Car Buying Secrets: Questions to Make Your Salesperson Squirm

Introduction

While these questions can be seen as car buying tips, they are more about making your car buying experience enjoyable and ensuring that the dealer knows you are not someone to be trifled with. If you are a tough negotiator, these questions will put your salesperson on edge. However, if you prefer a less confrontational approach, these questions can still be fun but may create a tense atmosphere. Either way, your salesperson will remember you as the customer who knew a bit too much about the car business.

General Questions for New or Used Car Buying

What is Your Dealership's Pack?

Most dealerships have a "pack," a value added to the cost of every vehicle to cover dealer expenses and overhead. These packs usually range from $500 to $1,200, but some can be as high as $2,000 or more. This amount is non-negotiable by law in most states and should not be confused with dealer "holdback" on new cars, which is often negotiable. For example, if a car is traded in and valued at $10,000 and the pack is $1,000, the vehicle cost is $11,000 plus make-ready, inspection, and reconditioning costs.

Is This an Old-Aged Unit?

Dealers often have a cut-off point when a vehicle is considered aged, usually at 60, 90, or 120 days. If a car is an old-aged unit, the final price will likely be closer to cost with a reduced profit margin to move it. However, there is a reason it has been on the lot for an extended period. For instance, a Chevy Tahoe at a Chevrolet lot in a big city should sell before it becomes aged, whereas a Chevy Tahoe at a Hyundai lot in a small town might be a great vehicle that didn't have the right buyers looking at it.

How Many Heads Have You Knocked Off This Month?

When a salesperson "knocks their head off," they have made a large commission selling a vehicle at $3,000 or higher over cost. These "high gross" deals put $500 or more in the salesperson's pocket. While their response is irrelevant, it is interesting to watch how they handle the question.

Do the Salespeople Here Make Spiffs or Commission on Back-End Profits?

Most of the money a salesperson makes comes from their front-end commission, calculated as a percentage of the front-end gross profit of the vehicle. Some dealerships pay a little extra if their customer finances or purchases products on the "back end" while in the finance department. If the customer finances through one of the dealership's lenders, buys a warranty, or signs up for any other paid services in finance, the salesperson may receive a small compensation for planting the seed. The best time to ask this question is if/when the salesperson asks if you plan on financing or if they recommend a warranty.

New Car Buying "Taboo" Questions

Do You Guys Negotiate Part of Your Holdback?

The answer will almost always be "no." If not, they will say "sometimes" or "rarely." Either way, it is a good method of setting the tone for negotiations. Holdback is the amount of money the dealership receives from the manufacturer when they sell a new vehicle. It is often described as "advertising" or "overhead" money but is essentially a buffer of profit that most dealerships are not willing to part with.

Do You Get a Spin for Selling This Car?

This question will let your salesperson know that you know a little too much. Many manufacturers offer "spins" to salespeople and managers for selling particular new vehicles. This is bonus money offered to encourage salespeople to sell new vehicles instead of trying to switch their customers to a higher-profit used vehicle. Depending on the vehicle and the manufacturer, spins are usually $50 or more and are paid directly from the manufacturer.

Used Car Buying Questions That Will Drive Your Salesperson Nuts

Can We Call the Previous Owner or Have Them Contact Me Before I Decide?

On a used car, this is a somewhat reasonable request. The problem is that the salesperson doesn't want to go through the trouble, and the previous owner probably doesn't want to talk to you. Still, it gets asked sometimes, and salespeople hate it. If you can talk to the previous owner, find out if there were any recurring problems, any accidents, and any reasons why you shouldn't buy the car.

Can We Get the Vehicle History Report?

If they say no, leave, because they are either lying or incompetent. Again, this is a minor hassle that can get in the way of a car deal, so salespeople usually don't like it.

Final Pain

What's Your Rock-Bottom Dollar?

Most people ask their salesperson this question at some point. Most salespeople can't answer the question without their manager. It is usually uncomfortable for newer salespeople and annoying for seasoned ones. Don't say "cash price." At most reputable dealerships, they make more money if you finance with them than if you pay cash. There is no longer an appeal to getting cash or check for a vehicle because lenders that the dealership uses pay all of the money upfront anyway, plus a little extra for using them. By saying "cash price," you're telling the dealership that they won't make money on the back end, so they need to make as much as they can on the vehicle itself.

Conclusion

Most of these questions will not help you buy a vehicle at a better price unless you are a confrontational negotiator. They may help you have a little fun buying a car, which many people classify just above "root canal" on their list of least-favorite activities. I hope this helps.

Interesting Stats

• According to a 2020 study by Edmunds, the average profit margin for new car sales is around 2.2%, while used cars have a higher margin of about 7.7%.
• A 2019 report by Cox Automotive found that 61% of car buyers feel that the car buying process is too time-consuming.
• The same report also revealed that 87% of consumers dislike at least one aspect of car shopping at dealerships, with the top complaint being the negotiation process.

By asking these questions, you can make the car buying process more transparent and less stressful for yourself.