BUYING A CAR IN 2015

BUYING A CAR IN 2017

(WITHOUT HAVING HEADACHES IN 2018)


Dealers

DEALERS

 

Before going to the various showrooms, do some research into areas of importance to you.  If power and performance are your priorities, there are various magazines like Car and Driver, Road and Track, and Automobile that wring out the various vehicles alone and in comparison testing.  Whether long term quality is a priority or not, buy a Consumer Reports Buying Guide and look through the reliability pages, where they tabulate what problems owners have had with their vehicles.  That will give you a very good idea of what the probabilities are of having problems with your vehicle.  Also, check out the pages where they talk about used cars to avoid and used cars to consider.  Not only can you help yourself with used cars, you can predict whether your new or used vehicle will depreciate quickly (either mechanically or financially).

 

You can also research internet buying services for options and colors.  Places like carsdirect.com and truecar.com allow you to compare features in each vehicle.  Edmunds.com will also allow you to price new vehicles and options.  Yahoo.com will allow you to compare performance numbers from different magazine tests.

 

Sooner or later, you will have to go sit in the vehicles and drive them to find out what they do for you.  Sorry.  You can buy your vehicle from the internet, but unless you do not care what you buy, you will still have to visit a dealership to sit in and/or drive a similar vehicle.  Problem is that we are all built differently.  Therefore we fit into different vehicles and react to different vehicles in different ways than other people.  Vehicle testers try to use different size people, but their tests usually reflect “average” size people with enthusiast preferences, whatever they might be.

 

There are many exceptions to what is written here about dealers, but not enough exceptions.  Most of the good exceptions are dealers in high priced vehicles such as Cadillac, Lexus, Jaguar, etc.  Too many dealers, especially those of high volume vehicles, train their sales people in psychological warfare, ie, high pressure.  To reiterate, not all dealers are this way, and it seems that it varies by dealership owner, not by vehicle brand.  You will know who is high pressure and who is not rather quickly by how comfortable you feel while dealing with the sales people.  The negative labels that the high pressure dealerships have are richly deserved, and when you go to shop for a vehicle, there are some rules that you should observe that are not permitted in polite society.  It is very unfortunate that vehicle dealers have spent so much effort to be so hated by the American public, but when you visit one of these places, you must not worry about whether you hurt someone’s feelings.  You must decide before going there what you want to accomplish, and you must stick to that purpose.  And when you have had enough, get up and leave.  Explanations are not necessary.

 

At the high pressure dealerships, the vehicle salesman’s main effort is to hold you there.  They are betting on your politeness, so DO NOT OBEY.  If you are ready to leave, stand up, and walk out.  Omit the gratuities.  A “goodbye” is not necessary.  That’s your control in the haggling process.  They cannot restrain you or prevent you in any way from leaving.  Polite or not, you have control of your money, and their drive is to separate you from it.  If you do not like a salesman, you have probably landed at one of these high pressure dealerships.  Go someplace else.  Again, do not worry about their feelings.  They are not worried about yours.

 

Never, never, never answer positively to the question, “What will it take for you to buy a car from me today?”  That’s the first sign of a high pressure dealership.  Buying a vehicle is a lot of money to spend, and you need to take the time to shop and see the differences between vehicles.  Therefore, when the first salesman asks that idiotic question, the answer is, “I will not buy today.  I am here to see the vehicles.”  If they get that answer two or three times, they will get the idea.

 

The high pressure salesman will try to corner you at the vehicle that you are interested in and then try to get an offer from you, an obligation as far as he is concerned.  Many times, they will play “what if” until you start to answer out of frustration.  Even if he says they will take whatever ridiculous offer you might throw at him, it is still your power to say no.  If you have not signed on the line, you are not obligated.  You can leave whenever you feel like it.  Forget politeness.  There is a theme here somewhere.

 

Do not give out your personal information until you are actually buying a vehicle.  Do not sign up for anything.  Do not give them your telephone number, or your drivers license, or your social security number until after the price is agreed upon.  They would use that information to run a credit check on you to ascertain how much money you have and what they can likely get from you.  If they require that they hold your drivers license or the keys to your car to allow you to test drive a vehicle, go to another dealership.

 

One more thing.  If you give your car keys to anyone at these high pressure dealerships, you can bet that they will test drive your car, whether you say they can or not.  A dealer’s favorite ploy is to ask for your key so that they can get some sort of information off of a plaque on the door jamb of your vehicle.  They then drive your car.  Then, to hold you at the dealership for as long as possible, they will play like somebody else has your keys, and that person will be back “in a few minutes”.

 

Because of fear of vehicle dealerships, internet sales have soared.  Buying from the internet is becoming a popular way to purchase because there is no haggling in theory.   The reason for “in theory” is because there are two types of internet buying.  The first is from a buying service.  They have set prices, which can be beat at the dealership if you want to go through the haggling game, but they are lower prices than you would get as a first offer from the dealer.  The second way to buy is where the dealers have internet sales.  This turns out to be just another vehicle salesman getting his leads from the internet.  You may think you are making an internet sale when your information is fed to a vehicle salesman, and he calls you at home.  Once again, forget politeness.  When you have had enough, hang up.

 

Okay, what are you looking for at a dealership?  Style, color, a brochure showing what the vehicles come with and what the options are, comfort, and how everything works.  If you want to take a test drive, try to get the salesman to be quiet so that you can listen to and feel the vehicle.  Do test drive the vehicle that you are considering, and not just around the block.  Drive it at various speeds and road conditions.  For the first mile or so, you will be just getting used to the view.  It takes a while to know what you like and dislike about the vehicle.  And do not assume that the next larger vehicle will only be a larger version of the same vehicle.  It could be nicer or not as nice, and it could be more or less expensive, but will most certainly have a completely different set of characteristics and attributes.

 

 

 

A better way to test drive a vehicle is to rent one for a day.  There are many rental companies, and they all buy different vehicles.  You can probably find the one you are considering for rent somewhere.  Some big city rental agencies even have Ferraris and Mercedes for rent.  After you have rented a vehicle for a day, you can usually figure out whether you will like it or not for the long term.

 

Just because what you want is not on the lot, that is not a reason to think it is not offered by the manufacturer.  The dealer buys the cars for his lot, so it is to his advantage to buy and stock those vehicles that have the widest appeal (ie, the best chance of selling) and the greatest profit margins.  If you do not see what you want, check the manufacturer’s brochure.  It might be offered, and since most dealers have access to what is available at other dealers, the car you want might be available at another dealership.  You can either go to the other dealer or get your dealer to get the vehicle for you.  If other dealers do not have the car with the combination of options that you want, you can order what you want from any dealer.

 

There are web sites, such as Edmunds.com, which can tell you what vehicles cost the dealer in theory, but they do not tell you what prices you can get from the dealer at any one point in time.  They can only give an average.  There are some credit unions that have books that tell what the sale prices from new car dealers have been, but the best sources of what the dealers offer are their advertizements in the newspaper, and the prices vary by the time of the year, monthly sales volume, manufacturer’s promotions, etc.  You can call the dealer with his ad in your hand and ask what price he will honor for similar vehicles on his lot, and if the salesman will not tell you, then the ad is a come-on, and the price is for one or two vehicles which have either been sold last week or never existed.  And when you are reading the dealer’s ad, read the fine print.  If the monthly payment in the ad is very low, it is probably either a lease with very limited miles or a sale with a big balloon payment (which means that you may pay $200 per month for two years, and then a $15,000 payment is due).

 

Other things about dealers:

 

Text Box: WE'LL BEAT ANY DEAL!!
must be in writing
Matching other dealers’ prices is a way for them to get you in.  Do not fall for it.  The price to be matched has to be written, and the dealers do not write the price until you are going to sign the papers, so there is usually nothing that you can take to other dealers to match prices with other than newspaper ads.

 

If you decide to buy from a dealer, understand that the price shown on the window sticker is usually negotiable.  Even those dealerships with policies of selling at list (window sticker) price can negotiate the value of your trade in vehicle.  How much their price is negotiable varies with several factors, including, but not limited to:

 

·         Time of year – Prices drop just before the new year (January) and just after the models for the next year are introduced (around October normally)

 

·         Time of the month – Prices drop towards the end of the month if the sales quotas have not been met

 

·         Age of the model – After a new body style or model has been introduced, the dealer may sell for higher than window sticker price, and the replaced body style will sell at a severe discount.

 

·         Color – Colors that are more popular will command a higher price even though they do not cost any more to manufacture.

 

·         Competition’s prices – If another dealership close by is selling competing cars at discounted prices, all dealerships will compete around those prices

 

·         Type of model – Some models, especially larger cars and SUVs are priced far above the cost to manufacture them.  As long as they sell, the prices will remain within 10% or so of the window sticker price, but if the market demand slides a little, the prices for these vehicles will drop like rocks.

 

With this in mind, do not look up a car on Edmunds.com, find the invoice cost, add a couple hundred dollars to it (or get their "True Market Value"), and expect to have a price that a dealer will sell for.  You could be off high or low.  The invoice is not necessarily what the dealer pays for the car, and if the supply for a model is low, the dealer may want more than the list price for that model or color.

 

Your best tool in the negotiating process is your presence.  If you don’t get the price you want, get up and leave.  If the dealer thinks you are serious about buying if you get your price, he will call you.

 

Do not be surprised if they play a variation of “Good Cop, Bad Cop.”  One person may try to intimidate you, and when that does not work, another person will apologize profusely, and try another strategy.  Those dealerships should be left permanently.

 

If you can find the fleet manager at the dealership, you have the best chance to get a decent deal without a lot of haggling.  He does not have to run back and forth between you and the sales manager to settle on a price.

 

When you start the business of signing papers, they will send in a business manager, whose purpose is to get you to buy other things like extended warranties, service agreements, and financing.  Sometimes they have better financing than banks or credit unions, but the extended warranties and service agreements are usually not a good idea (especially on high reliability vehicles) since they are designed to get extra profit for the dealer.

 

Since the lines have blurred on what vehicle can tow what size trailer, the best thing to do to ensure that the vehicle you buy is rated for the job is to find the manufacturer’s trailer towing guide.  The dealer will probably have separate brochures on this and/or a section in their sales book, which most dealers will happily show you.  If you have specific questions on technical specifications for a vehicle, read the manufacturer’s literature.  The vehicle salesman is not the definitive source of information and is quite often wrong. 

 

WARNING:  Trailers:  Suppose that the salesman tells you that a vehicle will tow a 1000 lb trailer.  You buy the vehicle, tow a 1000 lb trailer, and the vehicle’s transmission burns up.  If the manufacturer’s literature does not say that the vehicle (with the options you have chosen) is rated for that size trailer, you pay for the repair, and you lose your warranty, even if the salesman admits to saying what he said.

 

WARNING:  Premium gas vehicles:  Many vehicles today are designed to run on premium gas (91+ octane).  Many dealers are in the habit of telling customers that these vehicles use regular gas.  While some vehicles have the ability to adapt to regular gas, if the owner's manual says that the vehicle “requires” 91 octane or better, and you have an engine problem with regular or mid grade gas (85 to 89 octane) in the tank, there is a good possibility that the factory will void the warranty, ie, you lose.

 

This section has cast dealers in a negative light.  Too many nice people are being brow beaten by pushy vehicle sales people, and it must stop if dealers are to survive in the long run as sales organizations.

 

There are some notable exceptions to these rules, as discussed earlier, but they are way too far apart.  The hope is that some day, the manufacturers get rid of price haggling by setting window sticker prices as the real selling prices like Saturn has started, but until that happens, internet sales are sure to rise.

 

If you are able to find a good dealership with a helpful service department that is close to your normal beaten track, it might be advisable to get your vehicle from there.  You might be able to save a couple hundred dollars on your sale by going across town to another dealership, but a good relationship with a close dealership will help to keep your vehicle up and running correctly (as long as they do not engage in selling unneeded service).