How to get the Best Deal on a Car

Car dealers refer to the profits when they sell a car as "profits on the front end or on back end". Front end profits refer to the money that is made when they sell you the car. You know, the price they tell you that "were not making any money on this sale". These front end profits are the selling price minus dealers costs.

                    35% of the Car Dealer's Profit Comes from Financing Your Car!

The back-end profit is the money they make when they finance the car. If you'll notice, somewhere in the conversation with your car salesman you will be asked how you intend to pay for the car. This tells the salesman how much wiggle room he has to work with.

If the salesman knows that you will be financing with the dealership he knows profit will be made in the finance office and this gives him more leeway to bargain on the front end price.

Think about this, the dealer isn't going to sell the car without making a profit, much less for a loss. If you negotiate the front end of the car too much you will be presented with higher rates in the finance office.

Even if you have excellent credit the dealership will have to offer you a much higher rate than you can qualify for at the bank just  to compensate for the loss on the front end of the car.

                       So, what's the best way to get a great deal when buying a car?

Well, to get your best deal you need to get your financing lined up before you visit the dealership. This way you are free to wheel and deal with the salesman on the front end price and know you will be getting a great deal on the financing.

This may involve you having to tell a little white lie, but when in Rome. When the salesman asks you "how you intend to pay for the car", I suggest that you use this line, "don't you guys offer financing"? I'm sure you will get a positive response and the salesman will get the green light from his manager to go a little lower on the price.

If you think about it, you really didn't even lie, you only asked the salesman if they offered financing, the assumption that you were using them was his. Make sure you don't let on that you know what rates are, or that you already have your financing lined up, let them think you are going to be a push-over when it comes to financing.

Once you are certain you have your best price let him escort you into the finance office to conclude the deal. Sit back and let the finance manager work up his best deal. His first offer will be much higher than the loan you have in your pocket because he is trying to make up for lost profit on the front end.

Don't show your hand yet, negotiate with him as you did with the salesman. Once you reach an impasse you can let them know you will be using your own financing. At this point the dealer has two choices, back out of the sigbed price agreement or sell you the car for a steal. If they back out, bark up the management chain, they'll cave in.