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Car Salesman Tricks and Deceptions


Celebrating 15 Years Negotiating ON-LINE in 2017 for the Benefit of YOU, the CONSUMER

Money mistakes or deliberate?

Money “mistakes” made by salespeople or sales managers, oops! I made a mistake  or  did you just catch them in a lie. 85% of salesman try and cheat me everyday!

The difference, I know when I am being lied to! You do not! 

You just accept what they say as the truth because you do not know any better and your first thought is not  “I know that is not right” you just don’t know all of the nuances of the car business to know you are being lied to! The result is you pay too much!

Even if you watch the sales manager input the numbers, you would not know that certain fees or charges are being added to the total.

You see, there are about a dozen screens to complete per customer for every deal. If the default screen is set to automatically add charges for: bank fee, m.v. fee, doc fee etc.  Then the total already includes all of the fees.

You have to know this or else the salesman will always try to add these costs “upfront” and essentially double charge all of these fees  and get away with itbecause you are not familiar with the Reynolds & Reynolds or ADP computer program he is running on his computer.

You need a professional who can see that the gross capitalized cost does not match the selling price and that fees have been added to the selling price without your knowledge.

Buyer beware!! What you do not know definitely costs you money!

Car lease price, car lease deals and price misdirection trick.

Car leasing, auto leasing, car buying, car financing all have one thing in common, monthly payments.

Have you ever noticed that car dealers always lump everything together and usually only want to discuss monthly payments. There is a good reason why salesman are taught “the art of negotiation”

The basis of this art is to only talk about :

  • How much money you can put down
  • How much money your trade-in is worth
  • How much money your monthly payment will be
  • How many months your loan will be

By simply using the 4 variables listed above 98 % of consumers purchase & lease automobiles everyday all over the united states. Almost everyone negotiates in this manner! Doctors, lawyers, nurses, union workers, hourly wage people, everyone. This method of negotiation is not good for the consumer.

Why do they negotiate like this?

The reason everyone negotiates this way is because the salespeople are trained on a daily basis (that’s right i said daily basis) to only negotiate in this manner. When you try and stop them and talk about the price of the car or your trade-in which has a payoff the salespeople tell you look, all that really matters is your monthly payment, if we can get your monthly payment to a number you can afford, do we have a deal now!

Thus, all you talk about afterwards are monthly payments. You have no idea what you are paying for the automobile, not knowing exactly how your trade-in fits into the picture, and you do not know the interest rate.

All the salespeople will tell you is $350 per month + your trade with $3000 cash out of pocket. We pay off your trade, includes everything, tax, m.v. etc.

You tell him you will not go over $300 a month! The salesman wants a deposit to bring to the manager to “work for you” and get a lower payment.

Then the sales manager will come out and speak to you. He will try and justify the $350 a month. If he can not get you to pay $350, he will then lower the monthly payment to your number, and then ask for more money out-of-pocket, and / or a longer term. Now he is making the monthly payment work for you while keeping their profit margin high.

Remember, salespeople are paid on commission. The more money the dealer makes on the car the bigger the commission is earned by the salesperson.

If you do not know the selling price and the interest rate (for finance or lease) you will always pay too much!

 Extended warranty trick.

Understanding extended warranties

There are 3 types:

  1. Vehicle manufacturer backed
  2. Insurance company backed
  3. That dealership only backed

The only warranty worth buying is backed up by the vehicle manufacturer some vehicle manufacturers only offer full coverage extended warranties (bumper-to-bumper warranty)

But others have different levels of coverage some examples include but not limited to:

  • Powertrain care
  • Base care
  • Extra care
  • Premium care

Pay close attention to the explanation of each level and ask to see a chart. You must see the correct level of coverage checked off on the warranty contract to be sure you are getting what you are paying for otherwise you will be disappointed.

Insurance company backed warranties such as those offered by AA or other carriers are not as comprehensive in coverage as a result, often repairs are denied.

Single dealership backed warranties are the most limiting because you must return only to that one dealership for warranty work.

 Watch out for “the warranty trick” most warranties are sold by the finance manager or sometimes a warranty girl will come to the desk just after you sign the deal and will make a pitch for you to purchase an extended warranty.

Beware extended warranties are one of the most over charged products sold at every dealership. If you do not know the dealer cost you will overpay.

I can prevent you from over paying on every after sell item offer to you by the dealership.

After sell items include:

  • extended warranties
  • alarm systems
  • remote starter
  • lojack retrieve system
  • wheel & tire replacement insurance
  • gap insurance
  • gap wrap (see section on gap wrap)
  • replacement insurance
  • paint & interior protection
  • and any other product offered

Gap insurance vs. Gap wrap

Gap insurance is usually standard on every vehicle manufacturers lease. However, there are exceptions,  Toyota Motor Credit Corp. (TMCC) does not include gap insurance. What this means is that any Toyota vehicle leased through TMCC does not have the protection of gap insurance. Gap insurance is optional and must be purchased by the consumer.

At present, Toyota Motor Credit Corp. (TMCC) Is the only leasing company that i am aware of that does not include gap insurance with every lease contract.

What is gap insurance?

If you have an accident and the vehicle is declared a total loss, or your vehicle is stolen and not recovered within 30 days the vehicle is declared a total loss.

Your insurance company is going to pay the market value of your vehicle not the balance owed on the lease.

Do not forget most people do not put money down on a lease  so the unpaid balance is always very high. Couple that together with the vast amount of depreciation that occurs in the first two years.

Now, you have a problem. The amount owed to the leasing company is higher than your insurance company obligation to pay you. The difference is call the gap. Gap insurance pays the difference between what your vehicle is worth (your insurance company check) vs. The amount owed to the leasing company. This amount is often very large ranging from $5,000 – $15,000 depending on how much the vehicle cost.

Gap insurance is a good thing to have in your lease contract.

Gap insurance vs. Gap wrap

I do not recommend gap wrap to my customers. Gap wrap was invented by dealers to sell to unsuspecting consumers who do not realize gap insurance is standard on the lease. They sell gap wrap with the same benefits of gap insurance without telling you that gap insurance is already included. They puff up the presentation with a bonus check for $5,000 above and beyond the full payoff to the leasing company.

They further explain you can use this $5,000 check towards your next lease and lower your monthly payments. What they do not tell you is that the check is made payable to you and the dealership and is only valid at that dealership!

Now, if you want to take advantage of the $5,000 check you must buy or lease from this same dealership. You are trapped, locked in, you can not go to another dealership and use the $5,000, and as a result you will be charged top dollar! You can not go anywhere else! What are you going to do?

Never buy “gap wrap” gap wrap is the trick  lease money factors are a form of interest rate on a leased vehicle

Money Factor, or Car Lease Money Factor, is used in car leasing, to specify a cost-of-money finance rate. It is similar, although not the same, as interest on a loan.

Money factor, which is sometimes called “lease factor”, determines how much you’ll pay in finance charges over the life of a lease. The higher the money factor, the higher your monthly payment and the more you’ll pay in total Lease Interest charges. Therefore, when shopping for a lease, you’ll want to look for the lowest money factor.

Money factor is always expressed as a very small number, such as .00150.
To convert to an equivalent interest rate (APR), simply multiply by 2400.
Therefore, in our example, .00150 multiplied by 2400 yields 3.60% as the equivalent APR.

Sometimes money factor is expressed in a more readable form, such as 1.50 which actually means .00150. This can be confusing to leasing consumers because it appears to be a low interest rate, which it is not.

Some salespeople will quote a money factor and lead you to believe it is an APR rate. This is a gross misrepresentation but it happens everyday in the car business.
.00150 = 3.60% APR which is MORE THAN DOUBLE the rate the the salesperson is leading you to believe it a good rate.

Some Leasing companies USE Interest Rates NOT Money Factors (Ford Motor Credit).
An APR Interest Rate of 1.50% APR can be converted to a money factor for comparison.
Simply divide by 2400 which in this case would equal 0.000625 Money Factor.

NOTE: the more ZEROS after the decimal point the lower the Interest Rate.
Example: 0.00001  =  24/1000 of 1% APR – YES, you read that right or approximately 1/42 of 1% APR
Example: 0.0001  =  24/100 of 1% or approximately 1/4 of 1 % APR
Example:  0.001  =  2.4% APR


Well, it just so happens that I have a friend, who recently finished a stint on the car lot. He agreed to meet for a cup of coffee, and I picked his brain about the current state of the art of selling cars and just what this means for shoppers.

What kind of dealership did you work at?
It was a medium-size, triple-brand domestic dealership in the South Bay [of Southern California]. It wasn’t one of those high-pressure, high-volume chain outlets, more of an easy-to-deal-with family-owned and -run store. Except for the Internet department and some cosmetic upgrading, it was about as old school as you could get.

So let’s get down to it — how long did you last?
My tour of duty was six months.

Big picture: How did you like it?
Well, you’re dealing with customers who would rather have root canals than talk with you. And the rotating day/night and weekend schedules don’t always jibe with family and friends either. Two days off every three weeks. Basically, it’s a tough gig.

Sell any cars?
I hit the lot as gas prices soared and then the credit crunch hit. As a “green pea” I sold three or four cars a month — and some of those were shared deals. With $2,000 a month salary and $200 per deal minimum commissions, I could just barely pay my bills.

Where I worked, we had teams of salesmen. If one guy wasn’t making progress, we turned the customer over to someone else. They still do that?
“Turning” a stubborn customer to another salesperson was one of the golden rules at my dealership. If you didn’t, you’d get blown out.

Right. Turning makes sense from the store’s point of view — they get two shots at the customer and then a manager takes a crack at you.

How does the customer like it?
They don’t. Would you? If you have a relationship with your first salesman, you wouldn’t want some new guy suddenly appearing.

Good point. What training did you get?
Videotapes and back-room pep talks from the veteran sales guys?

I was pleasantly surprised here. There really was an effort to serve the buyer’s needs. I was taught a six-step process designed to build rapport, find the right vehicle, get ’em inside and seal the deal today. At the end of the day, though, it was all about putting butts in seats and racking up numbers on the big sales tote board.

Speaking of butts in seats… How did you get people into the dealership?
Balloons…those ones you see bobbing over the cars and trucks as you drive by the auto mall. Before selling cars, I had no idea of the importance afforded them for attracting passers-by.

Where I worked, we had to go to sales meetings whether we were working or not.
Yeah, the staff cheer leading meetings were bright and early Friday mornings to get everyone psyched up for the weekend sales blitz. They were always hammering us with, “Don’t pay attention to the economy, you can make some cash out there…let’s go sell some rides! And just to sweeten the pot, get 10 write-ups by Sunday night and we’ll give you a $25 spiff!” It was like a religious revival meeting.

How did the veteran car salesmen interact with the new guys?
As a “green pea,” it took awhile to earn even a shred of respect from the veterans. But they were great at dispensing advice about negative stereotypes — these people always grind you, those folks are credit roaches, etc. So the newbies tended to stick together, and there was the usual gossip about each others’ sordid lives of sex, drugs and rock ‘n roll. It reminded me of “high school, with ties.”

Did you have an “up system” to choose which salesman
would get the next customer?

I would’ve killed for an “up system” as opposed to the inane “car-calling” arrangement we had. We’d stand on the front corners of the dealership and verbally call cars, to claim them, as they turned in from the street. The veterans not only randomly called hundreds of cars as they sped by in the off chance one might actually pull in. They also talked facing the street, making us put our backs to the action. Guess who wound up snagging most of the drive-ins?

I remember we had a “tower” where the managers watched the salesmen
out on the lot with customers. Anything like that where you worked?

Thankfully, no tower. We took our judgment at eye level in a glassed-in sales manager’s office. A camera system also watched over us 24/7.

I ran into a car salesman recently who said,
“No one uses the four-square anymore.” How about your dealership?

Next to the gift of gab, the “four-square” worksheet is a salesman’s No. 1 tool. We used it to create doubt in the customer’s mind about the figures, while maximizing the value/price of the vehicle as close to MSRP as possible: minimizing the amount you’ll accept for your trade-in… maximizing your down payment…and maximizing your monthly payment.

Can you describe the negotiation strategy you used?
It was limited to building maximum value in the vehicle and minimizing what you thought your trade-in was worth — leaving you more open to accepting our terms. We’d then take a completed credit application and your “offer” to the sales office where the real fun begins. This is where you realize that I really am your friend because you’re about to meet the “closer.”

Was there anything that surprised you about selling cars?
I was surprised by the psychology that went into it. We were taught that to sell a car you had to make them a friend, and were given specific phrases and what they called “word tracks” to use throughout our conversations. Rapport-building was so important, we weren’t allowed to wear sunglasses during our introduction so we could better connect with the customer. But we could don the shades once we were under way because on the lot, in the summer, with the sun pounding down and all that chrome and glass reflecting, it was like a convection oven.

Any funny or outrageous things happen to you while selling cars?
I took an older gentleman on a test-drive in a loaded crew-cab pickup. It wasn’t until we hit the freeway with his foot to the floor that I noticed we’re running on fumes. Back on surface streets, crossing a busy intersection: silence…. We coasted to a stop, blocking the slow lane. I called the store for help and 20 minutes later a porter shows up without any gas, but they took my customer back to the dealership. Suddenly, a cop pulls up behind the truck to block traffic. Then this young parolee with a suspended license flies around the corner and accelerates into the back of the cop car. After a long wait I finally get a splash of gas, provide my witness statement and limp back to the store. Two-and-a-half wasted hours, one lost customer and all I got was a lesson about double-checking gas tank levels.

Bottom line, do you feel that the selling process described in
“Confessions of a Car Salesman” has changed?

Selling cars seems to be a timeless sort of business transaction.
“Confessions” rings just as true today for me as when it was written.

So there are a lot of dealerships that are still running the same game.
What about shoppers? Have they changed?

I hit the lot when sales were going in the tank. People used to come in with wads of cash and throw like $10 grand on the table and expect us to take that for a new truck. It was crazy.

Would you say the shopping experience is more enjoyable for customers?
No, I think a great many car buyers just want to get the whole thing over with as quickly, painlessly and with as little bloodletting as possible.

Dealers claim a good car salesman can guide a buyer
through a complicated transaction.

That’s the way it’s supposed to work. But how can you make a living? The sales force at my dealership was pretty bare-bones. And I drive by that dealership all the time — now, there’s even fewer salespeople out there. I don’t really know where it’s headed.

While the process of selling cars has changed very little, everything around the car lot has changed enormously. Still, anyone venturing into this environment should be forewarned and prepared to protect their best interests. While it’s sad that many dealerships will close and salesmen will lose their jobs, few people will shed a tear for the dying tradition of American car buying.


The F&I man waits in the back of the dealership for unsuspecting customers so he can increase the profit for the dealership and boost his commission.

“Congratulations, you’re getting a great deal!”
the car salesman says, pumping your hand.
“Let’s sign the paperwork and you’ll be on your way in your new car!”

At first you’re relieved — the negotiating is over. But then the salesman walks you down a back hallway to a stark, cramped office with “Finance and Insurance” on the door. Inside, a man in a suit sits behind the desk. He greets you with a faint smile on his face. An hour later you walk out in a daze: The whole deal was reworked, your monthly payment soared and you bought products you didn’t really want.

What happened to your great deal?
You just got hit by the “F&I Man,” also called the finance officer. He waits in the back of every dealership for unsuspecting customers so he can increase the profit for the dealership and boost his commission.

In this four-part series, written by veteran auto finance manager, you will learn the F&I man’s tricks and how to avoid them. When you’re done, you’ll be ready to safely navigate this crucial part of the car buying process, and the F&I man will never work his “magic” on you again.

Part I

From Selling Vacuum Cleaners to Selling Cars

In the Saturday morning sales meeting,
the general manager treated this F&I guy like a hero
for making so much money for the dealership.
But I remember sitting there, thinking,
“This isn’t right — he just stole $6,000 from those people.”

Believe me, I never set out to be an automotive finance manager. I was just looking for a good job with decent money so I could finish my education. But thanks to a few strange twists and turns, I went from selling vacuum cleaners door to door to being a used car salesman for two months to becoming an F&I manager for six years.

In that time, I made serious money while closing 6,000 new and used car sales and leases. I sat across the desk from hundreds of people as they nervously signed the contract on their first car, or upgraded to that shiny new truck or SUV they had wanted for years. I advised them on which loans to take and persuaded them to buy extended warranties, paint protection and undercoating. While doing this, I peered into the most intimate details of their finances and their lives: their salaries, savings and investments. Their mistakes were revealed to me, too: overdue bills, bounced checks, foreclosures and repossessions. In fact, I probably knew more about my customer after 15 minutes than their friends knew about them in a lifetime.

During my time on the job, I never knowingly lied to my customers or cheated them. Of course, I did make a commission on the items I sold and the loans I wrote. And the dealership made a profit, too — what I considered a fair profit.

But I can’t always say the same for the other people I worked with. There was this one guy called the “Shredder.” A couple came in and wanted to use their trade-in as a down payment on a lease. They were told they were receiving an $8,000 credit for their trade-in. In actuality, they were only given $2,000. The next day, at the Saturday sales meeting, the general manager brought dough nuts, as he always did. On this day he brought a huge dough nut for the Shredder and treated him like a hero because he had made so much money for the dealership. But I remember thinking, “This isn’t right — he just stole $6,000 from those people.”

But the real point is simple: If you don’t know what to watch out for and you run into someone like the Shredder, you can lose your shirt. If you have a complicated deal — with a trade-in, manufacturer financing and extra products — thousands of dollars are at stake. But with a little bit of knowledge and some preparation, the auto finance manager won’t be able to lay a glove on you. How?

Before I get to that, I’d like to tell you a little bit about how I came to work in F&I. Then you’ll have a better understanding of my world, and my advice will make a lot more sense.

The Worst Sales Job Ever

My father runs an accounting firm in Europe, and I could have worked for him and made an easy living there. But I wanted to be a self-made man, so I moved to the United States and completed an undergraduate degree at a small college in the Midwest. Before going to grad school, I decided to get a part-time job — anything that would give me the maximum amount of money for the minimum amount of time. I began job hunting and landed a position as a vacuum cleaner salesman. I figured if I could succeed at a tough sales job like this, I could succeed at anything else I tried later in life.

I received a few days of training and then was given a demonstration model vacuum cleaner to lug from door to door. This was in the middle of winter, in the Midwest, with the temperature sometimes 20 below zero. I remember a few times that, when someone answered the door, my face was so frozen I couldn’t even speak.

In my first week on the job, I was actually able to make five sales, so the company gave me my own vacuum cleaner, which they told me was a huge honor. I needed a better car to carry my samples around in, so I went to the local dealership. When I picked out a car and we reached an agreement on the price, I was told that I would be sent into the F&I office. I’d never heard of this before but I assumed this was someplace where I would sign papers.

While I was waiting, I overheard some of the car salesmen talking to each other.
One guy said, “I made a grand on my last sale. That was sweet.”

This was music to my ears. I mean, here I was dragging this vacuum cleaner from door to door, hoping to find buyers. But at the dealership, I realized the buyers came to you! I asked the sales manager if there were any openings at the dealership and he gave me a job in the used car side of the dealership — which was where the real money was. Most people don’t realize it, but the profit is much higher in used cars than in new cars.

Ex-Con Car Salesman

In my new job, I became a member of a four-man sales team, and made a surprising discovery about them — they were all ex-convicts. One guy robbed a bank and got arrested a few weeks later. Surprisingly, he was a really nice guy. You almost felt you could trust him with your life, which you probably could at this point because he was so afraid of going back to prison.

Another guy on the team had robbed a convenience store with two other guys. After serving four years in state prison he was left with this lingering hatred for the sound of a guards keys jingling as he walked through the cell block. He really jumped whenever he heard that sound. That was a real problem for a guy working in a car dealership.

The last guy in my team had been in prison for making pornographic movies. Oddly enough, he was the best salesman of the group. He could walk right up to anyone on the lot, strike up a conversation and make them trust him and feel completely relaxed.

It took me a few days to finish my training and then I started selling cars. Right away, I found that my vacuum cleaner selling was good preparation for this job because I’d learned the importance of isolating objections. If a customer said, “It’s too expensive,” I would say, “OK. But other than the price, is there any other reason you don’t want to buy it?” This approach worked really well on the car lot.

F&I First Impressions

After I’d been selling cars for a while, I became aware that right after I sold a car my customers disappeared into the finance and insurance offices. I began to wonder what went on in the three finance offices we had in the back hallway of our dealership. The F&I guys looked like banker types to me since they always wore nice suits. A lot of them had the condescending attitude of a loan officer interviewing a person who is probably not going to qualify for the loan.

While I was annoyed with the arrogant attitude the F&I guys had, I was kind of fascinated by what they did. It was obvious they made a lot of money because my commission slips clearly stated how much their slice of the pie was. One deal I saw had a “back-end” profit (i.e., what was made in the F&I room) of $8,000! If the F&I guy got 15 percent of that, it was $1,200 — a lot of money for a half hour of signing papers. I began to think I might angle for a job in the F&I room since I was good with numbers and my sales skills were strong.

much moneyAfter only two months of selling cars I heard about a position in the F&I office of another dealership nearby. It was only an assistant position, with a minimum salary. But I decided it was just what I wanted. I was young, ambitious and wanted to make as much money as I could. I applied and got the job. My first thought was, now I’ll find out what goes on in the F&I room — and how auto finance managers make so much money back there.


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