Smart Hacks for Dealing with a Car Dealer

Smart Hacks for Dealing with a Car Dealer

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Published by TOP4 Team

Haggling is virtually essential when you deal with a car dealer. No one wants to pay more than they really need to. Dealing with a car dealer scares a lot of first-time customers (when actually it need not). The key is doing your research on the vehicle of your choice before you go to a lot.

When you're dealing with dealers, it's hard to recall every fact you've researched. At least, always try to keep these key points in your mind:

• 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 persuade you into anything. Better yet, you should drop by on a day when the dealership is closed. You can roam around the lot and inspect the window stickers without any pressure. Take down notes on what you like, then return home and do some serious research.

• You'll never know the dealer's hand in a casino, but you can in a car dealership. One of the most important things you should know as a car buyer is the invoice price (the dealer's cost) of the car you want to buy. Fortunately, the internet makes getting that vital info easy. Only make sure to get the invoice price including all the options you want, not just the base price of the vehicle — the options have a dealer markup, too.

• Most dealerships have an online sales department that will get you a quote within two to three days. You're under no obligation to pay the quoted price, and it can be a potent bargaining chip with other dealerships.

• Print out the invoice price on the exact model you want with an itemised 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're 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. Aside from that, you can 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 car dealer can't match or beat those rates, tell him you'll finance the car another way.

• Dealerships love to push leasing because it's so profitable for them, but leasing is almost always a bad idea. In a lease, you're 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.

• Dealers have a profit margin commonly between 10% and 20%. Usually, this is the difference between the sticker price (the price they want you to pay) and the invoice price (the price they paid for the car).

• If you don't exactly see what you want on a new car lot, consider ordering it. This may take time, but at least you'll be paying for what you want and not for extras the salesperson talked you into.

• If you're sure of what you want and don't budge, a dealer may offer to let a car go cheaper if it's "almost" what you want. Have an idea in mind of what your second choice would be, and if the offer comes, you'll know whether to say yes or no and won't be confused. This is a good opportunity to pay a lot less and get something very close to what you wanted.

• Emotions can cost you money. A dealer can get you an enormous price on a vehicle if you reveal you have to have a certain vehicle. The point is when you're excited but not well researched, you'll almost always pay more.

• Don't be too embarrassed to walk out. Many car dealer tricks are designed to keep you in the showroom.

• Consider starting the process with a phone call. Getting some competitive prices is your first step, but there's no need to get involved with a salesman just for that. Don't accept a refusal to talk over the phone. A car dealer who demands your presence before offering any numbers isn't speaking your language.

• Get all the dealers you talk with to use the same figure. Use the factory invoice price as a basis, then each dealer must give you a number you can compare to other dealer prices (every dealer pays the same for the same car — the factory invoice price).

• Sometimes, dealers get extra factory incentives and may be able to sell below factory invoice price.

• Always negotiate a price first, not a monthly payment.

• Don't pay for things you don't have to pay for. Be prepared to pay extra for taxes, registration, licenses and destinations charges. Don't pay for delivery, promotion, handling, sales charges, floor charges or any other fancy words the car dealer uses to have you pay for something you don't have to pay for. Be prepared to turn down fancy extras like rust proofing and pin striping. They're expensive, and you don't need them.

Consider dealing with reputable car dealers in Australia.


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