Beware of the Four-Square rip off
by Chris
Shunk
If you
or somebody you know is looking into purchasing a new vehicle, this is a
must read.
We know new and used car salesmen can be some pretty slick dudes, but many
of us step on the lot with a great
deal of emotion and usually little preparedness. Even us car nuts may come
in knowing more than the next guy,
but a great deal of knowledge about the product you're about to buy may still
not prevent you being taken for a ride.
Some dealers use a selling system called the "Four-Square" to play psychological
warfare with your wallet.
They work this confusing system several times per day, while you purchase
a new car every few years.
Obviously, they're the wolf and you're the sheep.
The "Four-Square" is a sheet of paper with boxes for trade-in, vehicle price,
down payment, and monthly payment.
It looks very simple, but for most people, it's like solving Rubik's Cube.
The above image is an example of the Four-Square
trap before it gets too messy
The Four-Square is a way for the dealership to perform a slight of of hand
that produces them more profit by
getting you to overlook the price of your trade-in, the price of the vehicle,
or the finance terms of the deal.
You may get them to give you more for your trade-in and accept less of a
down-payment, but they'll still get you
with the price of the vehicle or the amount of interest you're paying every
month.
- Get financing from a bank
before going to the dealership: This gives you one less thing to negotiate
with the dealer.
- Most people don't have the
first clue how dealer financing really works, and a quick call to a few credit
unions will
- get you a set rate with no
funny business.
- Only haggle over price with
the dealer: The price is the bottom line. If you start arguing over price,
finance terms,
- and trade-in value, they've
got you in their Bermuda Triangle.
- Do your homework: Know the
MSRP of the vehicle before setting foot on the dealer lot. Most dealerships
now have a
- website with a listing of
their new and used vehicles, with price, level of equipment, and mileage
(if used).
- Once you find the vehicle
you like, cross-shop other dealer websites for similarly-equipped cars to
verify the price
- of the one you want.
- Let them know you know what
they're doing: Printing this post up and showing it to them will go a long
way toward
- getting a more honest deal.
- Understand that you are
not going to pay cost for the car. The amount you pay over cost will be more
than you think:
- This is pretty obvious. The
dealership is in business to make money. They will never give you the "at
cost" price,
- even if your sister is dating
the salesman's brother.
These pointers make a great list
of things to do to prepare yourself for the exciting yet potentially painful
process of
buying a new car.
Here are a couple simple and smart things we do when purchasing a new car.
- If you have a trade-in,
check eBay to see if you can get a better transaction price than you'll get
a the dealership.
- Chances are, if your car
is decent, you will. You just have to decide whether selling the vehicle
yourself is worth the
- hassle. A friend got $6,200
on eBay for a 1998 Ford E-150, and the dealer was only willing to give $4,000.
- We'd say a $2,200 balance
is enough to go through the hassle.
- Bring note paper and a calculator
to the dealership. When the dealership gives you terms, just do the math
and figure
- out if they're trying to
screw you. If the vehicle costs $10,000 and you're paying $250 per month
for 60 months,
- there's a good chance you
can do better.
- Don't go to the dealership
in a great-big hurry. If you want to buy a car and get the hell out of there
so you can watch
- WrestleMania on pay-per-view,
chances are you won't get the deal of your dreams. If you take your sweet
time and
- spend a couple hours there,
at some point the salesman will get down to brass tacks so he can move on
to the next victim.
- If you have a family, don't
bring everybody to the dealership for your big purchase. Chances are they
will distract
- you from getting the best
deal possible. They will also say stupid things like "what a great deal"
or "that's exactly what
- you wanted".
- If the salesman asks "What
are you looking for with regards to down payment and price?", don't answer
him!
- This is common sense, but
not everybody has it. Let the salesman make the offers and you tell him or
her if it's good or not.
