Question

When negotiating the price of any car, which of the following statements is true?

A) The car dealer earns a small profit if the customer doesn't negotiate and pays full price.
B) Dealers that negotiate will purposely price cars below the price for which they are willing to sell the car.
C) Salespeople are trained to act as if they are giving the car away.
D) The salesman is uncertain of the price at which he can sell you the car until you begin negotiations.

Answer 1

Dealers that negotiate will purposely price cars below the price for which they are willing to sell the car.

Step-by-step explanation:

When negotiating the price of a car, it is true that dealers that negotiate will purposely price cars below the price for which they are willing to sell the car. This is because negotiating allows the dealer to create the perception that the customer is getting a good deal, even if the final price is still profitable for the dealer. However, it is important to note that the dealer's willingness to negotiate may vary and not all dealers will follow this pricing strategy.

For example, a dealer may list a car for $10,000 but be willing to sell it for $9,000. By negotiating with the customer and agreeing on a final price of $9,500, the dealer creates the perception of a discount and the customer feels like they got a good deal. In reality, the dealer still earns a profit of $500, even though the customer negotiated the price down.