Throughout this process, you might wonder how you can triumph in this deal. Who has the advantage - you or the dealer? The best odds lie with the informed buyer. Here is a list of advantages that the dealer and the buyer have.

THE DEALER’S ADVANTAGES:

• The salesperson is the expert in the field. He knows the product thoroughly. He understands the economy and the market. He is familiar with all available options, prices and all the numerous relevant details.
• The salesperson sells on a daily basis. He understands buyers because he practices these negotiations with customers every day. He knows what it takes to join a reluctant buyer and his fantasy car. He knows how to close a transaction. You, on the other hand, have only one shot to be successful. You are faced with the choice of spending a major part of your disposable income. You may not have prepared as well as you could have. The salesperson can spot all this and uncover exactly what will make you commit to a new car. He is naturally attuned to discovering these things, and his sales training on how to sell you a car more efficiently will work in his favor.
• The salesperson has the personality for high-pressured sales. A successful salesperson is smooth and aggressive and can easily force or defuse a confrontation. In many cases, he can impose his will on a customer. He is drawn to sales because of his personality. As a rule, he has a much stronger personality than the general population.
• You are on the salesperson’s turf. It is much easier to give in to a salesperson’s pushy personality in the showroom. It's not your home turf.
• Chances are, you need a car right away. Only the car dealer can meet this need. If you wait until the last minute, when your car breaks down, you will lose much of your bargaining power in the dealership. It's tricky fighting for a fair price for your trade-in when it doesn't run, and it’s hard to threaten to leave the showroom if your car won’t start.
• The dealer is focused and decisive. Even if a customer desperately needs a new car, the typical customer still has many questions: Should I buy a car? Can I really afford one? Should I fix up my old one and make do? The salesperson, however, only has one thing on his mind: making that sale.
• The salesperson has reserve troops. If he can’t sell you a car because of a personality clash, there are other salespeople who can and will. If he needs more help, he has "closers" and general managers to convince you, to wear you down, or to give you more information. He can also tempt you with flashy brochures displaying the car you want to purchase – making the buy even more tempting.
• Dealers have their own system. The salespeople know the system like the back of their hands. Their plan moves into action the second an interested buyer ventures into the showroom. Their system is designed to extract as much cash out of the buyer as possible. All the car companies use the same system.
• The salesperson has limited authority. Regardless of what he says, he cannot be held to anything because he has to "check with his manager". Your authority, on the other hand, is binding. No matter what you say, you are held to your word. This tactic is used extensively by many negotiating professionals. If you change your mind or back away from the deal, the dealership may challenge you and might even call you dishonest. But a salesperson always has his boss to fall back on, who just won’t allow him to give you that big price break.

THE CUSTOMER’S ADVANTAGE

Have heart; as a car buyer, you do have some advantages as well. These advantages are so strong that dealers have devised a whole system to counteract it. In order to benefit from these advantages, you have to grasp how to use them.

• You choose the time and place. While the dealer is languishing in the showroom, you have the freedom to go to any dealer you want, at any time. You can buy a car when it is convenient for you. Of course, only you can determine when that time is. Remember that the typical best time for purchasing a car is one to two hours before the dealership's closing, on days near the end of the month, or on a rainy weekend, when most customers would rather stay home. If you are able to combine all these factors, you gain a definite competitive edge. This timing will give you a few hours to test drive the car you want, inspect the car and have your trade-in appraised before getting down to serious negotiations. Salespeople, as everyone else, strive to go home early. If you arrive in the middle of the day, they have the rest of the afternoon to quibble with you. The later you keep the sales staff after hours, the more they want to finish the sale quickly. Buying a car at the end of a month adds a further advantage. All dealers are rated by their monthly volume, and at the end of the month they are more willing to yield on pricing to get in one more sale. Holidays and any time the economy is suffering are also times when dealers are anxious to make a deal and may bend easier under pressure. Purchase your vehicle when the sellers are tired, distracted or in need of a sale. They can’t pick a time to sell a car, but you can pick a time to buy a car.
• You can walk out. The dealer cannot. As long as you stay in the showroom and haggle over the purchase, the salesperson must also stay. He can’t walk out and leave you stranded in the middle of the showroom, but you have the luxury of dropping the negotiations at any time to try elsewhere. Threatening leave is a risk he can’t match. If the salesperson is confrontational or pushy, your implied threat of leaving is often enough to control his conduct and convince him to make his best bid quickly – before you disappear. You have the power to initiate the deal and to terminate it. The salesperson does not.
• It’s your money. Sales staff is trained to respect the customer as king. The staff may not like it, but it realizes that the customer must be satisfied with the deal to spend his money at the dealership. The salesperson is limited to following a “script,” yet you can speak or act pretty well the way you want, even if you are indecisive or make an outrageous offer. Don't be afraid to remind the dealer of this.
• Your power grows over time. As the bargaining progresses, the dealer’s position grows weaker as yours grows tougher. Many think that the longer they sit in the negotiation room, the weaker their position gets. This is not the case. In the early stages of the deal, if you walk out, the salesperson has not wasted much time and effort on you and won’t be too phased by your departure. However, he has invested hours of effort, he will be more concerned about losing the sale. His position in the company may be at risk. The finance employee is in even more of a predicament. After a vehicle has been sold, if the deal falls through, he must answer not only to the general manager, but to the salesperson as well (who was banking on the sale). A car buyer’s power multiplies up to the point these he signs the contract. As soon as he signs, his prowess immediately decreases. Therefore, the longer you keep a salesperson tied up in negotiations, the better deal you can drive, since he has invested more time in selling the vehicle. So take your time.
• You may reach a point where the negotiations reach a deadlock, in which you and the salesperson cannot agree. You can deliberately create a deadlock and resolve it later if you wish. You can give in for a later concession, or you can refuse to concede and walk out on the deal. Don’t worry if you can’t agree on every point. It is not a sign of weakness or lack of skill on your part, but the opposite. Deadlocks are especially useful if the dealer has classified you as a serious prospect. In that case, he will bend over backward to reach an agreement and break the deadlock. Remember that your negotiating power plummets once you sign. Never worry about losing control as the negotiations proceed.
• To demonstrate this concept, consider how a salesperson would explain to his manager if he claimed two hours of overtime to close a sale that fell through at the last minute. Even worse, what would the finance and insurance (F&I) employee say to the salesperson and manager if he lost the sale after everyone else stayed two hours after closing?

Even though the dealership appears to have a huge edge, we see that on closer inspection, that is not true. Remember that a well-informed consumer carries the advantage.