How Dealerships Use Four Square Negotiation to Trick You
Car dealerships use a technique called Four Square to confuse and wear down customers. After the salesperson gets you to initial on a worksheet, they take it to their manager and return with numbers that are much higher than expected.
They then manipulate you by focusing your attention on the down payment and monthly payment boxes on the worksheet. Learn how to avoid getting boxed in by negotiating each of these components separately.
1. Focus on the sale price and trade-in value
Dealerships use a worksheet called four square to juggle your trade in value, new car price and down payment with monthly payments. This method looks innocent enough but is a psychological shell game designed to confuse you and trick you into closing a deal that only benefits the dealership.
The salesperson will often start with the top two boxes of the four square – sale price and trade in value. Once they have you agree to these numbers, then they will move on to the lower boxes – down payment and monthly payments.
To beat the dealerships four square dance, make sure to negotiate all of these items separately and stick to your budget. It is a good idea to consult services like Kelley Blue Book to get accurate valuations of your trade in vehicle and also get pre-approved for financing before visiting a dealership. This will allow you to focus on the most important square of the four – the sale price.
2. Focus on the down payment
Dealership representatives work to make a profit, but they also want to ensure that the car you buy fits within your budget and is what you really need. To do this they use the four square method of negotiation. This involves presenting you with a sheet of paper with four boxes, each one representing a different component of the deal, such as the sale price, down payment, and monthly payment.
The first two boxes, the sale price and trade-in value are negotiated first, but once these figures are agreed upon, the salesperson will move you to the fourth box, the monthly payment. This is where they will juggle all of the other numbers around to trick you into thinking that you have a good deal.
The number they will put down is usually double what you expected and will inflate your actual monthly payments well beyond what they should be. Resist the temptation to focus on a monthly payment until you have settled on the new car purchase price.
3. Focus on the monthly payment
The dealer will try to draw your attention away from the first two rows of the four square which are for trade in value and price of new vehicle and onto the bottom row of down payment and monthly payments. Here is where the dealership will attempt to jack up your monthly payments way over what they should be.
Once you have initialed all four boxes, they will send the paper to their manager and come back with a new number in the down payment and monthly payments box. They will most likely make it lower than what you agreed to but the dealer can easily jack up the interest rate and stretch out the term of the loan to pad their profit.
Car buying is full of numbers and the dealer’s four square method preys on consumers’ lack of detailed knowledge and their reluctance to admit they don’t understand. Don’t let them use it against you!
4. Focus on the trade-in value
The car salesman will start by presenting his four square and he’ll quickly begin changing numbers around on the worksheet (also known as a “four-square”). He’ll be crossing out one number and writing in another, circling other numbers and drawing arrows and symbols on this ragged looking piece of paper. This is all part of the car dealer negotiating trick to confuse you and make it difficult for you to focus on the real numbers.
He’ll usually start by talking about your trade-in value and then he’ll go into the cash down amount and monthly payment. These are the two areas that most people gag on, so the dealership can easily manipulate them into a deal that meets their profit goals.
By focusing on the key items and being aware of how the dealership will use their 4 square negotiation strategy, you can get a great deal on your next vehicle. Remember, a good way to simplify the process is to negotiate with outside financing already in place.