The Dealer Four Square Technique »

The Dealer Four Square Technique

New car dealers use various techniques to try to secure a sale with the most possible profit. One of the most popular techniques is called the four square. The four square worksheet helps the salesperson view the total profit to the dealership as well as the separate elements of the deal. The sheet is divided into four squares:

  • Trade-in price: The amount that the dealership will credit you for your trade-in vehicle. This figure is credited toward your purchase of a new vehicle. Consider selling your old car rather than trading it in, you may get more money by selling it yourself.
  • New car price: This is the price of the new car that you want. Often a dealer will write the price of the car in large print, then write "plus fees," in small print, indicating that, on top of the cost of the car, you will pay sales tax and other fees.
  • Down payment: Here they enter the maximum amount that you are willing to put down. The will try to coax the highest amount possible.
  • Monthly payments: Here they enter the maximum amount that you are willing to pay per month.

    • The salesperson will then try to manipulate the numbers to get the most profit while making the customer feel that they are getting a deal. For example, if the customer is only willing to pay a small down payment, then they will write down a lower down payment and an inflated monthly payment.

    Decide what your maximum down payment and monthly payment should be before going to the dealership. Don't tell the salesperson the maximum amounts you are willing to pay, tell them the amounts that you actually want to pay. Write all these figures down and stick to them.

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