Understand the Four Square Technique


This particular method of negotiation has been around for many many years and is used in the large majority of car dealers today. The four square is sometimes referred to as the deal sheet, the offer sheet, the pencil and several others.

The simple truth of the matter is that this instrument of negotiations is used so it may put the dealership at an advantage. The four square technique is also used because it is simple tool for the salesman and the sales manager to use to present a car deal structure.

The whole benefit behind this method is for the dealership to get you focused on one of the squares and maybe not the rest, This four square technique will help determine what your HOT BUTTON may be. This example would be, is your focus on payment, or maybe the price of the car, or your trade value etc.., If you have decided to take the dealer on and work with the four square technique for what it is designed to accomplish. Get ready for some challenges, remember this negotiating tool is used every day by the dealer. This may be your first time seeing the four square or something similar to it.

We have spoken about in our web site of the four square method and the benefit of being prepared to enter into this way of car dealership negotiations. If you have followed our lead and set up certain things such as financing, trade value, your down payment and monthly payment decisions etc..,. This Four Square Technique is simple to understand, and can be a strong negotiation tool for you.

To speak openly and straight to the point will be the best way by far overcome any tactic that may be used to get your commitment at the dealerships terms.

The parts of the Four Square Negotiation technique typically consist of the following formats.

Four Square Technique-- Area #1 The vehicle Price. This is presented sometimes as an original retail amount and then adjusted to show you the discounted or sale price of the selected vehicle if applicable. The point is here remember the number described to as the price and/or discounted price is a starting point. WE guarantee you that the quoted price on the Four Square will still have some profit in it. Most State laws say that the Quoted price has to reflect any discounts in the form of factory rebates. The example would be Retail price= $23595 and the Sale price= $20595 showing a $3000 discount right(could be) but if the car is new this could simply be a rebate offered by the manufacturer. If this is the case YOU did not receive a dealer discount at all, rather a rebate that was applied to the purchase price. Be careful of this particular type of quote. If in fact you are entitled to a rebate, make sure you are aware of any an all incentives prior to negotiations. We have seen rebates sometimes as high as $ 6000 TO $7000 dollars or more. This looks really good on paper when a price is quoted. The hope here is to have the customer believe that the discounts they receive are dealership offered. The rebate can start the negotiations, but what about the dealership discounts? Always ask that question, it is really really important.

Four Square Technique- Area #2, The Trade in. This area of the Four Square can also be a little tricky. The things to remember now are that if the dealership wants to gain your focus here, the odds are that the dealership will avoid the rest of the Four Square. The trade value is a figure that starts as an appraisal typically performed by the used car manager or sales manager. This amount is typically a figure that was derived from a few market specific sources such as Kelly Blue Book, Nada Guides, and the auction reports. The dealership will use a formula that includes feedback from some of these sources and ultimately will put a hard money (remember this term) number on your car. This is the starting point that will help determine profit position on the deal. Remember most of the time you are not privileged to the hard money number that was placed on your trade in. If you were, some of the mystery of the deal would go away. The amount that the dealership shows you on paper could represent an over allowance or an under allowance or may be a hard money number. In any case do not stay on this area of the negotiation alone, it will cause you to maybe pay too much overall of the car deal.

Four Square Technique-- Area #3, The Cash Down area is one that will be used to again put your focus on an area that the dealership typically wants you to pay very close attention to. The fact remains that most people do not like to put any money down(specifically in today’s market) IF the dealership can keep you concentrating here, this will make you pay too much.

The example is here that you may get some ridiculous number in the Down payment portion and get a little excited. This is deliberate. Then the comments such as.., if I could get this deal done with less, or you know your payment will go up and so on. They got you where they want you at this point. IF you have secured your own financing who cares about the down payment. Always always remember this fact.

Four Square Technique-- Area #4, The Monthly Payment. This is probably the #1 focus of most car shoppers and the dealerships know this for sure. If your only focused here, look out. A Simple “bump” in your budgeted payment could result in thousands of dollars of dealership profit. This would specially be true if the term is long. $20 could mean another $1000 in the dealers pocket. Remember the numbers do not lie.

We suggest that you do your homework and budget the amount you want to finance, the amount your trade should be worth and most importantly the amount you have decided the monthly payment should be. It will not matter who calculates the payment, it will be the same.

THE MOST IMPORTANT thing to realize here is that though the dealership may want you to go through the Four Square Techniques of negotiation. It should not be required if you set the boundaries that you feel comfortable with and stick to them. We are professional negotiators and would be more than happy to help here, any way we can. (see packages that are available).

REMEMBER HERE that profit is not a bad word, but keep the control over what you feel is fair.

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