Greetings!

I'm The Car Guy.

I call myself that because I know cars.

Selling cars, that is.

Now if you have read my profile, and understand that this hub and all that follow are an exposé on the car business, then you know why I have to conceal my identity. Hey, I know salesmen who have had their tires flattened after arguing about a sale involving a $200 commission. Imagine what they would try to do to me if they knew I had cost them thousands.

Before we get to the heart of the matter, let me say this:

Almost every person I have ever talked to about their car buying experience has said the same thing: no matter how smoothly things went at the dealership, they still felt as though they paid too much; they all had the uneasy feeling in the pit of their stomach that the somehow got screwed.

Well, they were right; all of them.

So if you want to avoid being screwed when you buy your next car, then you need as much pertinent information at your disposal as is humanly possible.

And so, together, we will rip the cover off the industry and expose every little trick that car salesmen use to get more of your hard earned money.

This will take some time, for there is much to learn. In fact, I probably will have to write ten or twelve different hubs before we cover all the bases. But the information is essential.

Be patient and you will reap the benefits. When I am finished telling you what I know, you will be able to take a vacation with the money you did not give to a car salesman.

The basics:

For the purposes of this and succeeding hubs, there are only two kinds of vehicle: new and used. Each has its own dynamic, which is explained as follows:

Generally, you can find out how much a dealer paid for a new vehicle. As a result, they may usually be purchased for invoice or below.

The manufacturer also offers incentives to the dealer for meeting or exceeding its monthly goal. This means that a dealer may choose to cut their price even more if the vehicle you are buying is the one that puts them at their goal, or beyond.

Used cars are a whole different story. Generally, dealers make thousands of dollars on each used car they sell. This is because you do not know how much the dealer paid for the car you are buying. This gives the dealer the ability to charge way more than they paid.

The gross profit a dealer makes on the sale of a vehicle is called "front end" money. It is from this amount that the salesman is paid, usually between 20% and 30%, depending on the pay plan. Car salesmen always make less when they sell a new car. This is why salesmen steer undecided customers to the used car lot.

Both new and used vehicles offer the dealer a significant profit potential on what they call "back end" money. This is the profit made on financing, insurance, warranties and other add-ons.

The car salesman is paid on front end gross profit. The business manager of "F&I" (Finance and Insurance) manager is paid on the back end gross.

Okay, then. We have the basics down pat. Let's get to it.

The game:

Make no mistake; the car business is a game. It is a game played by two teams, you and the salesman - who always has home field advantage, by the way. There are no definitive rules to the game; there are only guidelines. It is a game you play every four or five years. It is a game the car salesman plays four or five times every day.

They are the experts, you are not.

And, hey, I ought to know. I sold cars for a long time. I sat across from customers just like you and made you pay two, three or four thousand dollars too much for a car.

Believe me; I know the game inside and out. I know how to get as much of your money as possible. And if you don't think selling cars is a game, and if you don't think you always pay too much for the car you buy, well, listen up!

The car business is many things. The terms tricky, sneaky, mysterious and enigmatic come immediately to mind. It is, therefore, the most maligned industry in America.

The maligning of the business in general (which is richly deserved, by the way) is largely the fault of those who run the show.

When you conceal the secrets of your business from the customers, purposely mislead them, afford them respect only if they demonstrate negotiating ability, outright lie to them, charge them as much as you can get away with, sell them things they don't need, victimize them when they finance with you, well, you should be maligned.

You see, the system (or process) used by every single car dealership in the world is the same. It is designed to do one thing and one thing only ... to get as much of your hard earned money as possible. In fact, the sales procedure is so identical and interchangeable that a good car salesman with a proven track record can walk into any dealership in the United States and get a job, no questions asked.

And in today's market the danger is even greater.

With car sales falling every month, dealerships all over America are scrambling to meet manufacturer and individual projections and goals. And with fewer sales, there is only one method available to them, only one way to accomplish their mission: they need to make more money from fewer customers just to stay even.

Think about what is going on.

Vehicle sales were down 28% in June. Rising gasoline prices - approaching $5.00 per gallon in some locations - are killing the industry. General Motors stock recently reached a 53-year low. Inventories are stagnant. SUVs and big pick-up trucks are looking like a 21^st century T-Rex. You would have a better chance of selling acting lessons to Jack Nicholson than selling an 8-cylinder anything to anybody.

So what does that mean to you, the car buyer?

It paints a huge bulls-eye on your back! And when you walk into a dealership, every car salesman sees it! And no matter how good a negotiator you think you are, or how much you think you know about "how it works," believe me, you are no match for an experienced car salesman.

But the games end today.

Because I am going to tell you how the system is stacked against you and, then, how to turn the tables and make it work for you. I am going to teach you how to beat the car salesman at his own game.

When I'm finished telling you what I know, you will never enter another car dealership and find yourself at their mercy.

In general, you will learn how to keep a car salesman's hands out of your pockets and, so, learn to keep as much of your money as possible! (Hey, only a crazy person wants to give too much money to a car salesman, right?) And I say "in general" because there are several different ways a dealership can make money from your purchase. In other words, even if you negotiate a rock-bottom price on the car you plan to buy, you can still pay too much.

Now some of you are reading this and thinking, "I bought cars before and I already know how the game works." If you are one of these people, pay extra close attention to the 10 essential truths about the car business.

TRUTH #1

Salesman love to take advantage of people who think they have the system figured out. If you learn nothing else, learn this: You do not have the system figured out, you do not know how it works ... and neither does your know-it-all neighbor.

TRUTH #2

Managers and salesmen are trained how to walk, talk, make eye contact, instill faith and confidence in them and the system, and finally, how to take as much of your money as possible.

TRUTH #3

Most managers ascended to their positions only after they've proven their worth as salesmen or finance managers, or both. In other words, only after they've become experts at taking your money.

TRUTH #4

The procedure you go through while buying a car is not haphazard or aimless. In fact, there are written scripts that outline exactly what a salesman should do in any situation.

TRUTH #5

From the moment you walk on the lot, the salesman is acting a part. He follows a definitive sales procedure. There is nothing random about the process.

TRUTH #6

Customers who tell a salesman that they have fallen in love with a particular car, or those who divulge any financial information up front, always pay too much.

TRUTH #7

If a manager or salesmen laughs and jokes with you, you are almost assuredly paying too much for the car.

TRUTH #8

The dealership wants you to finance your purchase through their finance department because, when you do, they make a lot of money.

TRUTH #9

If given the choice between making a profit and not selling a car, when the chips are down, the manager will give up the profit and move the car from his inventory 80-90% of the time.

TRUTH #10

And finally, if you believe you have a friend in the car business that will sell you a car without making a profit, you're dreaming.

In succeeding hubs, I will reveal all the secrets dealers don't want you to know!

We will explode their secrets together. We will take the journey into a world of stellar performance, trickery, magic, sleight of hand, deception, and finally, greed.

I know that right now, at dealerships all across the United States, car salesmen and their managers are waiting for you to arrive on their lot so they can wave their make-believe magic wand and make all your car buying troubles disappear.

Let me put it this way - everything about the system is set up to take advantage of you: managers, salesmen, the financing they offer, the service department, the trade-in allowances, the sales extravaganzas, the warranties, everything!

And unless you know exactly what you're doing - and exactly what the dealer is doing - the system will take advantage of you.

Next Hub: First things first.