The art of negotiating is a culmination of three topics: negotiating, financing, and knowing the 4-square. Because the process can become complex and confusing very quickly we have put them together in a format to make it easier to understand. Plus, every dealership you visit will negotiate this way so it's better for you to learn the way they do it.
The first thing to know is the 4-square is the form dealerships use to negotiate with. It's simply a form that has 4 squares on it each representing a different financial value. One square represents the selling price of the new vehicle, another for the trade-in value, another for the down payment, and the other for the monthly payments on the new vehicle.
In order to save money on your purchase it's neccessary to learn how dealers use it to do this. And they do it right in front of you while you're looking! Salesmen are trained to use this form to maximize the dealers profit and the sales managers are masters. The sales manager will write in a deal on the form with terms that are very favorable to the dealer. This is called the first pencil. The salemen bring the deal to their customer and present the mangers offer to them. Then, they wait for an answer. Usually the offer is something like the following: MSRP or higher for the new vehicle, below market value for your trade-in, a large down payment, with unusually high monthly payments. How To Negotiate A Car Deal 2
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