Dealing with Car Dealers: Pros, Cons, Tips, Tactics

Car salesman

Last week we talked about how dealers typically work the car-selling process for new and used cars. This week, let’s talk about how you can work it.

You’re a seller, and it’s time to get rid of your three-year-old Volkswagen Golf. You want a new car and face the typical, sometimes wrenching, decision of whether to sell the car privately or trade it in. (If your car is more than four years old, sell it privately, since dealers don’t want older cars unless they are specialty vehicles.)

The first step is to figure out, objectively, what your car is worth. Use our DealFinder, Kelley Blue Book, and NADA Guides as resources to compare private sale and trade-in values.

Selling a car privately can be a big pain: dealing with unknown, maybe untrustworthy, people; making yourself available at all hours; spending money to detail and advertise the car; etc. On the other hand a private sale, as we have said, will get you more money, sometimes a lot more.

If you are pressed for time or can’t take the aggravation, trading in your car may be a good choice. Sure, you’re only getting wholesale for your car, but you’re paying for the convenience of having the transaction done quickly with no legal responsibilities or problems, and by someone else. And there may be tax advantages when you buy the new car. You’ll find a good discussion of trading advantages here.

Old-time used-car dealerThe most important thing to remember about trading your car in is that you are really conducting two separate deals. You negotiate the best price from your dealer on the new car first, and then talk about a trade. I got screwed once by agreeing to a great buy price, under the invoice, and essentially giving the dealer my trade for free.

Two other essential tactics you need to keep in mind whether you’re trading or not: Always investigate factory incentives and rebates (the best route to a good bottom-line deal). Some websites like this one will keep you current on incentives. And never, never tell a salesman what you’re willing to pay per month.

When setting up financing arrangements, there are two words to keep in mind: “shop around.” In the final, back-room negotiations, avoid the add-ons like credit life insurance and extended warranties and extras. Question everything.

Incidentally, used car prices are high right now; you might find a new car is a better deal. Leases are getting popular again, and for many buyers they make good sense.

An interesting article compares how women and men purchase things, including cars. Essentially, men focus on the transaction and the price, women on the value and the buying experience. It’s “buying” versus “shopping,” eating fast food versus a great restaurant meal. In buying a car, you’ve got to commit the time and involvement to get the deal right. It would seem men have much to learn from the female approach, particularly in the way we buy (and sell) cars.

We’re curious: Have any of the techniques described here worked for you?


Find Used Cars in Your Area at CarGurus

Used Volkswagen Golf


  1. @Michael:

    I’m not interesting in getting into a pissing match with one who intimates that he is in the car business and feels obliged to protect his “turf”. That’s fair. Your opinions however, lead me to believe that it is in your interests to say what you say and therefore I believe that your opinions are not in the best interests of the consumer.

    Point One- You admit that you hold back money on an outright sale in anticipation of a trade. So you admit to screwing the new car buyer by keeping the money in your pocket and charging him more. You also admit that you screw the used car buyer by lowballing his trade. So you are screwing the consumer either way.

    Point Two- If someone spends two months trying to sell their clunker, the price is too high. I also wouldn’t recommend that someone who works for a living stay at home that long just to try and sell the car.
    If the dealer gave the guy what he wanted for his clunker in the first place, we wouldn’t be having this conversation and the guy wouldn’t have to stay at home trying to sell his clunker. It is never, ever in the interest of the dealer to give a consumer true value for his trade. You have also clearly shown that it is in the best interest of the consumer to ask for the moon for their trade because they always know that the dealer is trying to lowball them.

    Point Three- you admit that you know nothing about leasing since you haven’t researched the pros and cons. You kill your argument by saying that there would be less debt if everyone leased. Michael, just think about what you said. People who lease aren’t borrowing and in debt???
    And you want people to email you so you can show them what you know about leasing?? My friend, you just did.

    I am very pleased that Points Four and Five are to your liking and that you have no argument with them. Cheers!

  2. Just because you’ve been around for 50 years doesn’t mean you have learned anything. You can be opinionated on everything, doesn’t mean you know anything. Lets break down your advice shall we.

    1. Always buy outright with no trade. – Yeah that helps. do you not understand that when you trade there is a huge tax savings? The amount your trade is worth is non-taxable, because you’ve already paid taxes on it once. The idea that dealers by far certainly give better prices with no trade. Yeah right. We have heard “I don’t have a trade” a million times, then 90 million surprise us with a trade. We hold money on the deal just encase. This first piece of advice is a real gem. So you end up paying more because we are holding money in anticipation of a trade anyway. So with out a trade that money stays in my pocket, thanks for that one.

    2. Always sell your used clunker outright, no matter what you end up getting for it. If you can’t sell it, the price is too high.- Yeah again really smart. Anyone here a stay home and not work to support their family? Which i’m sure is full of activities, raise your hand… Anyone? I didn’t think so. Who has time to stay at home and deal with stranger after stranger for weeks or possibly months? No one because we all lead very busy lives. “Always sell your used clunker outright, no matter what you end up getting for it.” Seriously!? So if you spend two months trying to sell your “clunker” as Our “expert” so politely put it and get exactly the same amount of money the dealer would have given you in 4 hours. Ask yourself this, is it worth it in the end? No Because believe me if people research the shit out of a car I sell on my lot. With consumer protection like the BBB and lemon laws. You bet your rear they will research your car and low ball you.

    3. Unless you can write off the cost of a lease, leasing is a losing proposition for the average consumer. – This is the most idiotic statement I have ever heard. I dare anyone to google the pros and cons of leasing. I have not done this myself but i’m very certain there will be a very intelligent break down of why that’s a good idea for all consumers. If everyone leased their car there would be a lot less debt in the world. Anyone wants to know what I know about leasing feel free to e-mail me.

    4. Dutifully do you homework by following the suggestions above and then
    you can mitigate your losses.

    5. Know what you can afford and don’t be distracted by “status”.

    The last two are good pieces of advice. I have nothing to argue with them.

  3. Just remember that the salesman knows infinitely more about cars than you no matter how much you fancy yourself as an outstanding negotiator. This is their bread and butter and you will never, ever get the best of them in any deal. If you buy outright, trade or lease, you are dead meat. Following the tips suggested above certainly helps, but one should never get the idea that he or she got a “good deal”. As to things I have learned over the last 50 years:

    1. Always buy outright with no trade
    2. Always sell your used clunker outright, no matter what you end up
    getting for it. If you can’t sell it, the price is too high.
    3. Unless you can write off the cost of a lease, leasing is a losing
    proposition for the average consumer.
    4. Dutifully do you homework by following the suggestions above and then
    you can mitigate your losses.
    5. Know what you can afford and don’t be distracted by “status”.

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