater demand. Remember when Chrysler came out with the PT Cruiser and dealerships were selling that car for $2,000-$5,000 over MSRP during its first year? My advice is never buy a new car when it s in its first year of production. There is a greater demand therefore higher price and not all of the bugs are worked out of it yet. So why not wait a year or two and get it much cheaper and without the typical first year bugs? Many people ask me about Holdback and can they purchase a vehicle for less than Invoice. Rarely can you purchase a brand new car for less than Invoice unless that car has been on the dealership lot for an extended period of time or the dealerships are getting rid of last year s model, because the new year models are arriving. Keep in mind that I am not including rebates or dealer cash when I say that rarely can you buy under invoice. With rebates and or dealer cash then of course you can purchase a car for below Invoice pricing. Rebates: The one sure way to purchase a vehicle for less than Invoice is to purchase that vehicle at Invoice price, plus take any available rebates off of that amount. I told you how to go about getting the best price on the car you want to buy from the fleet manager. I need to add a few things that you need to know that are very important to your saving money. Of course the goal of buying a new car is to get the car at Invoice price or less, which is possible. Once you have received your best price from your price quotes via the local fleet managers and the Internet, then the last thing to top off your purchase is to see what the factory rebates are for the vehicle you want to purchase. You can use 17

18 the same three Internet sites I gave you earlier, and Hot Tip: Sometimes these sites may not have updated information. Therefore simply go to the manufacture s site of the car you want to purchase. They will list the very latest financing incentives such as rebates and factory interest rates. The best way to avoid this problem is to always buy your vehicle at the end of the month. Sales consultants and sales managers are trying to get their sales quotas and bonuses. Also the web sites are updated for sure at the end of the month. When you hear rates like 0%, 1.9% or any other super-low interest rates, those are from the manufacturer and are called subvented interest rates. It just means that the manufacturer is picking up the tab, and they are financing your loan instead of a conventional bank or credit union loan. Sometimes the manufactures will offer a rebate or subvented interest rates for you to choose or sometimes they offer both a rebate and subvented interest rate. Scam Alert! Rebates do not cost the dealer one penny. They only cost the manufacturer money! Therefore, when you get your price quote make sure that the rebate is subtracted from the price quote. If a fleet manager quotes you the Invoice price then you subtract the rebate amount from the Invoice amount. This is one of the ways to purchase an automobile for less than Holdback. Do not fall for the scam where the rebate is $2,000 for example, and the dealer adds that to the invoice amount and then tells you you re getting the car for Invoice! Some people fall for this scam and the dealer loves it. Whatever price you negotiate you always subtract the Rebate from it! Let s keep moving. Dealer Cash: Dealer Cash is money that goes directly to the auto dealer from the manufacturer when he or she sells the car. It is really the same as a rebate to the customer but instead the dealer gets the money. When you are checking for rebates on the car you want to purchase, you also want to see if the manufacturer is getting any dealer cash for that car. If they are then you want to negotiate to get some or all of that money off of the final price of the car. You can check to see if there is Dealer Cash available by going to and looking under incentives. You will see a category called Marketing Support which means Dealer Cash. If there is Dealer Cash, then you want to negotiate for as much as you can get. Usually there is only Dealer Cash available on slower selling vehicle models, and that is why the manufacturers offer it to the dealerships. 18

19 Typically in September, dealerships start getting in the new year model cars and it would be possible to offer the dealer the Invoice minus Holdback. Realize the dealership is not making any money by doing this. Now you may think, Hey, I don t care if the dealer makes any money. In fact I hope they don t make any money off of me! This, my friend, is a terrible attitude to have towards any business. Let alone an auto dealer. Let me explain why. Every business has a cost associated with every product, auto dealers included. So if you buy a car at Invoice price and the dealer only makes say $400 in Holdback, that means that he paid on average of $100 to the fleet manager for his commission which gives the dealer $300 left minus advertising cost, flooring (interest paid to the bank on the vehicles on the lot), rent, and the usual expenses related to any business. Actually, the dealer ended up making very little profit depending on how much Holdback was on the particular vehicle sold. The dealer will make money selling at Invoice and also because manufacturers sometimes have incentive programs on different cars relating to the total amount sold for the year. The point I am trying to make is it will do you absolutely no good to cop an attitude at your dealership and tell your fleet manager or sales person that you don t care if he or she makes a profit. I can t tell you how many customers I myself have kicked out of the dealership for that kind of attitude. Getting back to offering to purchase the dealer s car at Invoice minus Holdback. In other words, zero profit to the dealership. This can be done, but usually the dealer will only do it when you are making the offer on a vehicle that is a leftover such as a 2004 model on his lot. The 2005 models are already selling on his or her lot. Now the dealer is desperate to get rid of the older model cars. If you have the opportunity to purchase an automobile at less than invoice, yes car dealers do advertise new cars at less than invoice. Then you re getting a great deal! Every Saturday you can see cars advertised for less than Invoice. These are called Loss Leaders in the auto biz and are designed to bring customers in to the dealership. Then they try to switch them to a better car that the dealer can make money on. Loss leaders are cars that have been on the dealership lot way too long and have not sold for one reason or another. Maybe the color is terrible or it does not have basic options like air conditioning, so the vehicle has not sold. Dealers will advertise it at a loss to get rid of it. Contrary to popular belief, auto dealers do lose money on some vehicles. Used cars as well will be advertised in the paper for less than the dealer paid for it. The reason is because if they can sell it to a customer, it is cheaper than taking it to the auction where they will lose much more money. 19

20 With that all being said, you don t have to feel sorry for car dealers who may lose money selling you a particular vehicle. Believe me, they will make up the loss on the next customer. The one who comes in and did not educate themselves like you were smart enough to have done. One thing before I forget. If there are not any fleet managers at your local dealer s then you can do the exact same techniques we spoke about with the sales manager. Every dealer has a Sales Manager, and they will help you out the same as a Fleet Manager would. Simply tell the Sales Manager when you call that you want to deal with him or her directly. If the sales managers don t help you or cop an attitude, simply call the owner. This will get everyone s attention! Do not forget there are also the Internet sites that quote you low prices, and you can arrange everything through them as well. Hot Tip: Customer Satisfaction - Otherwise known as CSI, CSS or some other alphabet soup acronym. Each manufacturer has their own acronym for the Customer Satisfaction Survey that the auto manufacturers send out to all buyers of their new automobiles. The auto manufacturers put a great deal of pressure on their dealers to have a good customer satisfaction rating. Here is how you use this valuable piece of information. When talking to the Fleet Manager tell him or her that you will give them a score of 100% on the customer satisfaction survey. Let them know that you expect the lowest price possible and that you will without a doubt give them a 100% score on the survey. This does two things: A) It makes the fleet manager aware of the fact that you know about the survey. B) The fleet manager will usually go the extra mile to give you the very best service and deal possible. When the survey comes then keep your promise! Buyer s Remorse! Let s face it. Anyone can get buyer s remorse after they just made a huge purchase. The question is how do you get out of the car deal that you just purchased yesterday? The answer is this. Never take or drive the car off of the dealership lot the day you purchase it. The reason is because even though you signed a contract, that contract is usually not valid until you physically take delivery of the vehicle. That means you drive it off the lot. 20

21 Now please remember that I am not an attorney, so the law may be different in the state that you live in. However where I am from, unless the customer physically drove the car off the lot after signing their paper work, the deal was not consummated. So if you are at all skeptical about your purchase, then do not drive the car off the lot. If you do take possession of the car you purchased and then change your mind a day or two later, then basically you are at the mercy of the dealership as far as seeing if they are willing to unwind the car deal. Some small town dealers will for fear of getting bad mouthed by the customer in town. The big city dealers are a whole other story. They will simply tell you that you are an owner! There is another way of getting out of a contract. That is if you financed the vehicle through the dealership, and they call you back to re-sign the contract because of an error or mistake. If the contract is in error, then they do not have a valid contract, and you could technically give them back the keys and walk away from the deal. This usually only happens in cases where the dealer is selling the car to a customer with bad credit. Sometimes the dealer has to re-sign the customer, because they signed the customer at the wrong interest rate or sold them a warranty and the bank will not agree to the warranty being sold. Scam Alert: When a car dealer calls you back and wants you to resign your contract, pay very close attention to what is different about the contract. Sometimes they sold you an extended warranty, but the bank does not approve of the warranty, so they have to call you back and take it off of the contract. Of course the dealer does not want to lose that profit so they will usually try to raise the interest rate on you. Do not let them raise the interest rate! Canadian Buyers: Where would we be without our friends to the North? ;-) After getting a couple s from Canadian buyers of this book, I decided I better do some research and see how I can better serve them in their own neck of the woods. So the following is what I found. There are several great web sites for Canadian car buyers to do research on and find out a great deal of information. The first site I want to mention is located at This site is probably best compared to the Edmunds site here in America. You can find out a great deal of information at this site in regards to car purchasing. The one big difference between this site and Edmunds is that if you want Invoice information on different cars, you have to subscribe to their service. This will cost you some money. Check under the heading Get Canadian Car Prices for the exact cost of this service. 21

22 I believe that Canada pays the same prices for cars from the manufacturer that the United States does. Of course you have different import taxes and that stuff, but realistically the pricing should be about the same as American Invoice amounts. The reason I mention this is because if you follow the techniques I gave in this chapter for car buying, you should be able to do the following. Go to and research the Invoice amount on the car you want to purchase. Then convert that amount into Canadian dollars. Then when you are speaking with the fleet manager or sales manager, you of course ask them to show you the actual Invoice for the car. Base your offer on that information. Just because you re in Canada does not alter the car buying process. You still get different quotes for the car, and you still make your offer based on the actual Invoice amount. I have been around the world and lived in several different countries. I can tell you the car buying process is still pretty much the same no matter what country you are in. Every country still works on the negotiation system of selling cars. So no matter where you live you re still going to do the same basic principles I taught you in this first chapter. The principles boil down to doing your research on the car you want to purchase and getting quotes. You then make your offer based on the actual factory invoice. Any auto dealer that does not want to show you the actual factory Invoice is simply trying to hide something from you. What they are hiding is too much profit. Another good Canadian web site for research is This site is also accessible from web site. This site will give you all the different car research that you need and also has a lot of great articles about cars, car buying, leasing, etc. One more site that is interesting is an article written by a journalist comparing some of the Canadian web sites and it is located at If you re looking for car insurance in Canada you can get free quotes from different Canadian car insurance companies at That is all the information you need if you live in Canada. Remember that all the car buying principles I teach can be used in Canada. Do your homework then deal directly with the Sales Manager or Fleet Manager. Always buy and make your offer based on the actual factory Invoice. 22

23 Recap: Let s recap this second chapter on what you have learned so far: You can use the Internet to tell you the Invoice price, Rebates, Dealer Cash and what the average selling price is for the vehicle you desire to purchase. You can also use those same Internet sites to find out how much used vehicles should be priced as well. You know that by far the easiest and most painless way to purchase an automobile is through the fleet department. You learned how to prevent buyer s remorse. You learned how to buy if you re in Canada. I am sure you have other questions, and they will be answered in the following chapters. Keep reading my friend, there is lots more to learn. 23

24 CHAPTER THREE In this third chapter, I want to cover some topics such as your trade vehicle and selling it yourself or trading it in. Most people don t go to the trouble to find out how much their car is worth, and also they don t go to the trouble of selling it themselves. Let me say this. If you want the most money out of the vehicle you want to trade, then SELL IT YOURSELF! I hope my shouting didn t impair your hearing. :-) Yes, it s a lot of work to sell it yourself. You have to make your phone number public in the paper and have people call you at all times of the day and night. You have to take the time to show them the vehicle and answer their questions. You have to hope they can get a loan for your car, and you have to get a cashier s check from them. It takes work to sell your car yourself, so if you trade the vehicle in don t expect to get as much as if you sold it yourself! Common sense isn t it? Hot tip: If you re selling a car yourself, meet the potential buyer at a public parking lot not your house! This is especially true for single women. You don t want to sell your car and have the buyer know where you live. If there are problems with the car, the buyer could make problems for you. Obviously, if you are a single woman, you don t want some strange man coming to your house. Arrange to meet the buyer at a public parking lot such as a restaurant and bring a male friend with you. Before you sell or trade in your car, you need to do several things. First, go to and and see what your car is worth. Some states go by the Kelley Blue Book and some states go by the NADA book. Just call up your local bank and they will be able to tell you which guide is used in your state. Both guides will be different in valuing your vehicle, so you will want to know which one the auto dealers use in your state. On NADA there will be an average trade-in and average retail price when you type in your automobile. On Kelley Blue Book you will see Trade-In Value and Used Car Retail Value. You will have to enter your car in both sections to find out the value for both trade-in and retail. Most people think their car is worth more than it really is. Now let me ask you a question. You were smart enough to invest in this book to find out how you could save the most money purchasing a vehicle, find out the tricks auto dealers use (still coming later), and basically educate yourself on how not to get ripped off purchasing or selling your next vehicle. Most people will see a retail value on their trade-in car and want to get that amount for selling or trading their car. 24

25 Here then is my question. Would you pay retail price for a used car? Of course not! You want to buy a new car at invoice or less, so why would you want to pay retail for a used one? Why do so many people think they are going to get retail price out of their car if they put it in the paper? The cold hard fact is they are not! The point I am trying to make is you need to get realistic on what you can sell your trade-in car for. If it s in perfect condition, then you should price it at the price that is between tradein value and retail value. Even at this price most people will offer you less than you re asking. There are some exceptions such as when you have a very nice car that is in hot demand such as a Honda, Toyota or diesel truck. These kinds of vehicles with low miles and great condition will command more money. In regards to pricing your car to sell, here is practical advice. You can always start at retail and go down. If you re in a hurry to sell your car, then price it lower. My suggestion is that you should try to sell your car yourself first, and if you don t succeed then trade it in. Hot tip: Always have your car professionally detailed before you sell it yourself or trade it in! This will get you far more money for your car than what you spend on getting it detailed! If you have small door dings that can be taken out inexpensively then have them taken out. Check your local Yellow Pages for Dent Doctors and those kinds of businesses that will come straight to your house to take the dings out. The two things that absolutely KILL your resale value on your automobiles: Smoking in your car! Transporting your dog in your car! If you ever expect to get any kind of resale value out of your vehicle, then don t do those two things! When evaluating the condition of your own car you really have to see your car through someone else s eyes. If your car is not in showroom condition then don t expect to get anywhere near retail price for your car. Let me add one more thing that people do not like to see on cars bumper stickers! No one cares what your political stances are or what or who you believe in. If you want people to know all that stuff, then build a web site but don t put bumper stickers on your car. They degrade with weather and time and do not help your resale value one iota. 25