It is not as clandestine as something that goes down at the CIA, but buying a car involves uncovering the Holy Grail of secrets that determine whether you get ripped off by an over zealous automobile sales representative. Not every car salesman implements shady business practices to motivate you to sign on the dotted line. However, let’s face the truth.
Car buyers are one of the most vulnerable consumers and that is not good when the purchase price of a new car often exceed tens of thousands of dollar.
Let’s arm you with the secrets you must have to sit down at the negotiating table.
Perform Thorough Research
The key word here is not “Research,” but instead “Thorough.” Almost every car buyer performs some type of research to select the right make and model. You need to put in the same amount of time you put in when you perform research for the purchase of a new home. Yes, most vehicles cost less than homes, but a poor car buying decision can rapidly cost you money for maintenance and insurance expenses on top of the sticker price.
Online resources such as Car Connection and Kelley Blue Book represent solid places to start your automobile research.
You Control Your Own Destiny
Research earns you several rewards, including putting you in charge of the car buying process. Nothing unnerves an auto sales representative more than a well-informed customer. Dealer games and gimmicks do not work on educated car buyers. Walk into dealerships presenting the appearance of a confident consumer who cannot be pushed around the sales floor.
They Prefer You Remain in the Credit Score Dark
The Taco Bell commercial that begs the question “Whose they” has some relevance for consumers in search of new and pre-owned vehicles. “Whose they” in the car buying process? They are the finance managers that ultimately decide what consumers can expect to pay in interest for funding car purchases. What “they” do not want you to know is your credit score. If you do not find out your credit score, you become a target for an unscrupulous sales rep and finance manager to increase your interest rate way above where it should be. You are allowed under the law to receive one free credit report per year from each of the three primary credit reporting agencies.
Take advantage of that!
Waiting is Not the Hardest Thing to Do
Auto sales representatives earn commissions for compensation. Many dealerships allow sales reps to draw a monthly salary based on expected commissions earned throughout the month. Car sales reps must also at least meet sales quotas. Why are these two points important? The answer is if you wait to shop for a car towards the end of the month, you might do business with a sales rep that needs to sell cars to earn commissions and meet the monthly sales quota. This means you are more likely to receive a deal on the purchase price and or get cash back for financing with the dealer.
Beware the Wolf in Sheep’s Clothing
Many dealership finance managers like to waste your time by playing the good cop, bad cop routine. Guess what: the finance manager is the supposed good cop, while the sales rep is the bad cop. Yet, beware the finance manager who tries to offer you extended warranties and other perks in exchange for a higher down payment or an increase in the lending rate. Moreover, beware the wolf in sheep’s clothing that claims he or she has to seek financing approval from an outside source. The finance manager should be the end of the financing trail.
Bonus Tip: Enjoy the Online Treasure Hunt
Most dealerships offer discounts and run promotions on their websites. Make sure to access the dealership’s website to reap the financial rewards of printable coupons and code accessible promotions. Going online before visiting the dealership probably will not save you thousands of dollars, but it can knock several hundred dollars off the purchase price of a car. The manufacturer might also offer additional incentives on the company website.
One more thing: Try to squeeze as much out of the dealership as you can. After completing a car transaction, the urge is to hop into the new car and race away from the maddening negotiation table. You can still benefit from other types of deals, such as asking the service department for discounted maintenance on your new vehicle. Many auto service departments offer little perks like a free first oil change or regular maintenance discounts to get you to use the dealer’s service department.