Hey there friend! Car buying is a fun and exciting process, especially when you know what you want and where to get it. That’s the thing though, you need to be in the “know.” Otherwise, you can get played for a chump and spend more money than a car is worth, or just get plain tricked into buying a bad car. That’s why there are a few things any prospective car buyer should do before heading to a dealership.
When buying a car, it comes down to these five things: time, money, mind games, smoke and mirrors, and financing.
This is the easiest trick a dealership will use to their advantage - wasting your time. They’ll offer snacks and beverages to make you feel right at home, like the two of you are “friends.” This is only to weaken you and eventually run out the clock until you’re desperate to sign your name and leave. To avoid this time wasting game, don’t go to the dealership alone, only ask for a test drive, and when it comes to talking price, if the salesperson tries some “back-and-forth” about it with you, tell them to email you the offer because your time is too valuable. Then leave.
There are two important financial factors when it comes to car shopping. One factor is the MSRP and dealership price. “MSRP” stands for “manufacturer's suggested retail price,” or how much the manufacturer says a dealership should ask consumers to pay for the car. Dealerships tend to increase the price of a car above MSRP to increase their profit, and there is usually flexibility with the MSRP. You’d be surprised what you can find out about a car before a test drive - such as the price the dealership paid, which a salesperson will conveniently stash away while they prepare the vehicle for you.
Your budget is the other financial factor. It’s important to know how much you can afford to pay for a car, but that amount should never ever be disclosed to a salesperson. Your budget is only for you to know. The moment you reveal how much you’re willing to pay, a car salesperson will quickly try to stretch that budget by offering extra goods, or they will attempt to match your budget with a monthly payment plan on a car loan where the interest rate will eventually put you over your budget anyways. More on this later.
Ever see an ad for a great vehicle at a great price, but once you get on the lot it’s suddenly not there? Yeah, that’s how they get ya. Now, you’re in their house and they make the rules. You went to the dealership knowing exactly what you wanted with a price in mind, but now that the vehicle is “no longer available”, all of your confidence has deflated like a balloon.
Before going to a dealership, call and make sure the ad is still good and the car is still on the lot for the advertised price. Don’t let them trick you into coming in to see for yourself. If they lie, then you’ll just have to have a nice chat with their manager, which is bad news for them. In addition, do plenty of research so you know what you’re getting and how much it’s worth. Car shopping blind is the fast track to losing out on a deal.
Smoke and Mirrors
Once you find a car and sit down with the salesperson, they suddenly turn into a magician. One of their most popular tricks is taking multiple prices and combining them into a single payment. Sounds great, but by agreeing to this, you lose out on negotiating each price separately for a cheaper final result. Instead, keep all payments separate, and for extra insurance, write it all down and walk away to see if you can get a better deal. The salesperson might say you won’t find a better deal, but you probably will.
Don’t be gullible either. A good magician is a master of misdirection. When closing a deal, all of these extras will pop up that are either unnecessary and/or available for just a “little more money.” It’s the bottom of the ninth, and that salesperson wants to get the most out of that deal on their end. Once you settle on a price, stick to it.
Yes, auto financing can help greatly when shopping for a new car. If you have a job and reliable income, then it’s okay if you can’t pay for the car in full. You just need to make a down-payment about 10-30% of what the car is worth, and the rest can be paid in monthly installments. Depending on your income, this down-payment may even be waived. It all sounds great, but here’s the trick - paying for convenience.
How many times have you stopped at the closest gas station because it’s right there? Or paid a despicable price for a drink at a club, because where else are you gonna go? Don’t agree to finance your vehicle at the dealership you’re buying it at. Like a casino, it’s rigged to make more money for them, not you. You’re better off shopping around and talking to various banks and credit unions that have more competitive rates. They’re not working for the dealership and they want your business.
All of this sounds pretty nasty, but it’s the truth. We’re not saying you won’t run into a car salesperson who is genuine and there to help you out without chopping off an arm and a leg. We are saying you shouldn’t act like little red riding hood and find yourself in the belly of a wolf in suspenders.
Photo Source: Shutterstock; Photo Copyright: Sean K