Slappy Doo Hoo wrote:
The four squares. It's very common. Selling price, trade-in allowance, monthly payment, and down payment. Usually used when negotiating price and trade-in value for your car. What payment are you looking for? How much are you looking for with your trade? So if you "low-ball" them on the selling price, they'll ask how much you're looking for on your trade...because you can't heavily discount both, Mr. Customer.
I understand that a car dealership needs to make money, however, this four square thing is a tactic used by shady car salesmen to confuse the customer.
"Four-Square" Negotiating
Here's one old-time ploy dealers use to fudge the numbers without younoticing: Mark Eskeldson, author of What Car Dealers Don't Want You to Know, explainsthat a salesperson will sit you down in front of a blank piece of paper divided intofour quadrants. In each quadrant he'll fill in values for the price, the trade-in value,the down payment and the monthly lease rate. The salesperson will then negotiate the fourfactors separately, crossing out numbers and writing in new ones until the customer ishopelessly confused. The problem is, each of these factors is used to build the monthlypayment. By definition, therefore, they can't be negotiated separately from it. In theend, you think you've cut a great deal on the price and trade-in, when in fact, all you'vedone is told the dealer what monthly payment you'll put up with. Pay attention to the other numbers used in calculating the monthly payment ?- the salesperson may manipulate them to jack up the car's price."
http://finance.comcast.net/personalfinance/view.html?x=autos/leasing/burned#2
I was told if you go some where to buy a car and they pull the old four square to leave.
If it is a tool and not to try to confuse the customer, how come when I went to a reputable dealer (one recommended to me), they did not use such a tactic?
Just as you said previously, we came prepared on financing, price, etc. and negotiated. No paper to try to confuse - no discussion of monthly costs. Just what the selling price would be and then what the financing rate would be. And I choose between my outside financing and theirs - whichever had the lower rate.
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