The Dealer Four Square Technique

New car dealers use various techniques to try to secure a sale with the most possible profit. One of the most popular techniques is called the four square. The four square worksheet helps the salesperson view the total profit to the dealership as well as the separate elements of the deal. The sheet is divided into four squares:

• Trade-in price: The amount that the dealership will credit you for your trade-in vehicle. This figure is credited toward your purchase of a new vehicle. Consider selling your old car rather than trading it in, you may get more money by selling it yourself.
• New car price: This is the price of the new car that you want. Often a dealer will write the price of the car in large print, then write "plus fees," in small print, indicating that, on top of the cost of the car, you will pay sales tax and other fees.
• Down payment: Here they enter the maximum amount that you are willing to put down. The will try to coax the highest amount possible.
• Monthly payments: Here they enter the maximum amount that you are willing to pay per month.

The salesperson will then try to manipulate the numbers to get the most profit while making the customer feel that they are getting a deal. For example, if the customer is only willing to pay a small down payment, then they will write down a lower down payment and an inflated monthly payment.

Decide what your maximum down payment and monthly payment should be before going to the dealership. Don't tell the salesperson the maximum amounts you are willing to pay, tell them the amounts that you actually want to pay. Write all these figures down and stick to them.

How to Sell Your Used Car

Are you ready to sell your old car or trade it in for a new one? Here is what I would do if I was going to sell my car:

       

Find out the http://www.kbb.com/ value of your car and compare that to the current condition of your car and the options that it has. You can also look at classified ads for the same model to see what other people are selling it for. Decide what your asking price will be and the lowest price you are willing to sell it for. If you're planning to buy a new car, it is easier to get rid of your old car by trading it in, although you might not get as much money for it. If your not getting another vehicle, you could still sell your used car to a dealership, or to Carmax, if you want to get rid of it fast and don't mind getting a little less. Find out what your state's requirements are for documents, such as title transfer, smog certification and odometer reading statement. Gather those documents as well as your maintenance and repair records. In many states, both the seller and the buyer have responsibilities during and after the transfer of a vehicle. Get your car ready for selling by giving it a thorough cleaning inside and out. Make it look and smell as nice as possible. There are many options for advertising. The first thing you should do is to put a for sale sign on the car that includes your phone number. Take some good quality photos of your car. Place ads online and in local newspapers. Get the word out to friends, family and co-workers that you are selling your car.

Is That New Car a Mouse-Click Away?

We've all done it before - walked into a car dealership and been beset upon by a salesman who'd rather chew his own foot off than lose a sale.

But a developer in Dayton, Ohio is working on an alternative process to the car-buying game.

According to a story in the Dallas Morning News, Brian Hoecht, president of the Ohio-based Ai-Dealer, has gone all out to develop an on-line system where consumers can do everything from pick out the new vehicle they want, equip it with the desired accessories, arrange financing and have it delivered to their driveways ... all from the comfort of their home.

Hoecht notes that the process definitely won’t eradicate car dealers, but claims that up to a third of the sales force could be replaced as their on-line buying tool becomes more refined.

The question is: how many of us would actually be comfortable purchasing something as significant as a car online? Obviously, this is a little different than ordering that pair of hiking boots off of the web.

Consumers however, obviously feel that they retain a little more power over purchase through the online shopping experience. Ultimately, they are in control of the sales process and how far they want to delve into it. And who doesn't want to be in control?

One segment of consumers is unaffected by tough economic times

I was passing a local Hummer dealership the other day and couldn't help noticing that there wasn't that many vehicles on the lot. So, I stopped in and asked a salesman "how's business?" "OK," he said. "Could be better, but it's pretty good."

I've got to admit I had my doubts. But soon after, I ran across a story from Connecticut that talked about (ready?) how luxury vehicles were leasing or selling pretty decently in the face of such rough times for large vehicle sales.

The fact of the matter is despite these tough economic times, there are still consumers who have the means to buy whatever they want. They aren't bound by financial constraints like the majority of car buyers are and they're marching to the beat of their own economically sound drums.

That segment of the populous is also probably convinced the gas crisis and the economy will eventually turn around, so they're not panicking like so many others are. The difference is they're well-heeled enough to afford to hang on in the face of changing times.

Saturn Updates Their Image: Is it Working?

In the last year, Saturn has made a large amount of changes in their lineup in an effort to grab more of the market share and leave their small town image behind. Saturn has discontinued 3 models and rolled out new models like the Astra and the Outlook along with their "Rethink" ad campaign. These steps signal GM's attempt to revamp the Saturn brand.

And for the most part the critical response does seem to be improving, but whether it will result in significant increased sales is yet to be seen. The Saturn Aura was voted North American car of the year in '06. But in spite of positive critical response for many of the new models, sales have increased only slightly. One marketing hardship is that there have been so many recent changes to Saturn's lineup that customers are unfamiliar with the new models.

Also, in the past 2 years Saturn's average price is up about $7,000. And while customer satisfaction has always been strong, JD Powers ratings for initial quality and long-term dependability have lagged behind. Check out this article in BusinessWeek to read more about Saturn's marketing.

Small Car Sales Boom: "Small is the new big"

Despite a recent survey conducted on BuyingAdvice that indicated that the majority of buyers are not downsizing their vehicles, USA Today reports that small car sales are on the rise in a big way this year.

The smallest, lowest-priced segment has reported that sales are up almost 27% compared to last year. Models that are enjoying being at the front of the pack in regards to this new buying trend are the Toyota Yaris and Honda Fit, which are up 70% and 61% respectively. As the head of Dodge. Mike Accavitti points out; small really is "the new big".

Small cars have come a long way in terms of design and performance in the last few years. But, for those who fear that they will have to give up gratifying performance just to save at the gas station, U.S. News & World Report has just released a list of vehicles that provide the most "thrills per gallon". So for those who still need some performance kick, check out recommendations like the Honda Civic Hybrid or the Ford Escape Hybrid-or the rest of their list.

This is Not Temporary: Cars as We Know Them are Changing Forever

It's not a monumental, one-time event so big that it sticks in your mind forever like the U.S. beating the Russians in hockey or the day a human set foot on the moon.

But what we're all witnessing today, and have been seeing for the last few years, is sure to go down in world history as just such historic events. The changing of the auto industry forever.

It seems like light-years ago, when the rumblings about a need for more fuel-efficient cars first took front and center stage. And it seems equally long ago that "The Big 3" (Ford, Chrysler and GM) were all smiles as they introduced marketing campaigns touting the return of the muscle car.

Fast forward to today. The "Big 3" are but a trio of equally or more ambitious automakers worldwide, gas prices are sky-high, car buyer's stress levels are even higher and the color of the hour is Green-as in Hybrid Technology.

If you haven't figured it out by now, what the world is going through is not a phase. Repeat: Fuel efficient cars and equally smart thinking by car buyers are here to stay.

And, as detailed in this recent MSNBC article, the world it is a-changing... . Muscle cars may soon be extinct.

Is GM letting American Axle do its dirty work?

Is General Motors using the strike at American Axle and Manufacturing Company to purposely stop the glut of trucks being delivered to its dealerships nationwide?

American Axle makes axles for all GM's pickups and large sport utility vehicles. Two years ago AAM's sales totaled $3.19 billion, and it was one of the most profitable years in company history. But according to Workers Independent News, the company is now demanding workers take a pay cut from $23.84 an hour to $14.

Usually, when supplier strikes force automakers to close plants, like the seven facilities GM has idled since the walkout began Feb. 27, those same automakers get deeply involved in negotiations to get talks rolling. But, GM seems to be content to let AAM and its workers handle things.

According to analysts at CNN, GM has a 150-day supply of pickups. And on March 1, four days after strike started, GM announced it was cutting back production beginning in the second quarter to offset sagging sales.

Much of the company's revitalization is riding on success of its new line of SUV's and pickups. And while it does look as if the Chevrolet Tahoe is selling much better than anticipated, the company will have to find other ways to cut back; so those positive gains aren't cancelled out by slow sales in other areas.

What better way to do it than allow American Axle to do its dirty work for it?

Believe It or Not: NADA says there are 100,000 jobs to fill at dealerships

If you believe what the National Automobile Dealers Association says, the time to buy a new car might be fast approaching. Why?

Well, the organization that was founded in 1917 and which represents more than 19,700 domestic and international new car and truck dealers, claims there'll be more than 100,000 jobs to fill at dealerships nationwide very soon.

In a recent NADA Press Release, kicking off "Automotive Career Month," Chairman Annette Sykora says: "We are encouraging students to schedule a visit to their hometown dealership and ask about internships or summer jobs, which can often lead to a full-time career a few years down the road."

But wait! Aren't automotive sales down in this slumping economy? And isn't the long-term outlook for new car sales just as gloomy, especially with Ford Motor Company recently making a highly controversial offer to buy back 81 dealerships? Get more details on Ford's offer at MarketWatch.

Well, apparently NADA sees better times on the near horizon, which could translate to some great deals for car buyers, especially if, as they claim, there'll be 100,000 jobs available at dealerships very soon. Think of it as 100,000 new dealership representatives fighting for your business.

Dealerships Specializing in Electric Vehicles

There is a new type of dealership springing up to serve a new breed of customer-electric vehicle dealerships. There are already a number of electric cars out on the market from companies like Zap and Myers Motors. And as our environmental consciousness rises, there are more dealerships springing up to sell electric cars which can range in price from about 11K to 99K.

And although many of these new dealerships are highly concentrated on the west coast, electric vehicles are no longer something that only eccentric hippies are interested in. One dealership manager Darlene Kelly mentions that most of her customers have families, while Tesla VP Siry refers to his customers as "very intelligent people with an engineering orientation".

Perhaps as early as April, Tesla plans to open their first dealership in Hollywood to coincide with the release of their much anticipated electric roadster. Although the buyer segment is increasing for E.V's, there are still limitations in the technology and the volume of E.V.'s being sold. So dealerships like Ecomotion in Portland, OR also sell used hybrids like the Toyota Prius to keep sales up.

To read more about some of the electric vehicle dealerships out there, check out this article in the New York Times.