| ttom-link"> | | | | down payment (if any), and desired term. Find a loan |
| | | | calculator and plug in numbers until you know match |
| Four-Square. It’s one of the most common | | | | your budget. If you know going in that a total finance |
| car deal worksheets used today. It’s been | | | | amount of $15,000 with zero down will be $311 per |
| around since the 80s. It’s designed to rip | | | | month for 60 months at 8.9%, you will be able to find |
| customers off. How? Normally, the 4 numbers in | | | | the car that fits your budget. |
| the squares do not directly include the only one that is | | | | 3) Get all the numbers you need ahead of |
| important: Trade Difference. | | | | time. If you know how much vehicles you are |
| Having car buyers at the dealership, at the negotiating | | | | considering are selling for at local dealerships, and you |
| table, excited about a vehicle and ready to make a | | | | know how much your trade is probably worth, and you |
| purchase is the only time the dealership has a chance | | | | know your exact payoff, you can determine what |
| to really make some money. The best way they can | | | | your target trade difference and amount financed will |
| do this is by making consumers focus on payments. | | | | be. |
| This is where the four-square worksheet and other | | | | 4) Try to get your trade evaluated first. |
| tools like it come into play. Usually the four squares | | | | Many dealerships won’t do it, plus it |
| show their price, the value of the trade, the cash down, | | | | won’t help you in negotiating (despite other |
| and the payment. Here is a normal method of | | | | articles that claim the contrary), but it will tell you how |
| presenting the deal: | | | | much vehicle you can consider at that car lot. Do not |
| The car salesperson walks in and puts the sheet in | | | | make the mistake of trying to find the dealership that |
| front of you, facing you. They point to each square | | | | offers the most for your trade up front. If your car is |
| as they go over the numbers. | | | | worth $5,000, some dealerships will say it is worth |
| This is for ours
this is yours
with $3,000 | | | | $4,000, while others may say it’s worth |
| down, your monthly payments would be $789 per | | | | $8,000. In reality, they are all giving approximately the |
| month. Initial here and I’ll go get it cleaned | | | | same, but you’ll find that the dealership giving |
| up! | | | | $8,000 is probably $3k-$4k higher on the price of their |
| Whoa, whoa, whoa! $789 per month? $3,000 | | | | vehicles. Again, focus on trade difference. |
| down? What happened to zero down and $249 a | | | | 5) As rough as it is to go to multiple car |
| month like the advertisement said? | | | | dealers, it is a good idea. Gather trade differences on |
| And just like that, they have you. The last two | | | | similar vehicles, then go back to the dealership with the |
| numbers were so outrageous and spoken out loud. | | | | best one. Then ask them to make it even better. |
| The first two we skimmed over and never spoken. | | | | They may or they may not, but it never hurts to ask. |
| You’re ready to leave, but before you can, the | | | | 6) Talk payments with the finance manager |
| salesperson will identify the objection, which will usually | | | | only, and only after the trade difference is |
| be the payment and money down, and try to fix it. | | | | acceptable. If you know that a $15,000 loan will be |
| After a few rounds of back and forth, they relent to | | | | around $310 per month, there is no reason to argue it |
| $500 down and $279 per month, magically making the | | | | with a salesperson who comes with numbers showing |
| numbers acceptable for you. Still, at no time did they | | | | the $15,000 loan at $370 per month. They want you |
| adjust the top numbers. They simply kept the | | | | to agree to leave a cushion for finance to sell |
| customer focused on payment and cash down. | | | | you a warranty, bump your rate, or sell some other |
| They won. | | | | products. Again, if the trade difference is acceptable, |
| The best way to prepare for car shopping and get the | | | | worry about the rest of the numbers with the finance |
| best deal is to focus on trade difference — the | | | | manager. |
| difference between their car and your car. You can | | | | 7) Be strong. Focus on the prize. Do not |
| also consider total financed amount, which is | | | | let anything or anyone distract you from the important |
| trade difference plus your trade-in’s payoff. | | | | number: trade difference. That is the only number |
| If you can find an honest car dealer that works strictly | | | | you need to negotiate on the floor. Bring a copy of |
| with trade difference, such as Oklahoma City Lincoln | | | | this article if you must, but make sure they know you |
| Town Cars, you’ll have a much more enjoyable | | | | know what they know. You know? |
| experience. | | | | It is an extremely competitive market, more so than |
| If there are no dealerships like them locally, follow | | | | ever before. The internet has made it increasingly |
| these steps and you’ll avoid getting redirected in | | | | difficult for car dealerships to make money. |
| the direction the dealership wants you to look: | | | | Consumers have access to online inventories and |
| 1) Determine your likely interest rate. Better | | | | classified sites like Baltimore Used Cars. |
| yet, get pre-approved at your bank, credit union, or | | | | They can get ideas of their trade values at Black |
| other lending institution. The dealership will probably | | | | Book Online. |
| be able to get a better rate, but knowing what the | | | | They can check loan payment calculators, find |
| current rates are for your credit situation and for the | | | | affordable warranties, and get a used car’s |
| kind of vehicles you are considering will help | | | | vehicle history report. For all of this, we can thank the |
| dramatically. | | | | Internet. |
| 2) Determine your monthly budget, desired | | | | I hope it helps. |