The No Money Down Syndrome

by Michael Hargrove

Each month, I get one or two requests similar to the one I received from a salesperson named Phil who works at a dealership in the northwest. I thought it would be a good idea to share with you his particular e-mail and my response.

Phil wrote:

In my sales meeting today we were told that getting cash down is our biggest problem. I understand that cash down means gross, however the industry advertises “$0 down delivers” and sometimes it is difficult to overcome that objective [objection]. Could I get some assistance with this. Maybe some word tracks or example situations.

My response was as follows:


Sometimes getting the customer to put more cash down simply takes explaining the “math” of the situation. And some of the time, it’s an actual condition of sale; the customer ONLY has this amount down, period.

Most of the time, however, and particularly if the cash down challenge is a consistent problem, it’s due to the way the salesperson sets up the transaction.

When the salesperson responds to the no cash down subject with; “No problem!” and just leaves it at that, it may create problems for them asking for cash down later. I agree with the philosophy of write them, don’t fight them. I also think that we can do this while still setting up the negotiation process to come.

If the customer tells us early on that they “don’t have any money to put down”, we can respond something like this; “Everyone here at Kickass Motors, is absolutely committed to showing each customer the most advantages way to drive the car of their choice. And we’ll do that for you too. Okay?”

If it comes up again, we can respond with something like this; “There are several different ways to make the car you want affordable. What I’d like to do is put all the different ways we can accomplish this for you in black and white, in writing, so you can see them for yourself. After reviewing them all, YOU tell me which way works best for you. Sound good? So, let’s go find your perfect car.”

If they bring it up again, we can respond with something like this; “Folks, not only will we discuss the initial investment but we’ll also cover your monthly budget, interest rates, numbers on your present vehicle, etc. And when it’s time to, I’ll ask you to make your final decision simply on the bottom line. Fair enough?”

You see, Phil, all of these techniques still allow us the opportunity to ask for sufficient amounts of cash down when we begin the negotiation process. It’s in the asking that we get enough down. Don’t ask, don’t get.

At the beginning of the negotiation process, when we ask for 35% initial investment and 24 monthly installments, if they (or rather, when they) protest, we can respond with something like this; “Remember me sharing with you that everyone here at Kickass Motors is absolutely committed to showing each customer the most advantages way to drive the car of their choice? Well, obviously the cheapest way to drive your new car is to pay cash but very few of us are in a position to do that. So, what’s the next least expensive way? …Yep! By financing as little as possible for as short as possible and that’s all we’ve shown you here. So, let me ask you this, how close to that $________ initial investment can you come?”

Now we’ve framed the act of us asking for more cash down as doing them a service, which by the way, we are. Obviously, we can also suggest a lease to them. And, of course, it’s probably a good idea to refer to their down payment as their initial investment, for psych reasons and it just sounds better, I guess.

Finally, ask your manager what alternatives to cash and trade-ins your dealership will accept as a down payment. For example, some stores accept hold checks, old computers, bikes, skiing equipment, boats, trailers, ATVs, racing equipment, musical instruments, jewelry, time share vacations, etc. At a workshop in Tennessee, I was told that dealerships there occasionally take in horses as down payments. Talk about horse trading! Basically, anything that can be resold could be used as a down payment IF you and your store are willing to go through the extra effort. Many cities or counties require an additional/different kind of resale license for these items and some require some kind of “street buy” form to avoid selling stolen goods. Be sure to check with your local authorities to see what they may require. We can also suggest that our customer tries to sell their stuff themselves but that may cause them to delay their purchase until they do.

If all else fails, we can still structure the purchase with no down or a deferred down payment but at least we’ll know that “no cash down” was a real objection and not just a negotiating ploy.

© Copyright 2013 by Michael D. Hargrove and Bottom Line Underwriters, Inc. All rights reserved. Michael D. Hargrove is the founder and president of Bottom Line Underwriters Inc.

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