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    Knowing these few simple facts can put you in a great position to negotiate the financing on your next car (Getty Images).

    Congratulations. You've successfully negotiated the purchase price of your new or used car or truck. You've made a great deal.

    Next you're ushered into the dealership's "Business Office" - also known as the "F&I Office" for "Finance and Insurance". You're introduced to the Business Manager, a pleasant well-groomed woman (or man) who congratulates you on your purchase. She reassures you that you made a wise decision and that the tough part is over so now you can relax. You sit and breathe a welcome sigh of relief.

    As you go through the formalities of signing the various forms and agreements, she casually explains to you your financing terms, your interest rate and other details. Along the way, she offers you several "extras" that will add "mere pennies a day" to your monthly payments. Among these items might be an Extended Service Warranty, Paint and Fabric Protection, Rustproofing, Undercoating, Alarm System, Window Tinting, and maybe even Life, Health, or Disability Insurance.

    You're relaxed. The negotiating is over. And these "extras" sound really worthwhile. Besides, you like this Business Manager. She's so darn nice and sincere. So you agree to the interest rate and financing terms. You purchase the Extended Service Warranty. You even purchase the Paint and Fabric Protection.

    BAM! You just put a small fortune in her purse. Why? Because the biggest secret that the dealership doesn't want you to know is this:

    The "Business Manager" is, in reality, a salesperson working on commission.

    Most of what the Business Manager offers you is negotiable.

    Of course, you probably didn't know that. Most car-buyers don't. And certainly no one at the dealership is going to tell you.

    The plain fact is: Car dealerships often make more profit from the financing of the vehicle and the sale of "extras" sold in the Business Office than from the actual sale of the vehicle itself.

    So what to do? No worries, my friend. Here are some car negotiation tips for dealing effectively with the dealership's "Business Manager":

    1. Don't let your guard down. Just because the Business Manager may seem friendlier and nicer than the car salesman, it doesn't mean the deal is over once you enter the Business Office. It isn't. The deal doesn't conclude until you drive the vehicle off the dealership's lot. So despite how friendly the Business Manager may seem, remember that she's there to make as much money as possible for herself and the dealership.

    2. Arrange your financing before you go to the dealership. Since the Business Manager works on commission, she may try to trap you in a higher-than-necessary interest rate so she can maximize her commission. Avoid the dealership games by arranging your financing before you set foot in the dealership to buy. Apply for an auto loan at your bank or credit union. You can also apply for an auto loan online. Then compare all of the loan offers you've received and choose the best one. Once at the dealership, compare your best offer with the dealership's offer and decide which is the best deal for you.

    You can obtain financing quotes from your local bank or credit union or for free online by using sites such as car.com

    3. Try to negotiate the interest rate. If you were unable to qualify for financing from any bank, credit union or online financier, then you'll probably be stuck with dealership financing. And your auto loan will probably have a relatively high interest rate since you are considered a "credit risk." Nonetheless, if you feel that the interest rate that the Business Manager offers you is unreasonably high, tell her so and ask her to lower it.

    4. Think twice about the "extras." Each "extra" you purchase means another commission to the Business Manager. But do you really need these "extras"? Probably not. For example, you'll certainly be offered an Extended Service Warranty. All new cars and trucks come with comprehensive warranties so you don't need to buy another one. As for Paint Protection, you can apply it yourself by buying any inexpensive "over-the-counter" polymer sealant car wax. You can apply Fabric Protection yourself by buying a can of Scotchguard. You may be able to purchase Window Tinting, Alarm Systems, Pinstriping and other after-market items cheaper on your own. Rustproofing is usually applied automatically in the factory so you certainly don't need to pay twice for it. (Check your vehicle's Factory Warranty to see if it includes a Rust Perforation Warranty. Most do.) And by all means, decline any health or life insurance that you may be offered by the dealership.

    5. Go to the experts for answers. Don't count on the dealership to give you straight answers about financing. Remember, they may say anything to get you to finance your vehicle with them on their terms. So for the real facts about monthly payments, interest rates and other important financing details, ask your bank or credit union for the truth. They'll be happy to take the time to explain it all to you in an easy-to-understand no-pressure atmosphere.

    6. Take the time to learn. Be sure to do all of your research and get the necessary facts before you go to the dealership to buy. Remember that they want you to be hurried and confused. So don't fall for that trap. Take the time to do your research. It'll pay off big time in the long run.

    Michael Royce is a consumer advocate and former car salesman. For more car-buying tips and advice, visit his Beat The Car Salesman website.

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    1 - 20 of 204 Comments
    Chase Dec 29, 2010 7:27 PM
    Yes I was taken for a full stupid (my Fault ) ride. Negoticed a price ok, the car I wanted were not in stock at the time. Couple days the car arrived come, pick it up good. came home bought five new CD to pop in .Sorry cd changer only took. one, called dealer. cant change the cd changer to a 6, which I ordered from the begining. called the Co GMC Cadillac.told to see: dealer, said he cant change. 6 wont fit. Which is a lie. You must recheck eeverything befor leaving the dealership. You better thank
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    cflynnjr1226 Nov 27, 2010 7:31 PM
    There is a reason that Mr. Royce is a "former" Car Salesman, it is because he never quite grasped what the car business is all about. I challenge a few things in his rant; First, the statement about you really don't need an extended warranty is a narrow minded thought! It depends on the individual, and the vehicle that is being purchased. Alot of the extended warranties are great values for the driver who keeps a car for a long period of time, or drives a car for alot of miles. One should be aware of weather or not the Business Manager is trying to charge you too much, but saying they are not needed across the board is a stupid statement! 2nd, his thought about the Paint and fabric protection. He states that you can go buy a can and do it yourself, and that is true, but what you are paying the Dealer in additional costs is for the service of applying the materials, and for the product's warranty against enviromental paint damage (exterior) and against staining (interior). Theses warranties are usualy for as many as 5 years, and will make good if the product fails. Try claiming that at the exchange counter at Walmart, and see how far you get! Mr. Royce sounds like one of the many failures who didn't cut it in the Car Business, thinks he knows everything about it now, and is angry at the industry because HE failed. I see them all the time!
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    achui11 Nov 22, 2010 9:06 PM
    I know it is cheaper to skip the extras or buy them on your own.... but how am I going to use each product?? I am paying extra so I don't have to do it myself......
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    mcfgvbh Nov 21, 2010 9:19 AM
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    unclogum Nov 20, 2010 6:06 PM
    Is the reason the car dealership pushes the extras at you because they are your friend . Or perhaps they are greedy crooks hoping you are dumber than God made pumpkins
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    dougkojak Nov 20, 2010 4:01 PM
    Margins aka Profits..are at an all time low for car dealers. The average spread between MSRP "Manufacturers Retail Selling Price" and invoice are at the lowest % ever. In the car biz, there is dealer holdback.(monies given back to dealer below invoice..usually around 3%"...prepaid floorplan interest "amount a dealer pays to finance the cars until they are sold" paid by the manufacturer....rebates from manufacturers for quick turns"the speed at which a car is sold" Ideally dealers like to turn their inventory over 4 times a year. There are always manufacturer incentives to move units...this aids in superceding the ability of sites like edmunds.com in giving actual invoice pricing to consumers. It always amazes me how cars have their cost posted on the net. But how many times have you gone into sears, bestbuy or ???? and negotiated under the posted price on a tv or appliance? And if you do your google best...you will find that most all books or "tips" are from people that couldn't sell icecream in Hades... so they think they are smart enough to tell you how to buy a car..... Ludicrous !!
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    dougkojak Nov 20, 2010 3:52 PM
    Yet another car salesman that couldn't sell...writing either an article or a book on "how to buy a car" What a joke.
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    cclayken Nov 20, 2010 3:49 PM
    I am a Finance Manager at one of the largest Ford dealerships in the country. Everyday I make an honest income from arranging financing for our customers and also from presenting for their consideration value added items such as GAP Protection, Extended Warranties, Prepaid Maintenance Plans as well as other options. Not everyone finances through my sources. However, in the vast majority of cases, I can obtain a rate for a customer that is lower than what they have been able to arrange on their own. Or perhaps arrange financing with a lower downpayment if that meets their needs. When they take my financing, my dealership & I both make money because the financial institution pays us a fee for bringing them the business. What is wrong with that? I performed a valuable service for the customer, actually saved them money and was rewarded for it. I interview each of my customers to determine their personal needs and habits. I do not try to sell products to a customer that they do not need. Not everyone sees the value of all the options I offer. Some decide to decline all of them. Different people see value in different places depending on their nature and viewpoints. Those who decide to purchase GAP, Extended Warranty or other products ARE NOT STUPID! They are making an informed decision based on their personal situation. I have been in the car business for 26 years. I choose to protect myself, my wife and our five grown children with GAP Protection because none of us is believe it is wise to invest a large amount of cash into a downpayment on a depreciating asset. (OK, my kids believe that because I taught them that). Extended warranties are a way of life for us, and they have saved us thousands of dollars, stablized our budgets and provided great convenience in the form of needed replacement transportation when our cars have been down. Not everyone buys everything I recommend to them and that's fine. So long as they understand the exposure to risk and are willing to accept it, no problem. I do not apologize for making an income from doing what I do. The difference between me and the writer of this article is that I have a grasp on the fact that different people make different choices based on different things. The writer of this article is getting paid to hold themselves out as an expert, extoling questionable advice to a needy consumer who they assume is too stupid to make a decision without their sage consultation. There's nothing wrong with providing consumers valuable information. I do it every day. There is a problem when you suggest that those who do not follow your advice are less than intelligent and that those who make an honest living are shysters and that is what this writer, and most others who write automotive consumer articles, do as a regular course of business. They present information in an alarmist fashion indicating that they're sole motive is to protect the consumer when actually their main motive is to write an article that keeps them employed and getting paid, until a better gig comes along. Also, just to provide some additonal fodder, it has been my experience that 90% of the time when a customer's decision to decline my offerings turns out to a unwise decision on their part, i.e., it's going to cost them money, inconvenience or both, they are typically back in our face demanding that we protect them from their own errors in judgement. They will usually lie, suggesting that they were never provided the opportunity to protect themselves with GAP or an Extended Warranty, or whatever else, otherwise they "certainly would have taken advantage of it". That's why before they leave my office, or those of the others in my department, they sign off on a form that clearly states they were offered the products and elected to decline them. Funny, when something goes wrong, and it usually does, somehow it's still our fault they made what now appears to be a poor decision and they are genuinely offended that we would place their own signature in front of them to support our position that they had their opportunity, made their decision and are now on their own. -- ck, north carolina
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    cmcaledonia Nov 20, 2010 3:43 PM
    I remember quite a few years ago when i walked into a new car dealership with #2 in hand and the salesman still wanted to shake my hand and be my friend."
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    cmcaledonia Nov 20, 2010 3:30 PM
    If you dont want to play games with salespeople when buying a new car, then dont." With so many people out of work or loosing their income these days, it's better for you and it's better for the seller that may not like making payments after being laid off." You can put yourself in a [like]new car for a fraction of the cost and save yourself alot of money."
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    innerpeace35 Nov 20, 2010 3:24 PM
    IF YOUR BANK DOES APPROVE YOU, GO LOOKING FOR A CAR THOUGH A PRIVET OWNER AND LIKE EVERYTHING ELSE DO YOUR RESEARCH. ALWAYS CHECK WITH CARFAX TO SEE THE HISTORY ON THE CAR. THEY WILL ALWAYS FEED YOU THIS CRAP WELL IF YOU BUY A CAR FROM THE DEALER YOU WILL HAVE A WARRANTY. DO THIS GET THE BLUE BOOK OUT AND SEE WHAT THE VALUE REALLY IS FOR THE CAR, AND HOW MUCH THEY HAVE JUMPED THE PRICE UP. ALWAYS CARRY A BLUE BOOK THEY ARE NOT THAT EXPENSIVE TO GET. AND WATCH A CAR SALESMAN FACE WHEN YOU PULL THAT OUT. YOU CAN ALSO GET FREE BLUE BOOK QUOTES BYE JUST TYPING IN BLUEBOOK.COM.
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    innerpeace35 Nov 20, 2010 3:12 PM
    THIS IS A GREAT ARTICLE AND SPEAKS THE TRUTH AND THOSE THAT DISAGREE WITH IT ARE PROBABLY CAR SALESMEN OR MANAGERS. I KNOW, I WAS A CAR MANAGER AND SALESMEN. THERE ARE THREE TYPES OF PEOPLE YOU ARE SUPPOSE TO STAY AWAY FROM, CAR SALESMEN, ATTORNEYS, AND POLITICIANS, BECAUSE THEY ARE ALL LIARS. YOU CAN'T TRUST THEM AS FAR AS YOU CAN TROUGH THEM. THEY ARE TRAINED TO LIE AND GET WHATEVER THEY CAN OUT OF YOU. I WATCHED THIS ONE COMPANY IN ALABAMA TREAT THERE CAR SALESMEN LIKE DOGS, AND WHEN THEY DIDN'T MAKE A SALE DROPPED THE F BOMB ON THEM LIKE YOU WOULDN'T BELIEVE . WHEN I WENT TO THE OWNER AND TOLD HIM HOW IS MANAGERS WHERE TREATING THE NEW CAR SALESMEN, HE LAUGHED AT ME AND I WAS LET GO. DO WHAT THIS ARTICLE SAYS AND DO YOUR RESEARCH, AND STAY AWAY FROM EXTRAS. CAR DEALERS CARE FOR ONE THING ONLY THEMSELVES AND FILLING THERE POCKETS. MY OTHER SUGGESTION IS IF YOUR ABLE TO GET BY AND BYE A CHEAPER CAR AND CAN PAY CASH FOR IT UNTIL YOU CAN GET YOUR CAR OF YOUR DREAMS THAT IS THE BEST WAY TO GO. ALSO WHEN YOU SIT DOWN ADD UP THE INTEREST RATE AND SEE HOW MUCH MORE YOU ACTUALLY PAYING FOR THE CAR OVER THE YEARS, YOU COULD FIND YOURSELF PAYING THOUSANDS MORE THEN WHAT THE STICKER PRICE WAS WHEN YOU FIRST BOUGHT IT. DON'T LET THEM SCREW YOU OVER DO YOUR RESEARCH FIRST. GOOD LUCK.
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    boutfishin Nov 20, 2010 3:04 PM
    Rytaway, I wish you knew the true mark up, it isnt high. Your high-end imports, BMW, Mecedes, etc have high mark up. Greed doesn't just exist in the car industry my friend. The car business has changed a lot in the last 10 years. Too many people are stuck on the sleazinest of the 70's, 80's and 90's when consumers were not protected.
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    damian6934 Nov 20, 2010 3:02 PM
    Rytaway, great point i think you just stated the business model for Saturn one price no negotiating and look where it got them! Out of business.
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    rytaway Nov 20, 2010 2:56 PM
    Ever wonder why EVERY dealership doesnt just charge you the same standard price for the car? Why such high markups. Besides location/overhead, Greed... In the end society will all rip each other off and completely overlook the value and respect of paying a fair price for the level of quality and services rendered...... Research, knowledge, and distrust is key
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    pawmjp Nov 20, 2010 2:36 PM
    Everything in life is negotiable Except Death......
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    damian6934 Nov 20, 2010 2:35 PM
    Youre a Dweeb Mr. Royce, and your article shows your lack of expertise on economic wealth. If you want people to buy cars and the dealer to make nothing, you save nothing and we all pay in the end like the auto bailout by the government a few years back, it cost everyone. I think you should write an article about how to get a correspondent like you for minimum wage then AOL will not have to charge as much for advertising and the public will save in the trickling down of it all. Maybe I should write the next article for free for AOL about the 10 tricks correspondents use to get paid by companies for articles that suck, then you would not make any money and the economy would still be strong. Oh yeah by the way I really dont think the government will ever have a bail out for journalist or correspondents you rank at the lowest possible place when it comes to ethics and integrity. Keep up the very transparent job you have been doing, you scumbag!
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    dadashark Nov 20, 2010 2:26 PM
    Car sales is an honorable sport. The buyers are on one team, the sellers are on the other. Can you immagine the SF Giants giving the Texas Rangers a brake? Not a chance. They took the world series away from them and look at money professional baseball players make. Not that many rich car salesmen. Have mercy buyers. Tip your saleman.
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    chckpope Nov 20, 2010 2:15 PM
    The first thing to consider when buying a car is where it's made. If it's not made in the USA then pass it by no matter how much you may want to buy the car. The big picture is, we as American's are losing lobs and revenue at an alarming rate because these car companies are getting rich on us at the same time moving their plants overseas. Buy American and help us get out of this economic mess, at the same time sending a message to these greedy companies that American made still means something to the average American consumer. What goes around comes around, so if you think it doesn't affect you, it already has, the power is in your hands as the consumer, use it.
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    jimandbarb2801 Nov 20, 2010 2:09 PM
    Every one just calm down. The real enemy is ourselves for allowing good paying jobs to be shipped overseas while we complained about it to one another, maybe said a few cusswords, pounded our fist on the kitchen counter, but otherwise didnt protest about it in the streets like people of other countries do when something they dont like is about to happen. (recent examples: Greece 2009, France 2010). The real reason most people don"t have the cash or credit to buy good cars is because the cash source has largley been cut off for the middle class. ( Good paying jobs, decent salaries etc). That is why we squabble over pennies instead of squabbling over the amount coporations take from us. Here is a idea: instead of worrying about a few hundred dollars here and there why don't Americans put down the tv remote, beer can, bag of potato chips or whatever it is, and protest about getting a higher standard of living therefore you wouldn't have to worry about living from payday to payday.
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