You can get all sorts of car buying tips and advice from people, but the best type is from the horse’s mouth, or in this case, a car dealer. This anonymous source wants to remain unknown for obvious reasons.
But the pointers he or she gives is invaluable to car shoppers and may help to understand the process and motives of car salespeople. Some tips are common sense, but others aren’t so obvious.
One tip is to avoid getting your financing at the car dealership because no matter what sort of deal you have hammered out, the savings can be cancelled by raising the interest rate of your payments.
They Giveth and Taketh AwayA favorite ploy, according the Mr./Ms. Anonymous, is that salespeople expect customers to come in trying to talk down the price of a car. And in order to make customers feel as if they’re winning, they will purposely knock off $1,000 or so.
But when they do this, some unscrupulous businesses will actually take the savings back by selling you extended warranties, extra accessories, or other add-ons to make back the discount. And of course, the favorite one is to up the interest rate on your loan.
Don’t Be A JerkCar salespeople are often accused of being jerks, but in their eyes, customers can be awfully rude too, to put it mildly. It’s a good bit of advice to be respectful of the salespeople, and for good reason too.
If you come in with an attitude, it’s very unlikely that they’ll try to go the extra mile to help you locate the car you want. After all, you wouldn’t want to be disrespected either, would you?
They Still Make MoneyIf you make a deal that is equal to the invoice of the car dealer, or what the business paid to the car manufacturer for the car, the car salesperson and car dealer are still making money.
On a sale that is less than invoice, the car dealer pays the salesperson between $100 and $200. And although the dealer’s invoice may say it paid $20,000 for the car, for instance, there is money that is paid back (holdbacks) to the dealer that isn’t recorded on the invoice.
These amounts can total up to a good chunk of money for the car dealer, and that is why some car advertisements can claim that they are selling below dealer’s invoice; they’re getting “kickbacks” from the car maker.
Pay In Cash?One prime thing a car dealer wants is to sign you up for financing of the vehicle. This is because they’ll make money of the interest on the loan. If you already have the money to pay in full, it’s a good idea not to mention this during negotiations until you get the price you want.
If they know ahead of time you won’t be financing with them, you’ve just taken some profits out of their hands, and as a result, the car dealer will be less likely to offer you a good price on the car.
Source:
Popular Mechanics