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Five "trick" car dealership questions -- and how to answer them

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There's a lot of tongue-waggling that goes on when you're haggling for a new car. Dealers will sometimes ask key questions designed to divert your attention and maximize their profit. Listening for these questions and refusing to take the bait will help you stay in control of the negotiations and get the best deal. Here are five questions to listen for -- and the proper way to answer them.

1. "What kind of monthly payment are you looking for?"

In some cases, this is an honest question: If you're looking to buy a $50,000 car on a budget of $300 per month with a $1,000 down payment and no trade-in, the dealer will know right away that you're wasting his time. Still, it's best to negotiate based on the cash price of the car, not the monthly payment.

Before you negotiate on any car, do a little math: Start with the sticker price of the car, add in 15% for taxes and finance charges, subtract your down payment, and divide by 36, 48 and 60 to get a rough idea of monthly payments. (Don't forget that your car insurance premiums may go up as well.) Can you really afford this car? If you can't, you might want to respond by asking what a lease payment would be like. (Leases offer lower payments, but may have mileage limits and require you to give up the car at the end of the term.) You should also consider shopping for a loan before you buy your car.

Your answer: "Let's negotiate a cash price, then we can figure out what the monthly payments will be."

Learn more:
How to shop for a car loan
How to set a new-car budget
Should you lease your next car?

2. "Are you going to trade in your old car?"

Many people rely on the cost of their trade-in to offset the price of the new car -- but negotiating with a trade-in just complicates matters and gives the unscrupulous dealer yet another set of numbers to manipulate. Remember, the value of your old car isn't going to change in the time it takes you to hammer out a deal. If you're planning to use your trade-in as a down payment, you should have an idea of what it's worth (see "What were you hoping to get for your trade?" below); still, it's important to take one thing at a time -- and the first thing is to negotiate the price of the new car.

Your answer: "I haven't decided yet. Let's figure out the price of the new car first."

Learn more: To trade or not to trade

3. "What were you hoping to get for your trade?"

Again, this can be an honest question, but why throw out a number first? If you say you want $10,000 and the car is really worth $12,000, you've just given the dealer a $2,000 present. It's important to have a realistic idea of what your trade-in is worth; use a site such as Kelly Blue Book, look up the trade-in value -- the site will ask about your car's condition; be honest -- and remember that the dealer must offer a price low enough that she can clean and refurbish your car then sell it for a fair asking price while making a profit. Still, its best to let the dealer throw out the first number -- just brace yourself for a ridiculously low offer (a tactic to make you think the car is worth less than it is).

Your answer: "Let's see what you come up with. Make me an offer."

4. "Can you hold on a few minutes while I talk to my manager/check the computer/make a few calls/do whatever?"

Some dealers will try to drag on the negotiating process as long as possible in the hopes of wearing you down or confusing you with even more numbers. Set a fair time limit for negotiations and when you're within half an hour of that time, tell the dealer you need to leave and will be back tomorrow. Chances are this will speed things up greatly. (Ignore pleas of "This deal is only good today" -- if it's a fair price, the dealer will take it tomorrow, and if they won't, another dealership will.) When you hit your time limit, be sure to follow through: Ask the sales rep what his hours are tomorrow, then go home, get a good night's sleep, and return to the dealership well rested and well fed. You'll be in a much better mental state to negotiate.

Your answer: "I have to leave in X minutes. If we can't finish up by then, I'll come back tomorrow and we can conclude the deal."

5. "What can I do to get you to buy this car today?"

I've always wanted to answer this one by saying, "Put on a clown suit, play 'Sweet Home Alabama' on the tuba, and then sell me the car for $25." The answer the sales rep is hoping for is "Get the monthly payment under $X," "Get the down payment under $Y," or "Give me $Z for my trade." She can then focus on that one aspect to close the deal -- "See, I got the payment under $X, let's sign the papers." (Meanwhile, she's offering you $500 for the two-year-old Mercedes you're trading in.)

Your answer (provided you don't want to use the clown-suit one above): "Give me a fair price and a fair offer for my trade, and I'll buy this car today."

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