The dealership has three profit centers to work; the selling price, the trade-in and the finance desk. The big profit center these days is the latter. Whether you agree or not, you will be introduced to the Finance Guy who will attempt to maximize profit by putting you through the dealerships preferred lender; selling you a warranty, credit life, disability insurance, GAP insurance and other products.

The key to staying in control is to separate the three profit centers. Arrange your financing through the Credit Union in advance. Ask for a written appraisal on your trade-in BEFORE you begin negotiating on the price of the new vehicle.

• By now you should know how much money you are prepared to spend
• You know the vehicle you want and you have an approximation of what the dealer paid for the vehicle.
• You know what your old car is worth.
• The dealer wants to sell, but you are not buying unless its on your terms. If the dealer won't negotiate in good faith, be prepared to try another dealer.

The following steps will help you:

1. If you like your salesperson, ask for him/her.
   You should be aware that the sales person is not-in-the-know. The sales manager does not want his/her sales staff to know the true invoice price of the vehicles that they sell. You will begin negotiations with the salesperson, but the sales manager will have the final say.
2. Keep your numbers on a piece of paper with you. If the dealership people don't like the tone of the negotiations, they will keep changing the subject by switching back between financing, trade-in, manufacturers incentives, etc. DO NOT let yourself become distracted by this shell game.


3. Tell the salesperson that you are ready to buy, but that you intend to compare the deal offered at this dealership with one down the street. This cannot be an idle threat. You must mean it.
4. If you have a trade, ask to have it appraised. Do this before you discuss the new car price. You do this so the dealer cannot later lower what you are offered on a trade-in after you get the price you asked for on the new vehicle! If you encounter a dealership that will not appraise your vehicle first, find another dealership.
5. Agree on the amount the dealer will give you for your trade.
6. Make an offer starting from the bottom up. Your goal should be 2% over invoice. On a $20,000 invoice, thats $400.00.
   If you followed the step above, you have been given an offer in writing for your trade-in. Like any business transaction, the dealer will be more motivated to sell at a low price if the vehicle has been on the lot for awhile or if you are buying a vehicle that is not a 'hot seller'. If you must have a hot seller, be prepared to offer more.
7. Do not accept any offer that is not in writing. Make sure that the dealer lists all costs, including taxes, license and registration fees, as well as the infamous 'Document Preparation Fee'. This fee, which is usually around $180.00 is simply more profit for the dealer. You know that it is profit because the dealer will charge you a 6% sales tax on this figure. Michigan does not charge sales taxes on a service, so, the fee MUST be an increase in price!
8. Never give a deposit, drivers license or credit card until you are satisfied with the COMPLETE offer in writing.The deposit should be small, no more than $50, to $100.
9. You are not done yet! Your sales person will now INSIST that you speak with the Finance Guy."
   Here comes the really hard sell. As stated before, this is where most dealerships make their money today. It does not matter if you are paying cash or financing at the credit union, the Finance Guy's goal is the following:
   1. The Finance Guy will question where you are financing. He will tell you that he deals with hundreds of lenders and can get you a better deal. Remember that most lenders pay the dealership for an approved loan. Some lenders even give the F&I person the discretion to set the rate within a range. You will be asked 'how does this payment sound?'. Dealers always talk payment, buyers should be talking RATE and TERM! The F&I person does NOT want you to leave the dealership and go to the credit union! Why? Read the next bullet point!
   2. The Finance Guy Person will sell you Credit Life Insurance, Disability Insurance, GAP Insurance, etc. If you finance at the Credit Union, you will most likely be able to purchase the same insurance at the Credit Union for MUCH less money.
   3. Now the Finance Guy will try to sell you an extended warranty. Remember that a warranty is an insurance policy. Insurance companies make money on these products. Do you need an extended warranty? Most experts say that extended warranties are not a worthwhile investment.
   4. Be prepared for the Finance Guy to try to talk you into a lease.
      Dealers make more money on leases. Should you lease? For some people it makes sense, for others it does not. Read the following section on leasing for details.
   5. So how do you deal with this high-pressure sales pitch?. The answer is simple. Ask the Finance Guy to put it all in writing to give you a chance to compare. After all, if you came into the credit union, you would expect to receive all proposals in writing. Correct? If the F&I person does not comply, what is he/she hiding?
      
   
   Finally, if the dealer wants you to take the vehicle home with you, don't. The vehicle should be prepped when you pick it up and you should have an opportunity to check it over before taking possession.