{"id":182799,"date":"2017-07-02T14:00:06","date_gmt":"2017-07-02T12:00:06","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=182799"},"modified":"2017-06-30T17:13:30","modified_gmt":"2017-06-30T15:13:30","slug":"dont-fall-for-this-trick-when-buying-your-next-car","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/motoring\/182799\/dont-fall-for-this-trick-when-buying-your-next-car\/","title":{"rendered":"Don’t fall for this trick when buying your next car"},"content":{"rendered":"

Cape Town startup<\/span> GetWorth warns against a common technique in car sales called the Four Square Worksheet, a psychological tool a salesperson can use to distract a buyer from the overall cost of a deal.<\/p>\n

GetWorth director Jamie Surkont stresses that there far more to buying a car than just its price. \u201cThink of a large square, divided into four smaller squares. One is your new car price, one is your current car\u2019s trade-in value, one is your finance deposit and one is your monthly payment.\u201d<\/p>\n

The new car price usually starts at the list price whilst the salesperson extracts the other information on what the buyer would like to achieve in each of the remaining three squares. Based on this information, they will then present a draft deal.<\/p>\n

\u201cNormally the monthly payment and deposit are too high or the trade-in price is too low or the discount on the new car is too small. You reject that first offer, and the negotiations begin,\u201d Surkont said.<\/p>\n

Based on the reaction, the salesperson can determine where the focus is placed. If one is hell-bent on getting the cheapest price on the new car, the salesperson can offset this against a lower price on the trade-in.<\/p>\n

\u201cIf you are only interested in what your monthly repayment is, he can still squeeze lots of high-margin extras into the deal, like warranties or smash and grab. Or if you need to clear a certain amount on your trade-in because of a high finance settlement, then the new car price can be loaded,\u201d Surkont said.<\/p>\n

\u201cAnd amazingly, you can still get low monthly payments by playing with balloon payments and other financial engineering. It\u2019s a psychological tool, designed to confuse and prevent you from seeing the whole deal clearly,\u201d he added.<\/p>\n

The salesperson has a lot of flexibility to move things between squares, while the consumer finds the mix bewildering and focuses on a single key consideration like the new car price or the monthly repayment.<\/p>\n

\u201cSo you end up with a deal where you seemed to achieve your objectives, but you have a niggling feeling that you got taken,\u201d Surkont said.<\/p>\n

The Four Square Worksheet is a crude tool and many dealers won\u2019t use it. However, even where a salesman doesn\u2019t explicitly use the worksheet, the same techniques and psychological principles apply, GetWorth warned.<\/p>\n

\u201cRemember that a dealer can make money on all parts of the deal, they get margin on the new car, they can profit on the trade-in, they get mark-ups or commissions on the extras and they get incentives on raising finance,\u201d Surkont said.<\/p>\n

To level the playing fields, Surkont recommends that one separates the issues and insists on playing only one square at a time.<\/p>\n

\u201cAsk for the best cash price for your new car. If you want any extras, like extended warranties, define these upfront, to be included in the cash price. Don\u2019t get sucked into trade-in or finance discussion before you have a cash price.\u201d<\/p>\n

\u201cDo some research on your trade-in and get some cash offers before looking at a new car. These might be lower than what you wanted to hear, but a cash offer is a reflection of the real market. If you get an inflated trade-in, you will end up paying for it somewhere else in the deal,\u201d he said.<\/p>\n

Surkont pointed out that dealers get incentive on raising finance. “You might want to also ask your own bank for terms before you go in, so that you have an alternative, or something to compare with,\u201d he advised.<\/p>\n

\u201cBefore closing the deal, make sure that nothing extra has crept in, apart from items you explicitly negotiated. It is not uncommon to see things change on the complicated financial documents, so this is important. Read the offer-to-purchase and finance terms carefully,\u201d he said.<\/p>\n

He says by following these simple steps, it will put you ahead of 90% of car salespeople. \u201cThey will realise that you are a more sophisticated buyer and is more likely to be frank with you. You are less likely to get confused and have a clear idea of the actual prices, which will make a real impact to your wealth in the long term.\u201d<\/p>\n

 <\/p>\n

\n

Read: The cost of owning a car over your lifetime<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

GetWorth warns against a common technique in car sales called the Four Square Worksheet, a psychological tool a salesperson can use to distract a buyer from the overall cost of a deal.<\/p>\n","protected":false},"author":10,"featured_media":142049,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11119],"tags":[12017,26],"class_list":["post-182799","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-motoring","tag-getworth","tag-headline"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/182799","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=182799"}],"version-history":[{"count":2,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/182799\/revisions"}],"predecessor-version":[{"id":182963,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/182799\/revisions\/182963"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/142049"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=182799"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=182799"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=182799"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}