Car Dealer Negotiation Trick: The 4 Square Method
Smart car buyers know never to set foot in a dealership when it comes time to haggle - it's way more effective to do all your negotiation via phone and email.
What we're going to reveal in this article is the most common negotiation technique dealers use to sucker car buyers out of their hard-earned money.
It's called the 4 Square Method.
The good news is that you will never have to encounter this sleazy technique as long as you follow our car buying method, but it's always interesting to see how slimy dealerships can be when ripping off customers. (Note that not all dealerships use this technique)
How the 4 Square Method Works
The 4-Square method is a negotiation technique that is designed to confuse car buyers by mixing the price of the car, down payment, trade-in value, and monthly payment into one sheet of paper as seen below.
By mixing these all together, the salesman can easily move around the numbers to make it seem like you're getting a good deal when in fact, you're getting ripped off.
Most clueless car shoppers focus on the monthly payment which is exactly what they want since it's the easiest to manipulate.
The salesman knows if they can get you to focus on one square of the worksheet, they can rip you off on the other 3 squares.
Check out how confusing the worksheet looks after going back-and-forth through each square.
Photo courtesy of Edmunds.com
The Consumerist has a fantastic overview of this method and goes into great detail if you're interested in learning more.
How to Avoid the 4 Square Method
Avoiding this sales technique is easy if you follow our advice.
First, you should always negotiate each part of the transaction separately.
This means you keep the negotiation of the car price separate from the trade-in, financing, and any other add-ons such as extended warranty plans.
It's important that you arrange your own financing before negotiating the price of the car.
Dealers love to mix the financing with car price negotiation because they can have you focus on monthly payments instead of the price of the car.
The ironic part about negotiating the price of a car the smart way is that it's so easy. It not only saves you a ton of time and hassle, but you will save thousands of dollars in the process.
3 Steps Every Car Buyer Needs to Take to Save Maximum MoneyThe key to getting the best deal is to gather price or lease bids from as many local dealers as possible. Then shop that best price around until no one can beat it. Here are the steps:
Step 1 Get Prices From My Trusted NetworkSelect the vehicle you're interested in to see if there are local dealers in my network who will provide you with their best upfront price. You will get direct access to an internet sales manager who you can further negotiate with online (no need to visit dealership).
Step 2 Get Prices From TrueCar / CarsDirectTrueCar, and CarsDirect are my top 2 online price quote recommendations. These services show you pre-negotiated prices from dealers closest to you - and the deals are usually pretty decent. But remember, you can still negotiate further.
Step 3 Complete my ChecklistFollow this up with my checklist to make sure you squeeze out every last bit of savings.
- Gregg Fidan
Each week, I'll keep you up-to-date on the latest car deals and news that might affect your purchase. This includes...
- Best Rebates, Incentives, and Lease Deals
- Latest Car Buying Scams and Tricks
- The Best & Worst Time to Buy a Car
- Which Cars You Should Avoid