If you are like most people today, buying a car
is not on your list of “Top ten most enjoyable experiences.” The
negative connotation that the automotive industry carries is directly
related to how business is conducted. The back and forth games played
by the salesperson and manager are designed to maximize dealer profits,
ultimately leaving the customer browbeaten and disgusted. However, the
dealer knows that the reason the customer is in front of them is
because they NEED a car. The dealer has the advantage. However, going
into the dealership as an informed and prepared consumer turns the
tables on them. Here is an abbreviated guide to saving yourself
THOUSANDS on your next car.
1. Understand the Game. Know that when stepping foot inside a
dealership, you have just entered what they call their “control zone.”
The entire sales process is specifically calculated to maximize the
amount of money you are going to spend. Know that you will not be able
to march into a dealership and demand numbers; most dealerships require
that you test drive the vehicle before numbers are even considered.
Know that when numbers are discussed, the first and second set of
numbers that the salesperson comes back with, are NOT the best number.
Know that it is a game!!!
2. Research the Vehicle. Go into the dealership with an idea of
what the car costs the dealership. Know that you will not pay this
number. Everyone is entitled to make a profit. What you should do at
this point is decide what you feel is a fair mark-up, and negotiate
3. Credit vs. APR. The APR you will pay on your next vehicle, or in
the case of leasing: the money factor, is directly proportional to your
credit score. The banks and other lending institutions calculate their
risk based on your credit score. Generally, a person with good credit
is less of a risk, and will therefore will have a lower APR/ monthly
payment, and vice versa. Go into the dealership knowing what finance
rates are available. You can check today’s real time best rates here.
4. Trade Value. Go into the dealership with an idea of what your trade
is worth. Kelly Blue Book is one of the leading sources for this
information. However, I caution you in taking what KBB quotes as gold.
KBB does not sell cars and is not used by the automotive industry. The
dealerships use the values that the cars are selling for at auction. If
the dealer is unable to sell the car on their lot, they take them to
auction. Therefore, dealers are for the most part, unwilling to pay
more than the auction prices. KBB is generally anywhere from
$1500-$2500 higher than the auction pricing.
5. Consult Professional Car Buyers. Yes, they do exist. They are
known as Auto Brokers. Generally retired auto salesman, brokers are
able to bypass all of the legwork that was described previously. They
have excellent knowledge of the GAME that is played, but have decided
to play on the other team. With the customers interests in mind, they
able to get down the bottom line price and cut out the hassles involved
in the process. We recommend Negotiation Free Inc. because they are
like no other broker. They do not charge the customer for their
services. They are 100% compensated out of advertising expenses that
the dealerships allocate for every car. Because it costs the dealership
nothing to sell the car, they are able to use the advertising fund to
compensate Negotiation Free.
Purchasing your next vehicle should not be the grueling the process
that you have come to understand. By preparing yourself, and enlisting
the knowledge of professionals, the purchase of your next car is going
to be not only an exciting but enjoyable process.
About The Author
Ben Hefflinger is Vice president of http://negotiationfree.com and carries over ten years in the auto industry.