When you walk onto a car dealership lot, you are immediately met with salespeople who are trying to get you into a new car. They use psychology to make you buy now instead of continuing to shop around. In this blog post, we will explore some of the ways that dealerships use psychology to influence your purchasing decisions. We will also provide tips on how to resist these tactics and buy the car that is right for you!
Why Psychology Is So Important To Car Buying
Car dealerships know that people are more likely to make a purchase when they feel strongly about it. That's why they use psychological tactics to focus your attention on the car and make you feel good about buying it. They target certain emotional triggers like excitement, fear of missing out, and anticipation in order to get you to commit to the sale.
Unlike most purchases that are made out of necessity, buying a new or used car is a process that is almost always begun out of necessity but completed out of emotion.
Car dealerships know that this is an emotional journey. It is one where you need to feel confidence, leading to joy ... but that there's a significant amount of negative emotions associated with the process as well, including fear, discomfort, and dread.
Let's take a look at some of the things that car dealers do to play with these emotions so that you will ultimately buy that new car from them instead of shopping around.
What To Look For When You Begin Car Shopping
For the most part, we're talking about shopping for a car at a traditional dealership. Sales tactics vary greatly between online sales teams compared to brick-and-mortar dealerships like you might find locally on the "Mile Of Cars" or whatever your town calls the district where you find dealerships located.
Creating Urgency by Building Excitement Around A Purchase
Perhaps the most important tactic that a dealership will use is to create a sense of urgency around the purchase. The salesman will emphasize that this is the "best deal" they have seen in a long while and they might even say that you need to act now or else miss out on an incredible opportunity.
This tactic plays into our emotions and creates excitement around buying the car. It also makes us want to take action quickly so we don't lose out on this great offer.
Making Your Purchase Feel Like A Gift Or Prize
Buying a car is a major expense. Whether you spread it out over years of smaller payments or buy it all in cash right now, spending money is rarely fun. So, instead of making it feel like you are just buying a can of beans from the supermarket or something mundane like that, auto dealers will add things like ribbons to the car. While these giant bows make the event seem that much more special it transforms the process into one that is purely emotion and who doesn't love getting an awesome gift?
Those car bows may only cost $10-50 dollars depending on how big and fancy you go, but they can help close a deal that nets the dealership thousands of dollars over the lifetime of a new customer!
Likewise, you'll see auto dealers doing promotions where you can spin a wheel and win an iPad or tickets to a sporting event if you buy the car today.
Both of these tactics are purely about emotion and while there's nothing wrong with it ... you should never make a purchase as expensive as buying a new car, just because there's a chance to win football tickets!
Manipulating Interest Rates and Addons vs Discounting The Price
The not so hidden secret in car sales is that the sale of new cars isn't as profitable as selling used cars and so financing tends to be both a profit center for a dealership as well as a way to manipulate the actual cost of the car.
Salesmen have been trained to quickly shift the conversation about price from the large scary number to one based around "how much can you afford monthly". By doing this, not only will customers often be able to consider a more expensive vehicle than they may have initially wanted - but the car dealer now has an opportunity to make more money.
For instance, you might see a fantastic promotional APR and get very excited about buying the car. What is happening in this situation though is that the price of the vehicle is actually being discounted and money is being spent to buy down the effective interest rate instead.
Likewise, you may see addons like floor mats, car washes, oil changes, and other VERY HIGH margin items that are added in "for free" if you buy the car from them, instead of actually lowering the price.
This is why you should always negotiate first on the overall price of the car. Then, once you establish the total price you are willing to pay it is time to negotiate the details on what you will pay monthly and how much down payment you will need.
Sales Tactics Aren't Bad Unless They Are Deceptive!
Car dealers have a bad reputation because frankly not every car salesman is going to perfect. This is why many dealerships have worked very hard to eliminate the more aggressive tactics that may have worked in years past.
Today though, while you still need to enter the process having done your research, the process of buying a new car car be more exciting than ever and less filled with dread.