If you’ve ever been to a car dealership, you know you won’t leave without being pitched a few offers. Like any business, car dealerships use proven methods to close more sales. It’s important to be aware of this when you go to the dealership to ensure you stick to your budget.
We’ve compiled a list of sales tactics dealerships use to sell you their cars, from limited-time offers to trade-in deals.
1. Limited-Time Offer
Imagine falling in love with a vehicle because of its unique color, pricing, or high-tech features. Then, you’re told by a salesperson that it’s available today. Either you’re lucky or a salesperson is using a limited-time offer to pressure you to buy.
Limited-time offers are effective because they activate a fear of missing out or paying more. Sometimes, limited-time offers are truly limited, but be wary if you discover all the cars you’re interested in have a limited-time offer.
2. Free Test Drives
The next time a salesperson at a dealership offers you a free test drive, think twice. Salespeople use this tactic to make you more invested in a car. The goal is to lure you into potentially impulse buying it after getting a feel for it. Free test drives are only free if you don’t end up purchasing the vehicle. You should only accept them if you’re ready to put down the money or have strong impulse control.
3. Trade-in Deals
Odds are most dealerships will offer you the least enticing trade-in offer. This is for several reasons, but it’s mostly for profit. If a trade-in offer seems valid, ensure the numbers make sense. For example, if you’re offered $5,000 for your vehicle that you can sell for $10,000 privately, consider holding off on signing the deal.
4. Financing Options
A common question you may hear at car dealerships is, “What monthly price do you want to pay?” If only this magically reduced the overall price, but the reality is that it doesn’t. Don’t be fooled into making a purchase even if you’re offered the perfect monthly price.
Crunch the numbers, do your research, and ensure the overall price is fair and within your budget. When you’re asked for your preferred monthly price, the salesperson is using a sales tactic.
5. Loyalty Discounts
If you work with the right dealership, loyalty discounts can make sense. Dealerships often crunch the numbers several times, and by the time they price their vehicles, they’ve already factored in all their expenses. Be wary of loyalty discounts if you’ve never shopped with them.
Unless you’ve done your research beforehand and are being offered a good deal, any random promotions may be a tactic the dealership is using to push difficult cars off their lot. However, loyalty discounts help dealerships sell more cars and keep their customers happy when done right.
6. Referral Programs
Referrals can be a win-win for both the dealership and the customer. Naturally, if you’ve had a great experience with a dealership, you’ll refer your family and friends. Still, some dealerships take a proactive approach and offer incentives to refer family and friends. If they offer you cash for each referral, be sure to know their terms and conditions. Otherwise, you may find yourself receiving cash bonuses to be used exclusively on future car purchases.
7. Bundled Packages
Dealerships often offer bundled packages like free oil changes, car washes, and warranties. If you’re offered these incentives, rest assured a salesperson is trying to close a sale. It can benefit you, but be sure to ask for written confirmation. During the sale, a salesperson will make many promises that might be forgotten in the future. If bundled packages are genuine, dealerships won’t have a problem including them somewhere in the contract.
8. Seasonal Promotions
While buying cars at certain times of the year may offer you more discounts, the best time to purchase a car is when you’re financially ready. Still, dealerships know that offering discounts, often for a limited time, will increase their sales. Like Black Friday, seasonal promotions are a great tactic dealerships use to sell their inventory.
9. Low Interest Rates
A lower interest rate can save you a few hundred or thousand dollars over time. Dealerships will offer loans directly or partner with local banks. If it’s within their ability and they want to close a sale, dealerships will offer you a lower discount. This assumes you have great credit and a low amount of debt.
If you’re financially stable and presented with a good deal, it may be worth making the deal as soon as possible. Often, dealerships will only guarantee a lower rate for a day or so, making it hard for you to walk away.
11. Pre-order Benefits
If you’re great at budgeting, pre-ordering a car may work out well for you. Dealerships win because they sell cars before they hit the lot, and you get a nice discount. Similar to seasonal discounts, pre-order discounts are another effective strategy for dealerships to sell more cars. Pre-ordering a vehicle may benefit you if you’re looking for a custom color, specialized wheels, or additional features that are hard to find.
12. Exclusive Memberships
Dealerships may offer exclusive perks if you lease a car for your business or shop frequently for cars. Think of your local Costco, which has two membership cards. One offers more incentives but has a higher cost. However, if you shop enough, you can offset your costs and save money.