Avoid the Dealership Game
Know car salesman tricks and get through the process faster.
Buying a new or used car can be intimidating. It can also be time consuming. It can also drain your wallet. The last time I bought a vehicle was 2001. That vehicle, a 2000 Chevy Tahoe still runs like a champ and looks like a beauty. I had been driving a 1996 Pontiac Bonneville which I loved and hoped to drive for many years. However the car developed problems and $2,000 in repairs did not fix the problems.
I could have used that $2,000 as a down payment on another car, and it was a hard lesson to learn. The Bonneville had a vacuum-leak issue (or so I was told) and it became dangerous to drive. For no apparent reason the car would surge forward and I was afraid I may unintentionally run into someone or something.
The one thing I dreaded more than driving the car was dealing with salesmen at dealerships. I went to Half-Price books and picked up a couple of paperback books on dealing with salesmen. I think I spent less than $20 but the information saved me thousands of dollars and many hours.
Before you ever visit a dealership, make a copy of your driver’s license. Right next to your copied license write the following, “Permission is not authorized to run a credit check”. You will need to take this to every dealer you visit.
Car dealers know how to waste your time and they know how to size you up. Once they run your FICO credit scores, the proverbial cat is out of the bag. They may know more about you than you want, and they want your driver’s license.
One of the reason’s they will ask for your license is to ensure you are current with the state and actually know how to drive. Another reason is to hold you hostage. I mean that literally, if you don’t take a copy of your license then they will have to make one for themselves. While doing this, you can’t leave. You can’t get up and drive off even if you want to, because they have your license. It doesn’t matter to them how frustrated you may get in your cozy chair with your hot cup of coffee. This is a delay tactic.
Getting the deal
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The second thing on the list is never sit down. Once you are cozy in a lounge chair, or if your kids have been parked in front of the dealership tv, just know that you have given up several hours of your time. The car salesman wants to find common ground so you will trust him. I don’t care who the sales person is, he or she is not your friend. Their job is to make the sale, sell you on premium upgrades, low ball you on a trade in and inform you that because of your credit rating, they can only offer you a certain finance rate.
My credit score was around the 750 mark so I knew that financing would not be a problem. The salesman told me the best they could do was 10%. If I had been drinking a beverage, it would have ended up on his shirt. I knew my credit union would have a much lower rate, but I didn’t tell him that. I ended up financing the loan through my credit union for 4%. This saved me thousands of dollars.
I spent several weeks visiting dealerships (never once giving them my driver’s license, always a copy) but I could not find the vehicle I wanted. I really wanted an SUV, but truthfully I didn't know much about them. I had gone to lunch with a co-worker and loved the stadium-like view’ of her Cadillac SUV. My view from the Bonneville was a view of someone’s tailgate.
I drove a Chevy Tahoe at the first dealership I visited and fell in love. Here’s another tip. Do not show any affection for the car you test drive. That is a suckers game. If the salesman knows you love it, the game just ended for you. He knows that you will buy premium add-ons, will wait endless hours and that you just won’t care about the interest rate he’s going to offer. You have bitten the line and he’s about to reel you in.
You have probably heard the saying, “Know before you go”. This applies to more than just cars and a little research on your part will save you frustration while you are on the lot. Personally, I never recommend buying a brand new car. My reasons are both financial and common sense. I prefer to buy a one-year old car for a couple of reasons. Number one reason is that it is probably still under warranty, depending on mileage. Number two reason is that it has already depreciated in value for a year. Number three reason is that a one-year old car is more affordable than a brand new model of the same car class.
DO NOT TELL THE SALESMAN IF YOU ARE TRADING IN. If he asks you about it, be very non committal and completely nonchalant about your current vehicle. This is a source of bargaining power for you later on. Do not give up this power. Do not give him keys to your car. Do not allow your eyes to twinkle if he makes an offer on your car which will lower the cost of the one you want to buy. Don’t be a sucker. Don’t allow any further conversation about your car. This is a final part of negotiating the price of the ‘new’ car you want to buy.
I knew the value of my Bonneville and I didn't owe any money on the car. I did some research and the value was $5,000. Keep in mind that I was having problems with this car. However, I also knew that if they wanted it, they could fix it and still make money.
And the Games Begin
I drove the Tahoe and met with the manager who then wrote a dollar figure on a piece of paper and handed it to me. I negotiated the cost down another $1800. Now this $1800 could have easily been part of a low-ball effort on my trade-in value, IF they knew I had a trade in.
I left the dealership and planned to get financing though my credit union the next day. However, when I called the manager at the dealership, suddenly he could not be found and I was told that the dealership could not honor the price I had negotiated.
I then called the salesman and told him, “If you want to play the Missing Man Game, fine. However, I will give you 30 minutes to confirm the price we had agreed on or I will buy from another dealership”. It was ironic how the manager was able to call me 10 minutes later and confirm the price.
Do not be a sucker. Do not let them waste your time, and don't them the treat you like a fool.
I received financing through the credit union in the form of a Purchase Order which essentially is an electronic way of moving money without handling any cash. I met with the Finance Manager the next day to complete the purchase of the 2000 Tahoe.
The Finance Manager asked if I was willing to trade in my Bonneville. Of course I was, I actually couldn’t wait to get rid of it because I was afraid to drive it anywhere. I told him that if he wanted to make a deal then I would accept $5,000 as trade-in value and not one penny less.
The benefit of having an approved Purchase Order took away their bargaining power on my trade in.
You must stand firm with these people and you have to know each game they will play at each break in the game. They offered me less but I stood my ground on the trade-in value. They accepted and it saved me $5,000 on the new loan.
The finance manager attempted to talk me into financing through the dealership by offering an upgrade on the Tahoe. I didn’t need any sexy upgrades and held my ground on financing through my credit union.
Ending the negotiation
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Before you sign any loan paperwork, run a CarFax Report. You need to know if your car has been in an accident, flood, or other type of chaos. You also need to know that the title is clear. Unreported accidents will not appear on the report, but this report will reveal how many different people have owned the car and in which states it has been registered.
The most important thing you can do when buying a new or used car is to do your home work. Know before you go. Know your credit score, know where you can get cheaper financing, know the games that sales people play, know what you can afford and never - ever negotiate monthly car payments. That is a suckers game, but I’ll write about that on another hub.
Financing your shiny ride
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Don't believe everything you read on the internet. If you see a car posted on a dealer site and it has everything you need, beware the Dealer Add-On, it may not be included on the website but will be posted on the car.
A dealer add-on is also known as a Supplemental Sticker. This sticker inflates the cost of the car.
A dealer add-on is also a profit center for the dealer. It may have features that you want on the car but the likely-hood is that the features are overpriced.
For example; splash guards, window tinting, a tailgate on a pickup and even alarm systems and an interior protection package. This "protection package" is basically Scotch Guard and you can do that yourself to protect the upholstery.
You can get the windows professionally tinted somewhere else for 50% of what a dealer will charge you.
Is it really Bumper to Bumper?
ARE CAR WARRANTIES A GOOD VALUE?
Within a few months of purchasing my Tahoe I found a bumper-to-bumper extended warranty posted online. It wasn't very expensive, and my truck was only a year old. I did have a couple of issues with the Tahoe.
In the first two years, the Throttle Body got clogged. The truck would flat out die as I approached a stop. So on three separate occasions, I took it to the dealer and dealt with the problem.
I received a "Cancellation Notice" from the warranty company in the third year. They were terminating contracts with 'older models', and mine was not even grandfathered into the program. I was ticked off, and there was nothing I could do about the situation. I couldn't even get my money refunded.
The extended warranty originally gave me some peace of mind about my purchase. However, once it was terminated - the loss was mine. I had considered it part of protecting the value of my vehicle, but it turned out to be worthless.
I have had the Chevy Tahoe for 13 years. It is now early 2014, and it still runs great and is very reliable. In fact, I have never owned a vehicle for this length of time, but I don't want car payments and am serious about service and maintenance.
Knowing some of the strategies that are designed to cause time delays and increase your payments can save you money before you sign on the dotted line. Make sure that you got what you bargained for before you leave the dealership, and don't pay a penny more.
© 2012 lifelovemystery