Misdirection is the secret to every magic trick ever created. It’s also the secret to the smoothest tricks performed by car salespeople. One classic old-school dealer close is called the 4-square close. It’s a specific type of close that’s been used for decades and is still employed by salespeople in car dealerships around the country.
Here at CarEdge, our mission is to provide you with the quality education and information that you need to secure a reliable car at a fair price. Today, we’re going to dissect this old-school dealer close and show you how to make it work in your favor.
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What Is The 4-Square Close?
Imagine you’re at the dealership to buy a new car, and the car salesperson comes back from the sales manager’s office to the cubicle she left you in. She’s holding a folded piece of paper and has a smile on her face. She says something about how the sales manager must be in a good mood, and she unfolds the paper as if it holds the secret to happiness.
What she shows you are four squares drawn on the paper. You’re about to experience the 4-square — a tried-and-true old school dealer close. Above the four squares you’ll see your name, the vehicle you’re interested in purchasing, and its MSRP. Below are four squares that are the foundation of this close. Those squares are:
- Sale price
- Amount offered for trade-in
- Cash down amount
- Payment ranges
She’ll break down each square, saying they’re giving you a great sale by reducing the MSRP. She’ll move on to the trade-in square and say you’re getting a great deal there, too. Then she goes over to the cash down, and say you “only” have to pay that amount. Finally, she then goes over to the payment ranges, there’s typically three of them, and she’ll tell you what they are.
After that, she closes: “Which payment range works best for you?” That’s the conclusion of this old school dealer close. She’s hoping that you simply pick a payment range and you proceed to the next step in the car buying process.
However, you’re probably not going to be happy with every number she presents to you (at least you shouldn’t be!) You’re going to go through the squares, one by one, and say you want better figures (a lower selling price, more for your trade, etc). She might discount the car a little more or up the trade-in value, but the two squares that she really manipulates are the cash down amount and payment ranges. She’ll say something like “it’s just math” as she changes numbers around to suit your requests.
The car salesperson might decrease what you put down, then increase your payment amount, then stretch the payment term. As you negotiate, she’ll keep moving numbers around (probably after multiple trips to the “manager’s office” to get approval) until you are satisfied with your payment amount, the term, and the money down. When that happens, she has successfully closed, and you move on to the next phase.
This entire process is misdirection. The car salesperson is focusing on cash down and payment terms while neglecting the other two boxes, trade-in value and sale price.
It’s a smooth old school dealer close. Unaware buyers fall for it time and time again, which is why it’s still in use. We’d love to see this old school dealer close fade away into obscurity, but that will take a well-educated public.
What can you do to counter this close? Can you avoid it altogether, or perhaps even put it to work for you?
Change the 4-Square Close to Work for You
Most car buyers are only interested in how much they are going to pay every month and how much they are going to have to put down. It makes sense since those are the numbers that have a direct impact on their bank account. You hear us talk about it all the time, we shouldn’t be payment shoppers, but naturally, most of us are. It’s okay, you simply need to be informed when you make your buying decisions.
However, focusing on those numbers writes a blank check for dealerships, as they can massage these two numbers to boost their profits. It’s why they use the 4-square close to keep you focused on money down and the payment amount.
Here’s what you do instead: you keep changing the focus to the other two boxes. You keep saying you want more off of MSRP, and you want more for your trade-in. Stand firm in your choice and say that you know they can do better.
Or, we can even take it further.
Take the pen from the car salesperson and add a new box, and label it OTD. That stands for out-the-door, and that’s the real figure you focus on. How much is that car going to cost you, total, to drive off the lot?
You want a grand total that factors in every expense (taxes, title, tags, fees, etc.) and is the absolute final number. You tell them they can keep reducing the sale price and boosting the trade-in value until you both agree on an OTD amount. These will be tough negotiations, but you’ll need to remain firm to secure the OTD price you’re after.
Once you have an agreeable OTD amount, then you can talk about the other boxes. You can discuss how much you need to put down and your monthly payment amount.
It’s vital to understand that these figures are secondary. Many people who focus solely on their monthly payments don’t even know how much the car ends up costing them. You don’t want to be in that situation; you want to walk away knowing you got a fair deal.
You should also make it clear that you want a specific monthly payment, and you only want to put a certain amount of money down. Don’t let them still manipulate these numbers, because they’ll try. Once you’ve agreed on an OTD price, you make sure they match what you want to put down and the payment terms you’re after, especially when you get back into the F&I office.
We’ll be honest; it will be difficult to enact the above plan. Car salespeople are trained to keep the focus on the two squares that make them money. Shifting focus back to the sale price and the trade-in value will be a challenge. Getting them to agree on an OTD amount will be even more difficult. You’ll have to employ every negotiation tactic in your toolbelt, but it’ll be worth it. You’ll avoid getting taken advantage of at the dealership, and like we always say, you can (and should) treat your trade-in as a separate transaction, that way you can focus on getting a fair OTD instead of getting confused between the sale of your vehicle and the purchase of a new one.
Walk Away at Any Time
Something you must remember is that you are always in control when buying a car. If the salesperson and sales manager won’t work with you on an OTD amount, or you don’t like what they offer you, walk away. You can say something like, “these figures don’t work for me,” and excuse yourself. Anything other than a firm and confident “no” will open the door for overcoming more objections. That’s what they’re trained to do, and you can bet they’ll do it.
If they keep pushing, make it clear that the numbers aren’t what you have in mind, so you’re going to leave and find another dealership. You should always have the mindset that you have nothing to lose by walking away. This is why we always say the best time to buy a car is when you don’t need to, since it allows you the comfort of knowing you can walk away.
You might discover that the dealership is actually more willing to work with you if you’re about to leave. Or they won’t, and you’ll leave and move on to the next dealership. Either way, you need to stand up for yourself and don’t let dealers take advantage of you with this classic old-school dealer close.
Can I then take the agreed on purchase price and trade in value to the finance office and say “I’ll pay CASH for that otd price? “ Or are the worksheet numbers contingent on the finance-related squares?
How should I handle the Four Square “if” I have nothing to Trade. Do I have a leg to stand on negotiating the OTD with no trade?