Understanding the Four Square

Ahh the classic four square. It seems every day a sales genius or company comes out with a better wheel for dealers to replace a piece of paper that has been used since the 70's. The four square is a dealer's best tool in the battle for profit and sales.

What is a four square? If you look at the image, it shows you an actual four square of a deal. As the name implies, the negotiation is split into four different squares. One for the trade, one for the price, then payment and down payment.

The idea is that if you can focus on one instead of the entire picture, it leads to more profit. The typical "pencil" begins with the desk manager filling this out after your test drive and application.

All those scribbles and garbage are actually important and effective at the art of misdirection. The typical situation is that the sales price is full retail, the trade is less than you wanted, down is more than you wanted to put and the payment is higher than you are comfortable with. This is all intentional.

The dealer's ideal situation is for you to focus on one box, we will use the trade as an example. You did your research and everyone says it's worth $4000, they offer you $2000. Upset, you point this out to your salesman. He counters with the compromise that if they give you the $4000 you want would you do the deal? The car was always worth $4000 and your negotiation did nothing except keep you off the big picture.

So, how do you beat this tool? You don't, you can't, so just avoid it all together. Ask what they are giving you for your trade, your interest rate and what the out the door price is. Avoid any conversations about down payment or term and payment. This puts you back in control of the negotiation. Negotiate each of these items by themselves. Only after you've got these items to a point you're satisfied with do you discuss payment and down payment.

The four square is the equivalant of bringing a bazooka to a knife fight. Pay close attention and change the negotiation to the terms that really matter and you will leave knowing you got a great deal on your vehicle purchase.