Car shopping 101: Avoid the upsell
Tips to navigate your way through a vehicle purchase without paying more than you should.
The Internet has done much to empower automotive consumers. You can compare similar vehicles and options and get manufacturer and invoice pricing online before you ever enter a showroom. But those clicks can be out the window when you hit the bricks of a dealer lot, due to vehicle availability. The dealer may have the model you're looking for, but not in the configuration you want.
So the dealer has your new ride in stock, but it is has different options. Floor mats — no, sorry, can't sell it without the floor mats. Different paint, pearlescent, costs a bit more. Turbo engine — you're definitely going to want that. Plus the 18-inch alloy wheels instead of the standard 16-inch steel ones. There are also heated seats and mirrors, and a navigation system — it's all part of a package, can't order that stuff a la carte.
This is a high-demand car, the dealer says. He can check around with other nearby dealerships, but to get it the way you want it will take a few weeks, and if it were special ordered, it may take months. He can probably give you a deal, though — just give him a minute to consult with his manager.
All it takes is a whiff of interest on your part — "hmm, the nav system does look slick, and I've always wanted alloy wheels" — and you're off on the upsell express. Factory options, dealer add-ons, mysterious fees, extended warranties, paint and glass protection -suddenly, the $20,000 car you were expecting has $8,000 to $10,000 in extras tacked on. Your head is spinning: What just happened?
In the cutthroat, low-margin automotive market, the upsell is how many dealers make their profit. "The amount of profit that dealerships earn for each vehicle sold is often smaller than many people realize," says Michael Royce, a former car salesman who now runs the site beatthecarsalesman.com. "To increase their profits, dealerships have to make more money one way or another. Some dealerships realize this extra profit from their service departments. But many dealers try to earn that profit by upselling their car buyers with extras and upgrades."
But it's worth remembering that you are the customer, and you shouldn't be pressured to pay for items you did not want in the first place. Here are the most common upsell tactics dealers try, and the best way to make sure you only get what you came for.
Tactic 1: The package deal
This is less of a dealer tactic than a car industry tactic. For years, automakers lumped together popular options into packages (cold-weather package, technology package, sport package) or discrete model lines (LX, SX, EX, MXLPLX) to streamline production and reduce inventory. But those packages also mean that it's nearly impossible to get the better stereo without getting a navigation system, or to get a moonroof without the 8-way adjustable leather seats. It also serves to hide the true cost of individual components and jacks up the price of a base trim by several thousand dollars at a time.
Fight back: There's not much you can do to tease out packaged options into a la carte selections, but if you do your research online, you can walk into the dealer with a firm grasp of exactly what model and option package you like, and then insist upon it. "If they try to talk you into buying an upgraded vehicle with equipment and options you don't want, stand firm," Royce says. "Don't let them talk you into anything you don't want or need."
Royce suggests shopping at the largest dealership in your area, since it should have the largest selection and the highest likelihood of having the combination of options you want. Or better yet, call the dealership to see if it has the model before you show up. Never email them unless you want a new friend sending you messages every week. Finally, pay attention to the difference between factory options — typically such things as moonroofs, leather seats, rear backup cameras and the like — and dealer- or port-installed options, such as spoilers, floor mats and roof racks. The latter are more likely to be sold a la carte. If the dealer tries to inflate the price by insisting dealer options are part of a factory package, call his bluff.
Tactic 2: Monthly payment shenanigans
Rather than negotiating on price, dealers would always rather talk about how to fit a vehicle into your monthly budget. That's because they have an enormous amount of latitude when it comes to stretching out the length of loans, and plenty of incentive to do so, because the longer the loan, the more interest you pay. This is essentially a pure financial upsell, and often it's a way to persuade you to buy more car than you need.
Fight back: Always negotiate the price of the car before you talk about trade-ins or financing. Use MSN Autos to determine the dealer price of the exact model of vehicle you want with options, compared with the manufacturer's suggested retail price. With most cars, your target negotiating price should be halfway between the two numbers. Don't even discuss how the vehicle is going to be paid for until you've settled on a price that you're comfortable with.
Must-See on MSN
RULE#2... KNOW YOUR MATH....$350 x72 DOES NOT EQUAL GETTING INTO A $30K VEHICLE(NOT INCL TAX,LIC AND A %RATE!) UNLESS U HAVE $$$DOWN.
RULE #3 DON'T WASTE YOUR TIME AND THE DEALERSHIPS TIME ON WHO IS GIVING ME THE BEST DEAL AND DRIVING TO EVERY DEALERSHIP IN THE STATE!..DO YOUR DUE DILIGENCE ONLINE OR PHONE..YOU OWE IT TO YOURSELF AND THEIRS...EVERYONE'S TIME IS PRECIOUS.
RULE#4...ASK QUESTIONS LIKE; DOES IT INCLUDE ANY ADDED ACCESSORIES ON THE VEHICLE OR IF YOU WANT SERVICE OR MAINT. CONTRACTS.. ASK FOR IT.
RULE#5..IF YOU FEEL YOU'RE NOT RECEIVING GOOD C/S FROM YOUR DEALERSHIP...LET THEM KNOW...YOU CAN ALWAYS LEAVE OR GO ELSEWHERE.
BUYING A VEHICLE SHOULD NOT BE DIFFICULT,...AS FOR SALESMAN BEING "SNAKES OR LIARS...COME ON FOLKS, WE GOT POLITICIANS, LAWYERS, PRESIDENTS,...ETC..WE GOT THEM IN EVERY LINE OF WORK AND OCCUPATION...SO LETS QUIT NAME CALLING AND CASTING STONES...WE LIE TO THEM TOO.." ITS NOT FOR ME...I GOTTA CHECK W MY WIFE, JUST LOOKING, NOT REALLY IN THE MARKET...HAVE TO THINK ABOUT IT.....ETC...SOUND FAMILIAR? IF THE DEAL IS GOOD FOR YOU...BUY IT. IF NOT, MAYBE THINK ABOUT MAYBE YOU DON'T NEED A MOON ROOF OR LEATHER...WE ALL CAN LIVE WITHOUT IT.
called "bait and switch". The invoice says one thing, then in the middle of the deal extra charges are piled on. Say what you mean and mean what you say.
Tell me the bottom line -up front- I'll take it or leave.
I realize it's tough for a salesman to close a deal with a customer armed with dealer-cost and fee figures. It's the way the world works. Suck it up and deal with it. Everybody is fighting to preserve their hard earned income. If you think a buyer cares about how many hours you work and how little money you make, you have some growing up to do. Join the club. We all have to deal with that.
Is it internet sweeps week again? Must be cuz it's time to drag out the ol' How to Beat the Evil Car Salesman article. Usually, this is just annoying, but this article is flat out wrong in so many places. For one, it infers that a car dealership can play around with the local tax rates - pure fiction. I especially like how no dealership should charge for transferring a vehicle from another lot - no matter how much it actually costs. But primarily, this idea that the car dealership is somehow responsible for the way that cars are equipped is just downright ludicrous. If you don't want the XLT, then don't buy it - but don't whine that you want the XL for the same price. The dealer has to purchase each car from the manufacturer (not in cash, but by financing) and pay interest on that car (that's called flooring,by the way) until it's sold. Holdback is an arrangement buy which the manufacturer anticipates and reimburses a certain amount of flooring costs. And to infer that the dealership can just willy-nilly adjust the term of the contract is another lie. The lending institutions, not the dealerships set the loan parameters. Yes it's true, there is usually a modest mark up in a financing contract (or a $100 reward to the dealer with factory set interest rates such as 0%). This is what the lenders (or manufacturers) pay to the dealers for doing the financing work. By the way - don't ever, and I mean EVER, ask for a cash discount. A dealership is always looking at less profit in a cash deal. NO Dealer wants you to pay cash and when you ask for a cash discount it just shows that you really have no idea how the car business works. It just ticks everyone off and it tips you off as an arrogant rube. No, there is no cash discount. In fact, we'll probably charge you a bit more if we can just so we can stay in business.
In summary, this may be the most misleading "beat the dealer" article I have ever read. Car Salesman are making far, far less money than you think and most of us aren't trying to rip anyone off. Maybe MSN could do an article on THAT.