Bluffing is Part of Making the Car Deal

If you’ve played a few hands of poker you may know a thing or two about bluffing.  Is bluffing the same as a lie?

If you’ve read my story, Confessions of a Car Salesman, you know why I started YCBA. You know about the huge conflict of interest I felt selling cars at a dealership. I found myself not telling the whole truth and as a believer, I felt convicted in my spirit. So… I quit!

At YCBA I work for my clients and not for a dealership. Sometimes I’m tempted to not tell the whole truth to dealerships when working deals because I need to protect my clients best interest.

I’d like to share a story.

I was working a deal for my client. I contacted numerous dealerships in my client’s area to try to get him the best overall deal. We finally found the vehicle he liked best and I was in contact with that dealership. I promise my clients that I have only their best interest in mind and I do everything I can to get them the absolute most bang for their buck.

A client of mine, let’s call him… Doctor Dave… inquired on the website. After filling out the contact form he received an email that asked some discovery questions about what he was looking to accomplish. I do this first because I never want to charge someone if they have unrealistic expectations.

Doctor Dave’s answers to the discovery questions let me know he probably had some of those common unrealistic expectations. He thought his BMW was worth more than it really was and he thought he could get a SUV for less than what I knew they cost, especially with all of the options he required.

He had found a SUV that he liked at a dealership that fell in his budget but he didn’t know that the vehicle had been in an accident and he had no idea what they would give him for his trade in.

I called him back and explained that while I am skilled at what I do, I am unfortunately, not a miracle worker. The market sets the prices on vehicles and I could not in good faith take his payment if he was expecting a miracle.

I told him what I thought the value of his BMW was based off the information he knew about his car and about what I thought a SUV would cost based off the features and mileage of the vehicles he was considering. I also told him about the accident on the vehicle he was considering.

I offered to help him but I didn’t want him to have unrealistic expectations. If he wanted me to advocate for him, then he would have to trust me.

I’m including a snap shot of the end of our text conversation because this is a true story, but of course I would never disclose a client’s personal information. So here goes our convo…
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Truth be told, his expectation was still a little off in my opinion but after talking to him again he said he trusted me and wanted me to help. You see, before I work with anyone, I need their trust.

True, I have knowledge the average consumer doesn’t, but I cannot make someone pay more for your trade than what they are willing to pay. I cannot make a dealership sell you a vehicle for any less than they are willing to sell it for.

If you are looking for a miracle, I am not your guy. I can’t get you a Porsche for the price of a Chevy. If you are looking for a great deal without the hassle and haggle, then we should talk.

In the interest of making a great deal, I talk about a lie I told a dealership in a second. Stick with me here.

I start by researching the actual value of Doctor Dave’s trade in. Inputting the VIN on KBB, I received this response:
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$20,574 – A super low offer.

I knew his vehicle’s value was worth way more than that but I also knew this would trigger phone calls and emails from interested dealerships.
I fielded some calls and everyone was telling me between $20-22k for the value.

I had an idea. I knew that this vehicle would be worth more to a BMW dealership. Think about it. If you are looking for a BMW, where would you look? A BMW dealership.
Not only that, but this vehicle could be certified by a BMW store. Certified cars always cost a little more so I thought they might want to buy it even if Doctor Dave didn’t want their car.

I called the manager and said I was looking to buy a vehicle from one of their previous clients. Not a true statement. I told them that their client asked me to call them to get an original window sticker. The manager quickly sent me a print out of the exact vehicle my client owned. Just as I expected, this car was loaded.

So what did I lie about? I had no idea where my client bought this car and I wasn’t trying to buy the car. I just wanted the original window sticker and I didn’t think I would get him to do the work unless he thought he might have an upset client if he didn’t help me.
An original window sticker will show all the features of the car. I knew that all the bids I had so far were not factoring in the doctor’s exact vehicle. I needed to show them that this car is the top of the line. $22,000 was a crazy low offer. I would never let him trade in for that number.

About a half hour later, I called the same BMW dealership and spoke to the same guy. I divulged the truth, that I wasn’t really trying to buy this vehicle from his client but that I was helping him buy a new SUV and wanted the build sheet to send dealers. I asked him if he would be willing to buy this vehicle even if we didn’t buy a vehicle from him.

He was glad I called him because he really wanted the car. Depending on the condition of the tires, he would give me between $23,500-$24,000. With this information, I then knew what we should expect as the actual trade in value.
We would not accept less than $24,000.

When I text with a wholesale dealer interested in the car, he thought $24,000 was crazy.
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Now I knew the vehicle’s value and I knew the BMW dealership really wanted to buy it, regardless.
I then talked to Doctor Dave and he tells me he had decided on the vehicle he wanted— and not the one that had been in an accident.  I sent him to look at a couple vehicles that I thought fit in his budget.
There were two vehicles in a 100 mile radius of him that met his needs. So I called both dealerships and got them to send me a proposal. I also was very clear that I wanted to know all the imperfections in the vehicle so there were no surprises when the doctor came to pick the car up.
Both dealerships sent me pictures of all the imperfections and proposals for the vehicle. Here is a proposal from one of these dealerships. Keep in mind that I have already negotiated more for the trade in number and $22,000 was the most they were willing to give.
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So now I knew the bottom line. You can see that this dealership would be writing my client a check for $4,911.25.

Not really though…. because he owes $2,4700 on his BMW. It would take a check for $19,789 to buy this vehicle.
You might be thinking….Why not sell the car to BMW and net the client another $2,000? If you look closely at the proposal you will see that there is no sales tax.

Here is the proposal if he does not trade.
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Can you tell the difference? If he doesn’t trade he is losing a $1,032.37 tax credit. This means he would only net $967.73 by selling to BMW.

Not bad, but my work is not over yet.

If BMW really wanted his trade in, then maybe we could find a vehicle in their inventory. I also thought maybe they would give him more than $24,000. So I asked my client to take his car to the BMW dealership so we could get an exact number for it.
I provided the dealership all the needed information to do an appraisal and had a vehicle prepared for Doctor Dave to look at while he was there.
He was a little hesitant because the vehicle I told him to look at was $6,000 dollars more than the other we had quotes on. But it only had 20,000 miles instead of 40,000 miles and it was loaded with more options like leather seats, moonroof, navigation, blind spot monitoring, just to name a few.

While there, Doctor Dave text me:
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Screen Shot 2018-07-28 at 12.43.18 PMSo he liked this vehicle. I thought he would. This vehicle had most of the same features his BMW had. The question now is how good of a negotiator I am.
Here is the first proposal the guy sent me and my response through text.

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After reviewing, I told the dealer that he is almost $6,000 more.
As you can see, this vehicle even though its selling price is $5,700 more, the actual difference is only $4,385.25. Look again at the proposal if you are confused. The first proposal would give my client $4,911 cash back and the second proposal would only net my client $526. That’s only a $4,385 difference.
I know at this point I need to talk to Doctor Dave.
After doing research I realize two things. The first thing is that I think the vehicle he liked is over priced. I asked the Doc if he’d be willing to spend $4,385.25 more for it.
He agreed that he would. He told me to see what I could do.
I then verified Doctor Dave’s payoff amount on the BMW, $24,700. If he wanted to pay cash, he would have to write a check for $24,174. In the proposal, they were giving him a check for $526 assuming no payoff on the BMW.

$24,700 – $526 = $24,174
If this is confusing, you’re not alone. It took me a good amount of time to explain this to the doctor. And he is a DOCTOR! He is a super smart guy and even he was confused.
Remember, I confirmed with him that he was willing to pay $4,385 more for the vehicle because it had 20,000 less miles and way more equipment than the other. I could have made a deal at that number with the BMW dealership. Doctor Dave was happy and my work would have been done. I already got him $1,500 more for his trade and found him a vehicle he liked better than the previous.
But I wasn’t done yet advocating for Doctor Dave.
It was the end of the day, so I knew the dealership was about to close. I knew that the vehicle would not be sold that night.  I called the manager  and told him that the doctor was going to be making a decision that night and pick up the car the next morning at 11AM.
It was between his dealership and another one. I told him why we thought the trade in was worth more than they offered. I provided him with the research I had done and made him an offer of $21,000 out the door.
I knew that would have been an awesome deal and I was expecting him to meet somewhere in the middle. He gave me the usual, “We aren’t making any money at that number” so I continued to refer to all the research I had done and why we think $21,000 is fair. In the end, he agreed that $22,000 was the best he would do.
At the end of our conversation I told him that I think my client was probably going to go with the other vehicle at the other dealership but I would let him know in the morning.

While I know my client wasn’t considering any other car at that point and while I could have made a deal right there and then, I knew there was still more skin in the game. When I tell my clients I advocate on their behalf, I mean it. It’s a bit like poker. I never show my cards and bluffing is a part of the game.

My client was buying this car and I was going to try my best to get him the best price. That’s what I promise my clients. My loyalty lies with my client.

In the final proposal the dealer offers a $100 dollar broker fee. I never told him I was a broker.

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He realized I knew too much. I am NOT a broker. Brokers are usually paid based off the sale price of the vehicle by the dealership. They often will work with the dealership that pays them the most. My loyalty lies with my clients. My service is unique.

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$21,899 is a good deal. Notice $25,977 for the trade in?

Everyone else was telling me $22,000.
I called the finance manager again in the morning and told him we were willing to do $21,500 but if not Doctor Dave is headed with a check over to the other dealership.

He agreed to do it for $21,500.

After all was said and done, Doctor Dave threw me an extra hundred dollar tip for the service I provided. That’s the exact amount the dealer wanted to pay me. But I would never jeopardize the integrity of my business to make a quick buck.

You see there is a lot of work that goes into making these deals. Not all are the same. I wonder what you think about this story.

Did I do the right thing by bluffing?

Can you tell the difference in the quotes?

How much more did my client pay for this vehicle compared to the Tucson?

What if my client bought the Tucson and sold his BMW to the BMW store?

It was super tough to explain to my client. One of the reasons is because I had them figure the numbers without the balance owed on the BMW.
I like to negotiate the deal one thing at a time. In my opinion, that’s the best way to do it. It’s also the most difficult and timely way to do it.  Negotiate the sale price down then negotiate the best number for the trade, and then financing. It’s the best way to do it though.

Here is how I got to what I thought was the best deal. The high end value of his trade was $24,000 in my opinion. The best deal online for a similar vehicle to the one he was buying with miles and features was $19,999. So I figured if we could get a difference of -4,000 we would be getting a great all around deal. $19,999 – $24,000 = -4001
Other things to consider when comparing deals. Notice the difference in dealer fees. One dealer was charging $599 and the dealer we chose was charging $899. Typically, these are fees the dealer doesn’t negotiate but that doesn’t mean you shouldn’t consider that in your decision making.
Most dealerships do not show these fees online. If you are looking at two vehicles priced $500 apart, do not assume the lower priced one is the best deal.
This is one of the reasons why I say the internet is useless when shopping for a car. You have to contact the dealership. The sale price is only one small part of the overall deal. Always consider dealer fees, financing and trade in values to get the overall best deal.

If you made it this far, shoot me a comment or send me a message. I’d be happy to answer your questions or talk more about the hassle and haggle associated with making deals.

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