Car Buying Tips: The Four Square - How It's Designed To Confuse You

As a former car salesperson I know all the car buying tips and tricks designed to confuse you and take your mind off the bottom line - the actual purchase price of the car!

I never did like all the tricks used to manipulate people so after I left car sales I decided to write these two articles on car buying tips to help you negotiate for a fair deal. I know they are a little long, but they are honestly worth the reading! It could translate into thousands of dollars in savings to you!

Let's Get Started . . .

So, you've found the vehicle you want and you're ready to start the car negotiating process. The salesman takes out a piece of paper and draws a large plus sign on it. This is called the "four square."

In the first square he writes the sticker price of the vehicle. In another square he writes your down payment. Then he leaves to "talk with his manager" assuring you he's going to work you a great deal!

After making you wait what seems like an eternity (another tactic designed to make you anxious) he comes back with a big grin on his face and says "good news!" and puts down the paper. The remaining two squares are filled in with the trade value and payments.

This is where things quickly begin to go south in the car negotiating process. The trade value is usually WAY TOO LOW and the payments are WAY TOO HIGH.

Don't be fooled! This car negotiating tactic is designed to throw you off balance. The salesman's job at this point is to get a signed commitment "bumping" you up from the original down payment and payments you want.

Here's How He Does It:

You're looking at his sheet and getting nervous thinking you can't afford this vehicle! Then he asks you, "What payments were you hoping to get?" Or "What were you thinking your trade-in was worth?"

These phrases are designed to plant doubt in your mind that you won’t get the payments you wanted. He says you can purchase the vehicle for $500 a month and you wanted $300. So you say, "Well . . . . I can afford $350 if I budget myself." So, already you've come up a bit more than you already wanted.

Taking the sheet he writes down $370, then asks the next question "Up To?" Meaning, $370 to $400 maybe? So, the salesman writes down something like "I will buy and drive right now for $370 to $400 a month" and asks you to sign it. Then he goes back to "talk to his manager."

So you see, already he's bumped you up by $100 a month!

After waiting another eternity he comes back with more "Good News!" He's gotten his manager to increase your trade-in by $1,000! Wowee! This lowers your payments down to $475! And it's all written nicely on the four square sheet and circled and initialed by the manager to look official.

So now you're getting tense and a little overwhelmed. You state that you just can't afford that payment and start to get up. The salesman sees his commission going out the window and stops you. He says, "If I could get the payments around where you want them will you buy the vehicle?"

Listen to the words again, "around where you want them." In car negotiation-speak this translates into about $35 to $50 more than you've already committed to.

At this point he whips out his sharpie pen and starts drawing circles and arrows. Saying things like, "Well, to get payments around where you need them we need to come up in trade or down in price. I need to talk to my manager and see what he is willing to do to sell this vehicle. Obviously we're a long ways apart."

This is where the second "bump" comes in. He'll say, "If I can get my manager to come up in trade or down in price, can you come UP in down payment? So you say, "well . . . we can give you an additional $1,000 if we eat dog food for a month." And he writes that down.

Then he scribbles another "commitment" on the paper and asks for your signature. By now the "four square" is looking a little ragged with numbers and arrows and slash marks everywhere. You're thoroughly confused and tense!

In terms of car negotiating he's got you right where he wants you. He's bumped you up in monthly payment, up in down payment, AND he hasn't touched, or only slightly touched, the price of the car!

So, How Do You Keep The Ball In Your Court And Control The Situation?

First and foremost - Get a pre-approved car loan! This is the easiest way to take the wind out of their sales. When you are pre-approved it puts you in the drivers seat because YOU control the negotiating on the PRICE of the vehicle and the VALUE of your trade-in.

Know your trade-in value. Visit Kelley Blue Book, Edmunds, or check out your local Auto Trader to see what similar vehicles are selling for. Often lenders who pre-approve you will also give you a good estimate of your trade-in value to help you when car negotiating.

Once you've locked in a pre-approved auto loan, don't let the dealer talk you into "pulling your credit to see if he can get you a better interest rate." Once again, this puts the ball in their court because with another lender perhaps they can lengthen payment terms and lower your monthly payments without discounting their vehicle.

Shop with a friend or someone who is a good negotiator. Then - listen to them when they give you advice about what to do or say! But the first bit of advice is Get Pre-Approved!


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