Monday, September 22, 2014
Don’t be the Victim Of A Car Dealer
(1) Be sure that you buy the right, type, make, and model vehicle for you. The best reference source for this is Consumers Reports magazine also available online. Even if you’re sure that you know the exact vehicle you want, be sure to take it for an extensive test drive…a minimum of a few hours. You may have owned several Chevrolet Impalas over the years and love them. The new model Impala may have some changes that you aren’t happy with. Never, never buy a vehicle, used or new, without driving it first. You would be surprised how many people make this mistake.
(2) Once you have chosen the type, make, and model you want, carefully choose the options and accessories you need. Always try to buy factory installed, rather than dealer installed, options. If you have no choice, be very careful that the dealer installed accessory is one of quality, is necessary and is worth the money you’re being charged. Dealer installed accessories normally have gigantic markups (200%+ is common) and are added to the car for only one reason…to increase the profit on the car you chose to buy. Some examples are nitrogen in tires, “protection packages” including paint sealant, fabric protection, emergency road assistance, etc., window etching, and pin stripes.
(3) Now that you know the exact vehicle you will purchase, you can calculate the exact manufacturer’s suggested retail price (MSRP) for that vehicle. Knowing the MSRP allows you to find the biggest discount from MSRP. Be very careful not to let a dealer substitute their retail price for the MSRP. This is a common trick in advertising when they refer to their retail price as “dealer list”, “list”, or “sticker”. Most dealers add “addendum stickers” alongside of the MSRP sticker. This is so they can inflate the markup of the true MSRP and make you believe you’re getting a bigger discount than you really are. The true MSRP is displayed on a federally mandated window sticker called the Monroney Label after Senator Mike Monroney. He spearheaded this law in 1958 to give car buyers a fair basis for comparing prices with several car dealers. If dealer “A” gives you a $500 discount, “B” a $1000 discount, and “C” a $2,000 discount you clearly get the best price from Dealer “C”. As simple as this sounds, car dealers will fight you “tooth and nail” to avoid giving you their best discount from MSRP. This is because this makes it too easy for you to buy the car at the best price.
(4) Rather than arguing with a car dealer about giving you his best price or discount, use the Internet. You can use a car buying service like www.TrueCar.com, Costco Auto Buying program, or simply request a price from several dealers via email. A helpful hint is to use a fictitious name and telephone number so that you’re not “hounded to death” by car salesmen. You can also create a different, free email address using Google G-Mail, MS Outlook, or Yahoo just for this purpose. The Internet is best for getting at least 3 competitive prices because car dealers know that they have just one chance at your business over the Internet. If they refuse to give you a price or give you too high a price they can’t win your business. When you choose what “appears” to be the best discount from MSRP, call the dealership and verify that it’s the “out-the-door” price with only state sales tax and state license and registration fees added. Another word of caution is that dealers often try to hide “dealer fees” by labeling them to sound like government fees related to your license plate and registration fees such as “electronic filing fee”. If the dealer has a dealer fee, doc fee, dealer prep or any other phony fee that is not levied by the local, state, or federal government, add it to the price he quoted you before you choose his price as being the lowest.
(5) Finally, never visit the dealer that you’ve chosen that has the lowest price without having shopped for the lowest finance interest rate with your credit union or bank and the highest price paid for your trade-in. You should check with at least 3 car dealers of the same make that your trade-in is. If you’re driving a Ford, visit the used car departments of at least 3 Ford dealerships. Tell the used car manager you have an “extra” car in the family and you will sell it to the highest bidder. Be sure you make it clear that you do not want to buy another car. Another good place to get a bid on your trade-in is CarMax.
If you carefully follow the 5 steps above, you will not be a victim of a car dealer. In fact you will get a very good price on the vehicle you buy, as well as a low interest rate on your financing and the highest trade-in allowance.