Auto dealers are always willing and able to sell you a new car, truck and SUV. Moving inventory is the key to every retail business. It doesn’t matter if it’s the end of the model year, end of the month or a Saturday. If they don’t sell cars, they won’t be there to service the second largest investment you’ll make besides purchasing your home. But keep in mind, they are in business to make a profit just like your nail technician, your dry cleaner, the super market and your doctor. Why do writers continually say it’s bad to make a profit if you’re a car dealer, but not the grocery store?
Do your homework
What is a fair price? A fair price is what you believe is the perceived value for what you are purchasing. That’s why we shop for sales, clip coupons and compare the item we’re shopping for on this “fad” called the internet. However, it’s because of the internet, that consumers have access to too much information. We used to call it the paralysis of analysis. Consumers gather so much information that they tend to over think the purchase of an automobile. It doesn’t help that we’re constantly bombarded with help tips that suggest it’s against all moral fiber to make a profit at the car dealership.
Do your research to ensure you are offered all manufacturer incentives. These include but are not limited to rebates for military service, recent college graduates, brand loyalty and money available for trading in a competitive make and model vehicle in addition to the rebates that everyone is entitled to just for purchasing your particular make and model vehicle. You can find these rebates on the manufactures (and most times) the dealer’s website.
Purchasing a vehicle is primarily an emotional decision and dealers recognize that. If you’re unsure of which vehicle you want to buy, test drive them all. Even if you know exactly what make, model and options you want, contact the internet department. It’s because of the afore mentioned internet, that dealers are constantly browsing their competitors web-sites and using complex software to ensure their internet pricing is competitive. They know you can access the manufacturers invoice and that you are shopping. Don’t drive all over town to save $200. You’ll waste more time and gas than what you’ll save. Let the email do the walking for you. Your best bet is the fastest dealer to respond to you and how they respect the opportunity to earn your business. Remember: It’s not always the lowest price, it’s how you’re treated before and after the sale that will keep you smiling! One final thing, they won’t lose your business over a couple of hundred dollars, but because of the internet, there isn’t much “wiggle room” at this stage of the sale.
You want fair and honest, and so do they
The biggest complaint with the car business is the negation process. Unfortunately, there are just as many deceitful dealerships and salesmen as honest ones. This process doesn’t have to age you prematurely. You expect and deserve honesty and to be treated fairly, so why are we told to be deceitful?
Don’t withhold that you have a trade. If the dealer is under the impression that they may not have to purchase your 1980 Pinto, he’ll be willing to make less of a profit. Remember, he has to resell that car at some point. But don’t hide the fact you have a trade. Most dealerships use a “four square” that discloses the cost of the vehicle (less rebates), actual market value of your trade (what they could sell your trade at the auction for), down payment amount (if any) and payments (or total purchase price). They will usually ask you to acknowledge these figures by a signature or initials.
If you’re going to pay cash, then most certainly negotiate the total price (including tax, title and licensing fees). But if you’re concerned about payments, then by all means ask questions if you are unsure, but why waste your time and that of a commissioned sales rep, if when you get to the finance office, you’re blown away with the payments. All that’s going to do is make you think you’re being deceived or taken advantage of. More dealerships than not today are all about customer satisfaction and full disclosure due to federal oversight and to avoid baseless lawsuits.
Know what you can afford
There are very few salesmen that have the authority to approve your offer to purchase. They do have to go to their managers. They will take all reasonable offers. The acceptance of your offer will depend of many, many factors. Some of these factors are, is this a popular model, what have they sold that day, have they met their commitment to the manufacture and of course, is it profitable to make the sale.
Let me ask you this? Would you go to work, perform your expected duties and not receive a paycheck? Of course not. But there are some people who think that a car dealer should lose money to sell them a car. Do you negotiate the price of gallon of milk? Would you ask your surgeon to perform an emergency appendectomy for free? How embarrassing would it be to not cut your hair because your hairdresser wants to feed her family that night? You wouldn’t. So why has it become necessary for so many people to suggest car dealers do what you wouldn’t.
Finance & Insurance (F&I or Business) Managers are not the enemy
The primary function of the F&I Manager is to ensure you drive home in the vehicle of your choice at the end of the day. It’s not to add to your anxiety and it’s most certainly not meant to separate you from your hard earned money.
The F&I Manager is there to verify the accuracy of everything you talked about on the sales floor. Is your personal information accurate (name, address etc) for titling and regulatory purposes? Is the sales price, down-payment what you agreed to? Did you agree to the actual cash value (ACV) of your trade? They are there to assist you in securing financing if desired. If you are paying cash or have arranged financing from your bank or credit union, they are there to ensure everything is in order so they are properly paid for your purchase.
F&I Managers will review the manufacturer’s warranty, it’s limitations and your responsibilities to avoid any confusion during a potential future claim for a defect in workmanship or materials (parts). Will they present you the opportunity to purchase optional (please notice the word optional…as they are) coverage’s, absolutely!!! It’s their job. Please respect that as their performance is evaluated on if they tell you about these coverage’s, not if you purchase them.
Think about this, what if you weren’t offered the opportunity to purchase a coverage that would eliminate your debt (loan) and you experienced a total loss? Are you aware that you are responsible for the balance of that loan regardless of the circumstances of the loss? Would you feel deceived once again if the F&I Manager never told you about this valuable coverage? I know I would.
Should you purchase these coverage’s? That depends on a multitude of factors which we’ll dive into in a future installment (so please stay tuned). But I will suggest this to you. If you are financing for an extended term (over 48 months), and/or you have financed negative equity from your trade-in (money owed exceeds cash value of your trade-in), or have little or no down-payment, be sure to buy Guaranteed Asset Protection (G.A.P). It’s the best money you’ll spend. (And look out for another article on why)
The manufacturer monitors Customer Satisfaction
A dealer is a franchised operator of the manufacturer. Ever manufacturer covets Customer Satisfaction and is constantly monitoring how a franchised dealer is performing to the other dealers in their region. If a dealer falls below an acceptable Customer Satisfaction Index (CSI) for a prolonged period of time, the dealer jeopardizes his franchise, his livelihood.
I mention this because, if a dealership consistently fails to meet the expectations of the manufacturer, be it because of under-performing sales, deceptive practices in sales, service, parts or finance or a number of other mitigating circumstances, they will lose their ability to represent that brand and be forced out of business. This happens every day.
Dealers work very hard to exceed the manufacturer’s expectations. They will go out of their way to make you happy. The last thing they want to happen is for you to receive that Customer Satisfaction Index (CSI) survey 6 weeks after your experience and ultimately read that you feel you have been misled or taken advantage of by a deceitful dealer. It’s simply bad business.
Most dealerships what you to have a pleasant and memorable car buying experience. They want you to return for an additional future purchase and refer others to their dealership.
Contrary to what some other authors what you to believe, the car dealership wants to earn your business, not scare you away!
Happy car shopping!!