To ensure you get the best deal when you buy your new car, you should understand how the car dealer will "work the deal" on a four-square worksheet as you are negotiating. The four square worksheet covers everything from your payments to your trade-in price and is used to help close you down and make the dealership the most money. The salesperson gets daily training in getting the most money out of you using the four square worksheet so there is no way this one article can give you every scenario, so the focus is kept on the two most common elements, your trade and your payments.

But first what is the Four Square?

As the name indicates, it is a worksheet that is divided into four squares:

Square 1. Vehicle Price: This is the price of the car. Often a dealer will write the price of the car, list any discounts or rebates, then write "plus Tax and Tag” or just “+++ (plus, plus, plus)," indicating that, on top of the cost of the car, you will pay sales tax, title and licensing/dealer fees.

Square 2. Your Trade-in: How much the dealership will give you for your trade? This figure is credited toward your purchase of a new vehicle. In some states you may also receive a tax credit based on what your car’s worth. The tax credit allows you to only pay taxes on the difference between what your trades worth and the price of the car.

Square 3. Down payment: How much out of pocket money are you are willing to come up with? Down payments made using a credit card and check are also considered "cash up front." Dealers will usually try to get something even as little as the first payment but putting zero down is fairly common.

Square 4. Monthly payments: What your monthly payments will be based on the three other squares. The Salesperson will try to get you the buyer to focus on this figure since it is what most buyer’s car about and can be changed the easiest without as much of an effect on the dealers profit or the salesperson’s paycheck.

Tricks of the Four Square.

If you notice, these four separate pieces or squares are interlaced. If a customer is concerned about receiving a certain amount for their trade, the dealer will raise the amount of the trade-in without discounting the actual price of the car. This is called “Over Allowing” and is very common.

Another little trick of the four square is getting the customer to focus on the monthly payment. The first pencil or numbers usually come out with an inflated interest rate and when the customer wants the monthly payment lowered the salesperson just has the sales manager lower the interest rate to a more reasonable point there by lowering the customer’s payment without changing the price of the car.

Let the Four-Square Work for you.

Try to keep the deal as simple as possible. You may want to consider selling your old car out right rather than trading it or get an outside auto loan through your local bank or Credit Union before you go to the dealership so your interest rate can’t be inflated. Taking these steps in advance will allow you to negotiate on the price of the car rather than playing the monthly payment game.