If You Know Their Rules ...
You Can Play Their Games

The bottom line is that the car market is one of supply and demand. The car dealers are the ones who introduced the negotiated price, and now, until they find some other way of selling cars, they have to live with the reality that most people have been taught not to pay sticker.

The Nearly Impossible, Dream
Most dealers dream of having a line of cars for which demand is just slightly higher than supply. And sometimes, on certain models, this is the case. Show me a dealer with a hot car in great demand, and I'll show you a stone wall when it comes to negotiating. However, this tends to be the exception. Because manufacturers must meet their financial forecasts, they press their dealers into accepting more cars than there is demand for. The idea is to get the cars on the dealers' lots and then let the dealer "blow them out," which is industry parlance for selling cars at lower prices in order to reduce the inventory. Dealers know that when sales are slow and the production line is and the producing sales, the factory representative will come around pressing them to take more cars.

Now you might assume that a dealer would just say: "Hold it. I've got a, two-month supply, and I won't buy any more cars until I've sold some. "

While factory representatives might sympathize, their job is to push cars into dealer lots. So if they have a dealer who resists taking his or her quota, the factory representatives will sometimes retaliate by shorting or denying the dealer the hot-selling cars-the ones that make the big profits. Or the representatives might unload a bunch of cars with colors that are in low demand. The standard joke is: "If you don't cooperate, you're going to find an awful lot of green cars in your next allocation."

Bottom line: If the dealer wants to get the hot-selling cars and keep the factory representative on his side, he accepts the inventory, then moves it out with special sales, sales spiffs, rebates, tent sales, and just about any ploy or gimmick he can think up.