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Undoubtedly, buying a car is one of the most challenging purchases you’ll ever endure (the key word here is “endure,” because it really can be a test of wills to buy a car). For many, purchasing a car, truck, or SUV is the second largest expense they’ll ever have, second only to buying a home. You’d think that spending such a large amount of money would be a happy and joyous occasion … The reality of buying a car couldn’t be further from that aspiration.
Buying a car is certainly a lot different than when I first started in the car business in the 1970’s. We’ve seen a lot of changes that are for the better (and quite a few that are for the worse), but no matter how you look at it, buying a vehicle is still one of the most frustrating things we have to do every few years. I sold cars for 43 years, and even I think the buying process is annoyingly aggravating.
That being said, there is a difference between getting annoyed, and getting taken advantage of, and my goal today is to help you avoid the latter. There are a few telltale signs of a shady car deal, and my hope is that you never experience any of them. That being said, there’s a strong likelihood that you will, and in an effort to help you protect yourself, I’ve written this guide.
Without further ado, let’s dive into the three signs you should walk away from a car deal.
The seller won’t show you a CarFax or reconditioning report
Regardless of if you’re purchasing from a private party or from a car dealership, if the seller of the vehicle won’t show you a CarFax report or the reconditioning repair work, that’s a sure sign that you should walk away from the car deal.
When car dealers buy used cars (either as trade-ins or from auction) they inspect them to make sure they are in good condition for sale. Typically this entails some “reconditioning” work. Reconditioning is the industry term used to describe the process of getting a vehicle “showroom ready”.
If a dealer won’t show you the repair order for the reconditioning work that’s a telling sign that you should walk away from the car deal. It begs the question “What is the dealer trying to hide?”
The same thing goes for when you buy from a private party. If they won’t share previous service records and an up to date CarFax, that’s a red flag and clear sign that you should walk away. Poorly maintained vehicles can be a seemingly endless money-pit, and you don’t want to be the one paying for a laundry list of future repairs simply because a seller didn’t maintain their car well or disclose to you issues it had that would be apparent on a CarFax.
This rule applies to purchasing vehicles from rental car companies as well. It’s well known throughout the automotive industry that the CarFax reports on rental cars can be lacking in detail. This is because CarFax collects information about every vehicle from their network of data providers. Rental car company owned repair shops are not a CarFax data provider, meaning CarFax is “in the dark” when it comes to a lot of the history of a rental car. That being said, it’s of the utmost importance that the rental car company shares with you the service records and reconditioning repair work done on a vehicle.
Another thing to recognize as a “red flag” is if the dealer adds an erroneous “reconditioning fee” to the selling price of the vehicle. The dealer’s cost to recondition the vehicle is already factored into the selling price, so an additional “reconditioning fee” is simply an attempt to make extra profit off of you. Again, this is a sign to walk away from the deal.
They won’t let you get a pre-purchase inspection
If the seller of the vehicle won’t let you get a pre-purchase inspection completed on the vehicle, this is a tell tale sign that you should walk away from the deal. Again, it begs the question “what is there to hide?”
Obviously if you are purchasing a new vehicle you will not get a pre-purchase inspection completed on a car, however for any used vehicle (even a certified pre-owned) you should consider a pre-purchase inspection, and if the dealer or seller won’t allow it, you should walk away.
Recognize that not every car dealership will allow you to drive a car to your mechanic’s shop to inspect the vehicle. This is different from them not allowing the inspection to take place at all.
Some dealerships have policies that restrict their willingness to move vehicles around to a mechanic’s shop for pre-purchase inspections. That being said, they should allow you to have the mechanic come on site, or be willing to take the vehicle to the mechanic’s shop if you put down a refundable deposit on the car. Some dealerships are nervous that if they take a car to a mechanic’s shop for a pre-purchase inspection they may miss a potential customer who is interested in buying the car while it is away.
During my 43 years in the business I never had an issue allowing a customer to get a pre-purchase inspection. I gladly endorsed it. Typically we would have one of our lot attendants drive the car to their mechanic’s shop to make it easier on the customer. If a dealer is unwilling to support your pre-purchase inspection desires, again, that is a sign to walk away.
They offer you different prices depending on if you finance with them or not.
This tactic, to offer two different prices that are dependent on you financing your vehicle with the dealership, is not only unethical, but counterproductive to being customer-centric. Advertising a price that requires a customer (you) to finance through the dealership so that the dealership can make extra profit is not illegal, but it’s certainly close to the line!
It’s well known that car dealerships make most of their money from the “back-end” of a car deal. This is where they sell insurance products (like an extended warranty), and originate loans. If the dealership where you are looking at buying a car wants to charge you more for the car if you have your own financing, to me, that’s a red flag.
This also applies to other insurance products (like extended warranties). Let’s say you’ve negotiated a price with your salesperson and you’re now in the F&I (finance and insurance) office. The F&I manager tells you that you can get an extra half of a point off of your interest rate on the loan if you buy their extended warranty. What do you do? You get up and walk away!
Tactics like these are simply signs of car dealerships that are looking to take advantage of their customers. Again, they’re not illegal, but they certainly toe the line.
Bonus fourth reason to walk away from the car deal: they charge ridiculous fees
Buying a car is the polar opposite of any other purchase we make. When you go to the grocery store and buy some cereal you pay the price of the cereal and sales tax, that’s it.
When you buy a car you pay for the price of the car, and then a laundry list of fees (some of which are legitimate, many of which are bogus). As a car buyer, how are you supposed to know what’s fair and legitimate, versus something that is purely dealer profit?
I’ve written about legitimate and illegitimate car dealer fees in the past, but it’s worth restating them here. Specifically stay away from dealers that try and charge you any of these fees:
Buying a car is extremely confusing. There are add-on offers, sales prices, the out the door price, special rebates … The list goes on and on. By the time you finally agree to the numbers, you’re left wondering, “How do I know if I am getting a good deal or not?”
And then, after the arduous task of negotiating and agreeing to a selling price with your salesperson, you’re hit with even more numbers, products, and offers in the finance and insurance office.
Answering the simple question, “Am I getting a good deal on a car?” Is comparable to rocket science! It’s truly ridiculous!
Here are our suggestions for how you can answer the burning question: How do I know if I am getting a good deal on a car? If you prefer to watch instead of read, simply click on the video above.
Let’s dive in.
Are You Getting a Discount off the MSRP?
Generally speaking, no one should pay full price for a car. Nobody. Unless you’re buying the most in-demand vehicle on the planet, you should really get some sort of discount off the MSRP.
MSRP stands for Manufacturer’s Suggested Retail Price. It’s the dollar amount that the manufacturer tells the dealership that they should charge for a new car. New is an important word here … You’ll never pay the MSRP for a used car, but many times car dealers will try and sell new cars for their MSRP price. You shouldn’t pay that much.
One of the clearest ways to answer the “How do I know if I am getting a good deal on a car?” question is to look at the discount you’re receiving from the dealership. How much are they deducting from the MSRP? Finding this answer can be challenging, and that’s why we always recommend asking for an itemized out the door price quote from the dealership (something like what you see below), so that you can clearly see the dealer discount.
If you’re like most car buyers (who buy a car once every few years), it can be hard to determine how much of a discount you should be receiving from the dealership. This is exactly why we built the Market Price Report, to help you understand what a “good deal” looks like for the chosen vehicle. Getting $2,000 off the MSRP might be asking too much for your future car, but it could also be asking too little. Enter a VIN and see what the suggested offer is.
Do your research before you head to the dealership. You should have a sense for how much of a discount you can receive before stepping onto the lot. If the dealer won’t give you any discount off the MSRP, leave and try another dealership. They likely aren’t the only dealership selling that car within 100 miles, and it’s worth shopping around for someone who will work with you. If you’re buying used it can be a slightly different experience, but the same principle applies; you should be able to get some discount from the selling price.
Are You Paying for Anything You Don’t Need?
When you buy a car, be prepared for an avalanche of add-ons and accessories. Car dealers have found new ways to make extra money, and adding all sorts of ancillary products into your car deal is one of the most common tactics.
Are you prepared to say no? Or do you actually want what’s being offered? This is one factor to examine when asking, “How do I know if I am getting a good deal on a car?”
Let’s break down the common offers that you’ll receive at most car dealerships:
GAP insurance. If you’re financing your car, you better believe that you’ll be offered GAP insurance. Short for Guaranteed Asset Protection, this is a special type of insurance that we hope you’ll never have to use. If your vehicle is totaled in an accident, your normal car insurance will give you a payout based on the market value of your car. But what if you still owe more than the market value? That’s when GAP insurance steps in; it’ll cover the rest. Understanding whether or not you actually need it depends on how much equity you have in the car when you drive it off the lot. If you put $500 down and financed the rest, you need GAP insurance. If you put 50% down, you probably don’t.
Prepaid maintenance plans. These plans cover all the standard maintenance that your new car will need for the duration of the agreement. This means oil changes, air filters, and maybe a belt here and there, which can actually save you money since dealerships discount their service rates to ensure your return business. That’s right, these plans are pretty much dealership retention tools. They can be a win-win though, depending on the price. Since they discount their service rates to keep you coming back, you could very well end up getting the cheapest oil changes in town.
Vehicle Service Contract (VSC).Colloquially known as an extended warranty, a VSC provides longer coverage than the manufacturer’s warranty. We tell everyone to never buy these at dealerships (at least not at list price). Not only are they marked up substantially, but they begin when you buy them. If you’re buying a new car you’ll already have a manufacturer’s warranty, which means you don’t even need it until after the three years or 36,000 miles. (There is still a reason to buy one on a new car, but don’t expect dealers to explain this to you). You also need to consider if you’re going to keep the car past the included warranty, or if you want to get rid of it in a few years. Keep in mind that you can add a VSC to your car several years down the road; you don’t have to do it when you buy the car. How do I know if I am getting a good deal on a car? If you’re buying the VSC at the dealership, the chances are that you are not getting a good deal.
Prepare yourself for each of the above offers; you’ll be seeing them. Make sure that you come ready with your answers. Be firm and confident with your decisions, and don’t leave any room for overcoming objections.
Agreeing to the selling price of a vehicle is only part one of your car buying saga. Part two comes when you enter the F&I office. That’s where you’ll receive the offers we discussed above.
Let’s say you actually want some, or all, of their ancillary products. Do you simply say yes? Of course not; you need to negotiate! How do I know if I am getting a good deal on a car? Discounts on ancillary products are a pretty clear indication.
The VSC (a.k.a extended warranty), GAP insurance, maintenance plan, and anything else they offer you are all negotiable. Don’t accept their numbers at face value (especially when they’re rolled into your monthly payment). Let them know you’re interested in each offer for X amount or not at all. Play hardball with them; you can bet they’ll do it with you. Use everything you’ve learned about negotiating to your advantage and get the deal you deserve.
If you’ve already purchased your car and think that you could’ve gotten a better deal on some of the F&I products, check your agreement. Most F&I products have a cancellation policy where you can get your money back if you cancel within a set period of time.
One of the most important things that we can teach you is that you always have the most powerful negotiation tool in your back pocket: you can choose to walk away. There’s nothing keeping you at the dealership and nothing making you go through with a deal that you don’t feel comfortable with.
Are You Happy with The Deal?
A good deal is a state of mind. We can talk numbers and discounts all day long, but if you’re not happy with what’s being offered, it’s not a good deal.
If you are happy, and the dealer is happy, it’s a good deal for everyone. Sometimes, it’s as simple as that. You don’t need a 50% discount and a free extended warranty to brag about your amazing deal. You only need to be happy with the car you bought and the terms of the agreement.
How do I know if I am getting a good deal on a car? It boils down to your state of mind when you drive away in your purchase. If you feel remorse, it was a bad deal. If you’re happy, it’s a good deal. If you haven’t made your purchase yet, imagine how you’d feel with X price versus Y price. Which number should you shoot for to seal the deal and drive away with a smile?
At the end of the day buying a car is really difficult, and we empathize with you greatly. By taking the time to even read this article you have educated yourself more than 99% of all car buyers. The likelihood that you’ll get a good deal has increased exponentially thanks to the fact that you have researched and informed yourself about the car buying process.
CarMax just announced a new program that is the first of its kind: The CarMax Love Your Car Guarantee. We scoured the Internet for every piece of information we could find on this new guarantee to put this post together for you.
In this CarMax Love Your Car Guarantee review, we’re going to break down exactly what’s in the program. Next, we’ll take it a bit further and compare this new program to their competitors. Lastly, we’ll discuss how you can negotiate with CarMax to get the best price for your car.
Get in…let’s go!
What is the CarMax Love Your Car Guarantee Program?
CarMax is the country’s largest retailer of used cars. They changed the game by being one of the first companies to introduce a “no haggle” experience when buying and selling used cars.
Now, the CarMax Love Your Car Guarantee program is set to bring about another change in the world of used cars. This recently announced program has two distinct features that consumers are going to love:
24-hour test drives
30-day money-back guarantee (under 1,500 miles)
Both of these features are game-changers. Nobody else is offering anything close to these right now. It make buying a car from CarMax more tempting than ever before (someone at CarMax did their consumer research well).
The 24-hour test drive allows prospective car buyers to take a vehicle home, see if it fits into their garage, see how their child’s car seat fits, and get a general feel for the car before deciding if it’s right for them.
The 30-day money-back guarantee, offered as long as the car has 1,500 miles or less driven, provides peace of mind for weary car buyers. If you notice something that you didn’t catch during the 24-hour test drive or you simply change your mind, you can return it within 30 days to the same CarMax location. As far as this CarMax Love Your Car Guarantee review is concerned, this is revolutionary.
CarMax has had a money-back guarantee for years, but it’s only been for a period of seven days. Increasing the number to 30 days is a confidence inspiring move. It shows that they believe you’ll love the car you choose, and even if you don’t it’s not the end of the world.
These features come together to create an entirely different used car buying experience. We’re excited to see how the rest of the used car companies react to the CarMax Love Your Car Guarantee. We’re looking at you Carvana, Vroom, and Shift.
CarMax Love Your Car Guarantee Program vs. Their Competitors
This CarMax Love Your Car Guarantee review wouldn’t be complete without comparing the program to their competitors.
Some automakers, including Cadillac and Buick, have 24-hour test drives available for their new vehicles. However, nobody else in the used car world is offering a 24-hour test drive. CarMax stands alone in letting customers take the vehicle home and try it on for size.
However, CarMax isn’t the only one in town offering a money-back guarantee. Here’s a snapshot of key competitor’s offerings:
Carvana: 7 days, up to 400 miles driven, with a $1 fee per mile after that
Vroom: 7 days and up to 250 miles driven
Shift: 7 days and up to 200 miles driven
AutoNation: 5 days and up to 250 miles driven
As you can see, seven days has been the standard for years. As these app-based used car companies have popped up, they’ve mimicked CarMax’s offering. Now, CarMax has pulled ahead substantially.
We’re excited to see how these newer competitors react to the new CarMax Love Your Car Guarantee program. Will they copy it? Or maybe even surpass it? Only time will tell.
How Do I Negotiate with CarMax?
CarMax and all of their competitors promise a “no haggle” car buying process. While this might seem like a relaxing way to buy a vehicle, it can often work against you. We’ve previously talked in-depth about how you can still negotiate with “negotiation-free” car dealers, but it’s worth covering the main points in this CarMax Love Your Car Guarantee review.
There are three things that you can still negotiate with every “no haggle” used car dealer:
Interest Rate
The dealership might approve you for a lower interest rate than what they actually offer you, and then pocket the difference if you agree. Negotiate with them to lower your interest rate; they don’t want to lose a car sale over the interest rate.
Extended Warranty and Other Add-Ons
Did you know that you don’t have to buy an extended warranty when you purchase your car? This is also true for GAP insurance, tire and wheel protection, and anything else they offer you. You can buy them all from a third-party down the road and potentially save money. It might be better to decline their offers and just shop around later, but if you want to buy these extras from the dealership, make sure that you negotiate. The cost of all of these warranties is inflated to provide the dealership with a profit.
The Sale of Your Vehicle
If you’re trading a vehicle in, negotiate how much they’ll give you for it. CarMax and other used car giants are always in need of fresh inventory…they want your car. They’d rather buy a car from you than a dealer auction where they don’t really know what they’re going to get. Let them know how much you can get from a private party and use that to drive up your trade-in value.
Keep these three areas in mind if you decide to do business with any of these used car giants that promise a “no haggle” process. You should never simply accept a number they give you…negotiate!
Love Your Car Guarantee: What Else Should I Know?
While we’re excited about the new CarMax Love Your Car Guarantee program, you should do your due diligence and read through the fine print for both the 24-hour test drive and the 30-day money-back guarantee. CarMax has not made sample contracts or agreements available online for their new program.
If everything is as good as it seems, this new CarMax program could shake up the world of used cars. We wouldn’t be surprised if Carvana and other competitors start coming out with new policies to try to keep up.
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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If you prefer to watch instead of read, simply click on the video above.
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.
Over the years I’ve heard (or used) every old-school dealer close in the book. “Closes” range from the salesperson putting “soft” pressure on you while acting as your “friend” to more advanced tactics like the 4 square. There is a certain art to it (as there is in all sales), but it’s not the type of art most people like (especially not when they’re at a car dealership).
Our job at CarEdge is to help you be a more informed and educated car buyer. Today we’ll cover one of the more common “close” tactics called the 3 “m” close. Although it is a bit old-school a lot of dealerships still employ it, and unfortunately new people to the industry are learning it.
The 3 “m” close attempts to overcome the common objections that someone might have when they’re close to signing the dotted line, but aren’t quite ready. Today, I’ll walk you through exactly what’s going on with this close, how to spot it, and what to do about it. As always, if you don’t feel like reading, simply click play on the video above.
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You need to be ready to walk into the dealership with confidence, and my hope is this article will help. Let’s dive in.
The First “M”: Is it the Machine?
The three “M” close comes into play when a salesperson hears a customer’s first objection, which is often “I need to think about it.” At that point, salespeople are trained to go into a maneuver like the 3 “M” close. You’ll hear something like, “Do we have the right machine picked out for you?”
When you hear this (or some variant of it), recognize what the salesperson is doing, they’re beginning to get into the 3 “M” close, and you just heard the first “M”; is it a problem with the “machine.” You could bet money that the following two M’s are next. This is a dealer favorite old-school close.
The goal of this M is simply to get to you to say that you like the car that’s been picked out and that it’s the right car for you. After all, if you like the car, then there’s some other issue that needs to be addressed. That’s the essence of this old-school dealer close: break down the three common barriers and seal the deal.
If you say it’s not the right car, then they’ll start showing you other vehicle options. If it’s an issue with the machine, your salesperson will act fast to find another vehicle on their lot that meets your needs, wants, and desires.
The Second “M”: Is it Me?
A decent salesperson will set up this M by saying something like, “Nobody wants to do business with someone that they don’t like, so am I the problem?”
It’s human nature not to want to hurt someone else’s feelings, so it’s almost a guarantee that you’ll say something along the lines of “No, of course you’re not the problem.” People usually want to avoid conflict, so it’s highly unlikely you’re going to say you don’t like your salesperson, even if you can’t stand them.
The car salesperson might even rope in other people that you’ve met from the dealership and say that everyone here would do anything to make sure you got in the right car. Everything said at this step is meant to set themselves up as your best friend who’s just trying to help you get into the right car.
Once they verify that they aren’t the problem, they’ll move on to what probably is the actual problem: the money.
The Third “M”: Is it the Money?
The final M is typically where the actual objection is taking place. You might like the car, you might like the salesperson, but if the numbers don’t add up, you’ll have an objection to signing your vehicle purchase agreement.
At this stage, everyone is on the same page, and the salesperson knows that the money is the issue. Don’t be surprised when they still ask if it is, it’s all part of how they were trained. Once you confirm that the money is the problem, they’ll break down how it’s a good deal or possibly waive some fee that should’ve already been waived.
One tactic that we saw when this topic was brought up on our YouTube channel was pushing to let the customer take the car on an “extended test drive.” This is a bit of a gray area, but can be legitimate. Some dealerships do actually let you bring the car back if you don’t like it after a few days, but you absolutely need to have it in writing. If you don’t get it in writing, then you’re just buying the car. Of course, if you get in a car accident during your extended test drive, you’re the one on the hook, so at the end of the day, I’m not a big fan or proponent of taking a dealer up on this offer.
Another option is that they switch to another closing tactic that’s more specific to the money issue. The purpose of this old-school dealer close is to have you admit where the problem is so that they apply more pressure in that specific place. If it were a game of chess, the 3 “M” close is getting you to move your pawns out of the way so they can strike where it matters.
Whatever their next step is, you can be sure it’ll involve overcoming your objection about the price. They might pull up vAuto and show you that they’ve got the best price around. They might also break down the financial figures one more time to show that the financing agreement being offered is incredible.
One of the things customers say that leads into the 3 “M” close is the classic, “I need to think about it.” Dealers hear that countless times in their careers and the 3 “M” close is used to overcome this objection. Car salespeople are well aware that “I need to think about it” is often an attempt to get out of the dealership, and salespeople are wired to think “How can I close this deal now?”
Unfortunately, your attempt to leave is their attempt to close you. Their job is to help convince you to sign the paperwork today, not tomorrow, not next week, not in a month. That’s where the 3 “M” close comes in. In theory, every objection is dismantled, and you’ll drive away in your new car.
Here’s what you do. Memorize this line because it’s your way to avoid the entire close: “I’m not ready to make that decision.” Short, simple, and conveys all the information they need.
It’s a similar concept to “I need to think about it,” but it leaves less room for pushy sales tactics. If the car salesperson keeps pushing, repeat it. You can always get up and walk away. It’s better to face a temporary awkward situation than sign up for a car payment that’s just a bit too high, and trust me, it won’t be the first time in that salesperson’s career they’ve heard “no!”
Don’t Fall for the 3 “M” Close! Say No!
Your absolute best weapon against this close is saying “no” at any point. You’re always free to say “no” and walk out of the dealership. Every car salesperson has heard no before, and they’ll hear it again. Don’t be afraid to make them hear it one more time if you’re not ready to sign the dotted line.
We firmly believe that arming you with information is the best way to prepare for the sales tactics that car dealerships employ. Not every dealership is going to roll out this old-school dealer close, but many will. Now that you’re ready for it, you should also be ready to say “no” and walk out.
CarEdge Insights
