10 Tips for Regret-Free Car Buying
Spending too much for anything is a downer — especially a car. Here's how to beat the dealer at his own game.
There's really no such thing as a professional car buyer, but there are 268,300 professional car salesmen in the United States, according to the Bureau of Labor Statistics. And while you may go into a dealership shopping for a new car only a half-dozen to a dozen times in your life, these guys are selling that many cars each week, so you can take it for granted that they know more than you about buying a car.
There's no doubt that most salesmen want to get you into a car that you'll be happy to own . It's in their interest to make you as comfortable as possible with the buying experience so that you'll recommend them to your friends, and then come back yourself when it's time to trade in for a new vehicle. But that doesn't mean they're not in the business for the money. It's a car salesman's job to make as much profit on each sale as he can get away with.
The car dealer has the home-field advantage, but with some preparation and savvy negotiating, you can place yourself in a much better bargaining position than the average rube off the street. Here we give you 10 tips for dealing with the savvy car salesman.
Tip 1. Browse with no intention of buying
The first time you go to a dealership, you shouldn't be looking to buy. Tell dealers that you're just looking and don't let them talk you into anything. Better yet, drop by on a day when the dealership is closed. You can roam around the lot and inspect the window stickers with no pressure whatsoever. Take notes on what you like, then return home and do some serious research.
Tip 2. Find out what the dealer paid for vehicle
You can't know the dealer's hand in a casino, but you can in a car dealership. "Knowledge is key," says Michael Royce, a former car salesman who now runs the website Beatthecarsalesman.com. "One of the most important pieces of knowledge a car buyer needs is the invoice price (the dealer's cost) of the car he wants to buy. Fortunately, the Internet makes getting that vital info easy."
Plenty of websites can give you the invoice price of any vehicle (you can search for invoice prices at MSN Autos here), so plan to negotiate up from there, not down from the sticker price. Make sure to get the invoice price that includes all the options you want, not just the base price of the vehicle — the options have a dealer markup, too.
Tip 3. Get an online price quote
In fact, get a few of them. Most dealerships have an online sales department that will get you a quote within two to three days. You can also use services such as Autobytel.com and PriceQuotes.com to cross-shop multiple dealers. You're under no obligation to pay the quoted price, and it can be a potent bargaining chip with other dealerships.
Tip 4. Get your paperwork in order
Print out the invoice price on the exact model you want with an itemized list of the options you're considering. Also, research any manufacturer incentives and rebates that apply to the car you're shopping for, and subtract those from the invoice price. If you are interested in financing, find out your credit score ahead of time; everyone is entitled to one free credit report each year from each of the three major credit reporting agencies. Also, shop a loan by researching the rates at competing banks and local credit unions. Write down all the numbers and bring all the documents to the dealership. If the dealer can't match or beat those rates, tell him you'll finance the car another way.
Tip 5. Forget about leasing
"Dealerships love to push leasing because it is so profitable for them, but leasing is almost always a bad idea," Royce says. "In a lease, you are simply renting the vehicle for a set period of time. Once that term expires, you must return the vehicle to the dealership with nothing to show for your years of payments."
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So buying a vehicle is something you only do a few times (I believe the article said 10-12) in your lifetime, yet there seems to be a new article about the evils of automotive salespeople and car dealerships at least once a month. In my experience, the markup between invoice and MSRP of a new vehicle is around 5-6%, yet the markup between what a jewelry store (for example) pays for its inventory and the price at which it sells the item to the customer can be 200-300% or more! Why do we not see articles once a month exposing the "evils" of jewelry stores?
I recently was in the market for a wedding band and had selected a tungsten carbide item for its durability and value. Upon pricing similar items at various jewelry and department stores, the price ranged anywhere from $180-300. I found the identical item on Amazon.com for less than $30 INCLUDING SHIPPING!! That is a markup of 600-1,000%!! Most of us only shop for big-ticket jewelry items a few times in our lives as well .. so where is the concern for this group of consumers?
The best advice a consumer can receive when making any purchase is to shop around, stay within your budget and pay cash as often as possible. When negotiating the purchase of any big-ticket item, remember to be reasonable and keep in mind that the stores/dealerships need to make a profit to pay their employees just like your employer does!!
This article is crap along with the many others that they write about the automotive industry. The easiest way to get the best deal and have the best car buying experience is to do your research and know what you want. Yes car salseman make money by selling you a vehicle but so do retailers, real estate agents, insurance agents and every other buisness that takes money for a service or product. There isnt a big secret to the automotive industry that requires a new article every month about how car salesman are trying to take tour money and screw you over. This is our livleyhood and we support our families on this so called deceptive carreer. If you do all of your reasearch before you come out theres not bad deal anywhere. The last thing is warrantys from dealerships arent bad especially on high end cars because if they cost alot to buy they cost alot to fix and if you would put one on a $500 compter why wouldnt you out one on a $25000 car.
Asking Price is a fair price if you expect great service after the sale. If you want to build a relationship with a dealer that can make car buying easy for you and your family then don't try and play these games that some dropout that left the business wants to exploit you with.
Dealers need to make a fair profit to treat everyone fair after the deal is done, They price aggressively to begin with in order to compete in the paper and on the internet with other dealers. Just remember when you go to buy a car that it is a human your dealing with that in almost all instances just wants to help you with your purchase.
If this guy understood the car business and how it affects the economy, maybe he wouldn't be trying to slit it's throat for his personal gain.
As a 12 year veteran car salesman myself I have to say for the most part this article was pretty accurate and helpful to the car buyer with the lone exception being where Royce states that, "In a lease, you are simply renting the vehicle for a set period of time. Once that term expires, you must return the vehicle to the dealership with nothing to show for your years of payments." this couldn't be farther from the truth and very bad advise and here's why.
When you lease a new vehicle you are not "renting the car" you are simply paying for the portion of the vehicle that you are using with a number of options available to you at the lease end. In leasing your payments are based on the vehicles depreciated value with the residual value being held in reserve with that residual being a guaranteed buyout number for the lease at lease end meaning the buyer knows exactly what they can buy that car for at lesse end if in fact that is one of the options they choose, the other real benefit to leasing a car is you will NEVER find yourself upside down again and in most cases your leased car has equity and can be used as a trade in toward your next lease.
Leasing a car simply put is the lowest possible cost available when purchasing a new vehicle and the biggest problem with the stigma that these programs have received through the years is uneducated sales people that do not truly know how to present it so people understand how leasing really works.