Salesman have authority to sell, they have guidelines to work with. We used to have deals like this:
Most cars have a 9-12% markup, perhaps 14% on options. We'll assume an 10% markup, or $2500. Mot if not all salesmen can sell that car anywhere from sticker down to $100-$200 over invoice without going to a a manager. The manager appraises the trade and gives the salesmen the numbers, and he goes to negotiate.
The salesmen's job is to MAXIMIZE profit because that's how he gets paid. That is NEGOTIATION. Let's say the customer's car is worth $10,000 wholesale to the dealer. The salesmen knows that too. Of course, customers think the salesmen should discount more and that their trade is worth more, etc. Again, negotiation occurs. So, the salesmen might show you $9500 for your car and $1000 off the new one. That's his offer to you. You know, some folks take that deal.........most do not. That's where negotiation occurs.
If the customer wants $5000 off the car and some huge number for the trade, that customer would get turned over to the manager. Its then up to the manager is decide how serious of a buyer that customer is. If its clearly not going anywhere, the manager lets the customer go. Some folks are unrealistic no matter what the real numbers are........
Many customers want to negotiate directly with the managers. At abusy dealership, that's not always possible. The salesmen's job is to get an OFFER from the potential buyer. If there's no offer, there's no negotiation. The dealership almost always gives a first offer. They are not going to go into holdback and overappraise a trade based on a "non-offer" from a customer that in many cases didn't even drive the car they want to buy.........