Understand the finance office

Consumers today have more information about buying a car than any other item on earth. You can find out a dealer's true cost, what your vehicle is worth, interest rates and more at the click of a button. This wealth of information led to a sharp decline in profits and left dealers scrambling for ways to make up this lost revenue.

The answer came in the form of the finance manager. Most customers wrongly believe that negotiation is over once they agree on terms and ring the bell. Little do they know that almost 75% of the dealers profit is about to be negotiated for. This is intentional. Your guard has been up all day, you came to an agreement and shook on it. They want you to believe that the negotiation is over and it's all rainbows and puppy dogs.

A finance manager is typically the best salesperson in the entire building. This one person is typically responsible for a huge portion of the profit of the dealership. You need to prepare for your negotiation with this person in advance. And you will be negotiating even if you don't realize it.

The negotiation usually starts at the presentation of the menu. The menu is a piece of paper that shows a few options usually labeled in an ascending way. For example: bronze, gold, platinum, or diamond. Obviously bronze pays them the least and costs the least and goes up from there. This menu will package high profit items that don't have as much value to the consumer with low profit high value items. This is done to maximize profit.

You do not need to buy a package at all, and if you do decide to buy products you can buy them in any combination you choose.

When talking about these items make sure you always ask the cost of the items, do not negotiate these or make your decision solely based on payment. The idea of $5 a month covering your expensive tires and wheels from road hazards sounds ok, until you realize it's costing you $480 for that.

The finance manager also has a large discretion on what rate they charge you. A common sales tactic is to lower the interest rate in exchange for you agreeing to buy products. This is an opportunity to use shady tactics to save yourself money. Demand the lower rate they offered, no matter what products you bought. No bank lowers rates based on you having a warranty or gap insurance or any other products.

Some items have more value than others. Read more on this blog for specifics about different items and try to decide before you go if it's a product you will need or not. Being prepared in the finance office can make more of a difference in your purchase than at almost any other point of the sales process, so make the most of it.

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