There is just no doubt about it. When you buy a car from a dealer you are entering into the arena where the car dealer is a gladiator and you are pretty much what he is slaying. This is his domain and he is slicing up deals on a regular basis. You are just there temporarily, without much to defend yourself. Below you will find the 5 ways to prepare yourself for the battle that is about to ensue. In this article I teach you how to buy a car from a dealer – like a pro.
As a professional car buyer I am in the dealer showrooms on a regular basis. I consistently see good people who fall smack dab into the dealer trap. People seem to know they are going to be taken for their money and even though they know this they still enter into the lion’s den.
When I see people with their heads in their hands I always think to myself “if they only knew the basic rules to dealing with the dealer”.
So here it is: The 5 Things You Should Know Before Buying Your Next Car
1/ Negotiating on the monthly payments
This is the most obvious sleight of hand that the dealers will use to conceal the true inflated price that you are paying for more info visit faragomotors. Monthly payments are a result of the negotiated price of the car. It follows that the better the price of the car the better your monthly payments will be. Dealers will keep trying to wrap the negotiation into the monthly payments saying things like “what payments are you comfortable with” and the like. Be tenacious and do not fall for it. First comes the negotiated price. Then comes everything else. By the way most dealers will settle on making a few hundred bucks from the deal. If you are buying a new car you should know what dealer invoice is. Go to True Car for the best pricing guidelines on the net.
If it is a used car you are buying then keep in mind that the dealer paid wholesale for the car and will be will eventually settle on making a couple hundred over that just to make a sale.
Lesson: Never negotiate monthly payments.
2/ Not having a backup plan for financing
Dealers are in the business of extracting as much money from you as they can. They have many strategies that they employ. Jacking up the financing rate that you pay on a loan is extremely common.
The other day I was making a purchase for a client who had a credit score of 725 (not bad but not great). As the paperwork got processed, the dealer threw a completed contract with 6.99% percentage rate on the table. Luckily I had advised my client that this would happen and we told the dealer that we were already preapproved at another bank for a much lower rate. We did not have to back up that statement. He just shredded the contract, changed the APR to 1.9% and without even blinking threw the new contract in front of us. This change took less than 1 minute and yet the savings were substantial for my client.
The key is that you will need to know your FICO score to be able to have some leverage in the deal. You can obtain your credit score absolutely free at Credit Karma. It is a wonderful service.
Lesson: Have a backup plan for financing in case the dealer plays you for a chump.
3/ Not knowing who to deal with at the dealership
Most people will waltz into a dealer without realizing that who you work with will make the biggest difference in the negotiations. The way to get the best deal is to know which person at the dealership will be able to close your contract without getting some upper management person to “approve” the deal. It is a complete waste of your time unless you get to the correct person right from the beginning. Otherwise you will be at the mercy of someone who has no authority to cut through the bullshit. The solution is to simply call beforehand and ask to speak to a manager. Once you speak to them make an appointment with that person. This is far better than showing up on the lot and getting hit up by some lot person who has the least tenure on the lot. Ask for a manager. Demand it.
Lesson: The right person will save you precious time and a boatload of money.
4/ Falling prey to the expensive add-ons
“Back-end profit”. That is the term given to the expensive items that you will be presented at the close of the deal when you are exhausted and not thinking too clearly. The person in charge of closing your deal, “The Financer”, will make you believe that you cannot live without these things. Remember this: There is nothing that they will offer that cannot be bought the very next day for substantially less. The most outrageously priced add-on is the extended warranty. I have witnessed people going to extremes haggling over the price of the car only to throw on way too much on an extended warranty. If you really want to have the extra peace of mind then remember, that the cost of the warranty is extremely negotiable.
