The sales person will try and move through this section quickly.  They don’t want you to focus on the price of the new vehicle.  They want you to focus on the monthly payment which are covered on the bottom half of the Four Square form.

This section is where it is extremely important to have researched new vehicle pricing at one of the Internet Financing sites. See Pricing Your New Vehicle.  From your research you will already know what the MSRP and dealers invoice price are for the vehicle.

Buyer Tip: If the buyer brings in the vehicle pricing information, see Pricing Your New Vehicle, in their Buyer Information Folder or has pre-negotiated the pricing with the Dealership’s Internet manager most of the following negotiation can be eliminated.

Dealership Trick: The Sales Price of the New Vehicle drives the amount of the monthly payment.  If the buyer is not careful they will have the buyer’s monthly payment, which is negotiated in the lower right section of the form, driving the price the buyer pays for the new vehicle. If the buyer questions the sales price the salesperson will tell the buyer they will get back to this section after the other sections are completed. Somehow they never do.

Buyer Tip: Buying a vehicle is not one transaction … it is four transactions.  Treat each transaction separately.  Be careful when the sales person tries to lump the three transactions located on the Four Square form together i.e. new vehicle, trade-in and financing by focusing on the monthly payment.

Dealership Trick:  The sales person will sometimes write down a higher amount than shown on the sticker on the vehicle.  If successful the sales person will have you begin the negotiation from a higher price.

Buyer Tip: Always write down the sticker price of the vehicle before you go into the dealership.

Dealership Trick: The sales person will write the price of the vehicle as shown on the price sticker on the lot.  This will be the total of Manufacturers Suggested Retail Price (MSRP) and the additional dealer markup.  The MSRP is the same nation wide.  The additional dealer markup is suppose to show the additional cost of doing business in the local location. The additional dealer markup is also called the “pack”.  In reality it gives the dealership a higher point from which to start the price negotiations.

Depending on the generally accepted business practices of the local area some dealers may not add an additional dealer markup to the price of the vehicle.

Buyer Tip: When negotiating the price of a new vehicle the potential buyer should start with a price based on the Dealer Invoice Price, before manufacturer rebates, not the MSRP or Dealer Lot Price.

Dealership Trick:  The sales person will sometimes, during the price negotiations process, deduct the manufacturer’s rebate from the price of the new vehicle making it look like they are lowering the price when in fact they are just giving you the manufacturer’s rebate. 

Buyer Tip: Don’t let the dealership roll the manufacturer’s rebate into the purchase price of the new vehicle when negotiation the price of the new vehicle.  Have the sales person list the manufacturer’s rebate separately on the Four Square under the Down Payment section. 

Dealership Trick: The sales person might write in this section “As Equipped” if you are not asking the dealership to add additional accessories to the vehicle. This is usually nothing more than a distraction technique to distract you from the price they have listed on the form. If you are adding accessories they will be listed in this section and added to the above price.

The sales person will sometimes add “+ XX% for Tax and Fees” to this section of the form  to make you aware the total out the door price will include the agreed price of the vehicle plus the state mandated sales tax and fees.  The sales tax is based on the value of the vehicle and will vary proportionally with the agreed price of the vehicle.  The fees are for the most part fixed but may vary by vehicle e.g. gas guzzler tax.

Dealership Trick: The salesperson will show the additional tax and fees as an odd numeric number rather than as a percent and add it to the price of the vehicle showing the total out the door price.  They write the number as an odd numeric so you have a hard time calculating the percent they are using. They may also inflate the tax and fee estimate by $500 to $1500.  If you don’t catch this they will have you negotiating from the higher total out the door price which include inflated tax and fee estimates.  You will also be negotiating the price as the T&F remains as a fixed number as the price of the vehicle is negotiated downward.  A double whammy.

Example:

*The “real” estimate will vary by state and county based their actual tax and fee rates. 

If you say as an example you are not going to pay the additional Dealer Markup of $4,988 they may drop the Total price to $20,384 ($22,633-$4,988+$2,739).  The inflated estimate is still in the total price as a fixed amount.  The percent is now 16%, $2739, verse a “real” estimate of 10%, $1765.  In this example you are now paying $974 over MSRP when you are thinking you are paying MSRP plus T&F, $17,645 + $1,765 = $19,410.

Buyer Tip: Always negotiate the price of the vehicle before the estimated T&F knowing the actual state mandated T&F will be added to your final negotiated price.

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