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Why do car salesmen ask where you work?

That information comes out during the sales process. Second, he needs to know your ability to pay. There is no point in trying to sell a $100,000 BMW to a person who works a minimum-wage job. To figure out your ability to pay, the salesman typically will ask what you do for a living and where you work.

cbsnews.com - 3 things you should never tell a car salesman - CBS News

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Money 3 things you should never tell a car salesman

1. “I love this car.” iStockphoto Car dealers hope you will fall in love with a vehicle. They know that if you really want a car, you will agree to pay more for it. So, never let on about how much you like the car. Instead, pretend you are in a poker game. You do not want the car salesmen to know when you are happy. Whether the salesman is showing you a Ferrari or a Chevy, your response should always be to point out the car's problems and flaws. Even if you are dying to buy the vehicle, tell the salesman that you might be willing to take it if you get a great price on it. But if you cannot get a good price, you are happy to keep looking. If you can make the salesman believe you place a lower value on the car, he will lower the price to a level he perceives is in line with that reduced value. Of course, no dealership will sell you a car if it means losing money on the deal. So don't hold out for an absurdly low price. That will only communicate that you are not a serious buyer. Instead, the ultimate goal is to get the dealership to take a price so low that it is willing to simply break even on the car in exchange for the opportunity to move the metal off the lot. Do some online research beforehand so you know what the car commonly sells for. Then, start negotiating at a price at least 10 percent below that number. Again, the key to succeeding at this is to show very little enthusiasm for the vehicle. 2. “I work at Acme Inc. as a [insert highly paid job title here].” iStockphoto All car dealers engage in a perfectly legal technique called "price discrimination." In economics, price discrimination refers to selling the same product to different buyers at different prices based on their willingness to pay for the good. Dealers do this as a way to maximize profits. The goal is to charge each customer the most that he is willing and able to pay. To effectively employ price discrimination, the salesman needs information about you. First, he needs to know how much value you place on a car. That information comes out during the sales process. Second, he needs to know your ability to pay. There is no point in trying to sell a $100,000 BMW to a person who works a minimum-wage job. To figure out your ability to pay, the salesman typically will ask what you do for a living and where you work. This may seem like small talk, but it is actually a carefully calculated move to gather information. Thus, you should always downplay the importance of your own job. If you are a neurosurgeon, just say you work in a hospital. Are you a president of a university? Tell the salesman you work in teaching. The point is to go against the natural instinct to be proud of your success. Instead, make the salesman think you have just enough income to afford the car, but only barely.

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