Online Finance Links | Buy Rate Scams | Dealer Tricks | Negotiating Tips | Dealer Holdback
Most of the paperwork is required by law and depending on the state you live in, can be quite overwhelming.
A form to allow the dealership to pay off the loan on your trade-in.
Depending on state law, you may have to sign a form stating that certain things have also been explained to you. (almost every state has these forms)
You will have to complete a credit application for the dealer to process if you're going to finance your deal through them. ( Free Credit Report )
Of course, also included is a contract as well as a report of sale to the state.
For a new car, either cash or credit or a combination of both. In either case, you owned the vehicle at the end of the payment period. Then along came the concept of leasing.
Leasing offers the consumer lower down payments and lower monthly payments, but at the end of the lease, you have the option of owning the vehicle or returning the vehicle to the dealer. You may have to pay a number of back end fees as well. The real trap in leasing is that leasing has such attractive down payment and monthly payment features, that you forget to negotiate for the best price. You just take the lease for the full retail value of the vehicle. Always, always, always and forever negotiate for the best price and then lease it at that price. When you lease there are a number of specific items, besides price, that should also be negotiated. Lease Options
One is mileage limits, if you drive a lot, negotiate for a higher allowable annual mileage maximum.
Number two is the vehicle's condition. Have the contract structured so that you don't get stuck with fix-up fees for a car you return in sub par condition.
Number three is to negotiate the value of the vehicle at the end of the lease upward so that the monthly payments are less.
1. The dealer will always push an extended warranty first. You may be able to get the warranty for as much as 50 percent off. Never pay full price for the extended warranty, just keep asking the dealer, and watch the price drop. Walk away from the whole deal if need be. Remember you can usually buy the warranty any time, even well after the sale.
2. Then they'll try to sell you insurance of one sort or another. Pass on this offer.
3. And of course they're going to be there to offer you a loan or financing or whatever. Ask about their best financing package before telling them that you have financing, and then compare the two. Ask them to beat your prearranged financing package because you want them, not the bank, to have the finance money. Take dealership financing only if you can get it for less than your own financing, and you expect to keep the car for the full term of the lease. See Buy Rate Scams
4. Anti-theft devices are routinely recommended by finance sales people. See our Automotive Security Section.
5.Car care packages, rust proofing, inside and outside car care packages, and audio packages are pushed as well, so analyze the need and cost of each package before you take it.
The final words of wisdom we would give is that anyone can buy a vehicle, save money, and come out with their confidence and self-respect intact if they study, practice, and apply the steps and procedures presented here.
One final thought: Use the preparation and negotiation strategies and tactics learned here, not only in buying a car, but also in buying a house, negotiating for new furniture or any significant purchase, for job negotiation, or even for business situations. You will be amazed at how well these techniques really work.
Who's Got the Advantage?
Here are some of the advantages that the automobile dealer has over you, the buyer:
Dealer Advantage - Professional Salespeople
Auto salespeople know their product line. They know the cars and available options. They know not only prices but also how the car is selling in the marketplace, and they know a million and one little relevant details.
Dealer Advantage - Auto Salespeople Sell Cars Every Day
Trust us, salespeople are trained to understand you, the buyer. They know what it takes to bring even a reluctant buyer and the car of their dreams together. They are experts in the art of making a car transaction happen. They do it every day, while you are there on a one shot deal.
Dealer Advantage - Salespeople Have The Right Personality For Selling Cars
Good car salespeople are not shrinking violets; they are smooth, aggressive people who can force or defuse a confrontation. They know how to impose their will on you, and they know how to control you so that you will give into their demands. In general, car salespeople have much stronger personalities than their customers.
Dealer Advantage - Professional Salespeople Are Single-Minded
Even though you need a new car, while you're at the dealership you may be torn by a lot of doubts. They want to sell you a car today at maximum profit (most salespeople are commissioned). They have goals set for them by the dealership, and they know exactly what they have to do to fulfill them.
Dealer Advantage - Salespeople Are On Their Home Ground
The internet allows you to overcome this dealer advantage. Companies such as CarsDirect & StoneAge will help you find a dealer in your area who is willing to negotiate with you over the phone - in the comfort of your own living room. This levels the playing field.
Dealer Advantage - Salespeople Have Reserve Troops
If a salesperson can't sell you a car because of a communication problem or personality clash between the two of you, there are other salespeople within the dealership eager to have a crack at you. If help is needed in convincing you to buy, so-called "closers" and, of course, "general managers" are available to wear you down.
Dealer Advantage - Salespeople Have Limited Authority
Claiming limited authority is an excellent tactic used extensively by great negotiators. No matter what salespeople say, they are not held to anything since they always have to check with their manager (called a "pass"). If they back away from a promise, it's because their big, bad, mean boss won't let them earn an honest living. On the other hand your authority and word is binding.
Dealer Advantage - The System Has Been Set Up In Favor Of The Dealer
The automobile industry has designed the sales system to work effectively and to separate you from the maximum amount of your money. This system must be very efficient, because all auto dealerships have been using the same system for decades. Every once in a while a new gimmick, like a "no dicker sticker" is introduced, these are, at best, great sales tools designed to lure you into the dealership.
The dealer may have the new vehicle of your dreams ready to sell to you so you may be tempted to accept a not-so- good deal.
You probably need a car right now. If you're like most people, you've waited until your current car is either ready for the junk yard, or is in need of costly repairs, before you decided to step into a showroom. It is tough to fight hard for a good price for your trade-in, if it isn't running.
It certainly seems like all the cards are stacked in favor of the dealer. But you, the buyer, have some major advantages, also! So cheer up. The reason you're reading this is to learn how to get your way at the dealer, and I'm going to show you how to recognize and apply your advantages. In fact, some of your advantages are so strong that dealers have set up a defensive system just to counter them. So let us list and explain your advantages as the buyer.
Advantage YOU - You're The Customer
Always remember that you're the customer and you're always right. You're the customer and it's your money, and without you there is no deal! Salespeople are trained to treat you, the customer, as king.
Advantage YOU - You Pick The Time And Place
While the car sellers are stuck in their showroom, waiting, you can come and go as you please. You can go to any dealer you wish, and you can go any time you want. This means that you can buy a car when it is convenient for you, when you are well rested and ready to buy, and when the time is right for buying. Good timing is very important in any negotiation. And, you can pick the precise time to go to the dealer that will enable you to get the best possible deal. This is really important.
The reason the last two or three days of the month are a good time to buy is because salespeople live and die by their monthly sales totals, which can be increased by your purchase just before the month closes. If possible, go to a dealer on a day when bad weather keeps other people away. Inclement weather is best because salespeople will make a deal, almost any deal, when the traffic is slow.
As for the best time of day to head for the dealer, always go late in the day - perhaps one or two hours before closing time, when the sales staff is tired and anxious to go home. This will still give you enough time to have your trade-in appraised, take a test drive and inspect your new car, and get down to serious negotiation, even if you have to keep some of the sales staff there after closing time, long after closing. At the end of the day, they are often worn out, want to get the deal over .......................fast.
Advantage YOU - Say Whatever You Want
Salespeople are limited to their sales pitch -- a well rehearsed, tried and tested script, which they deliver in a professional manner. But you have no such limitations. You can talk or act pretty much the way you want, and they have to put up with it. You can change your mind, you can make ridiculous statements, you can even be outrageous, and you can probably get away with it, all because you're the customer and it's your money.
Advantage YOU - Walk Away
You have another big edge in that only you can initiate a selling experience, and only you can terminate it. Salespeople can do neither. As long as you are willing to stay in the showroom and argue and negotiate, salespeople must also stay. They really can't walk out on you and leave you alone in the middle of the showroom, but you can get mad at any point and walk out and they can't stop you. Always remember that you're the customer and it's your money.
Advantage YOU - Time
Many people feel that as negotiations progress their position weakens. Not true. In fact, the longer the negotiations progress, the stronger your position actually gets. If you walk out in the early stages of a negotiation, the salesperson has not wasted much time on you and won't really regret that you're leaving. But as they put in more and more time and effort, they will become more concerned about losing a possible sale.
Your power as a buyer continues to increase right up to the point where you put your signature on the contract, and then it immediately decreases. This means that the longer you keep a salesperson tied up in negotiating and dealing with you, the more interested they become and the better deal you can drive.
Advantage YOU - Price
We're always surprised when people ask, "What is a fair amount of money for a dealership to make on an auto sale?" Should you care about the dealer profit? NO! Ask yourself this: How little can buy this vehicle for and get the car I really want? By limiting the dealership profit to a minimum, you can save a lot of money. Typically, 3% to 5% over invoice is fair.
Always Know Dealer Invoicing
Negotiate the price of the new car. (Negotiate Your Deal Tips)
Handle the extras you want to buy. (Do your homework)
Attend to the financing issues. (Dealer/Lender Buy Rate Scams)
Once you know their costs, you should find out what the dealer will take over cost for the new car you want. A rough rule of thumb is that if you can get your new car for between 3 percent and 5 percent over dealer's cost, you are doing very well.
Most important, you must learn negotiating skills, specifically, you want to learn how to negotiate for a car.
What to Bring to the Dealer
You must know what tactics will be used against you. (see Dealer Scams)
You must depend more on a rigid buying strategy that is designed to win in most cases.
You must stop and check your progress at various stages during the process to make sure things are favorable to YOU!
You must take advantage of dealer flaws. see Dealer Holdback | Buy Rate Scams | Dealer Scams
You must master negotiation techniques. see more negotiation tactics
Take a Friend!
You should always bring another person who can support and help you in what you have to do, especially if you are the weak, non-confrontational type. This person, in the business, is known as a "second baseman." Take along a stronger negotiator than yourself whether it be a spouse, a parent, whoever. Bring someone who can at least get in the way of the negotiations.
Homework
Bring the results of your automobile research, including dealer prices, with you. Keep your homework numbers fresh in your memory, but have a written copy of the calculations hidden away. Having your homework with you will give you the confidence and the positive attitude you need, and will free you of any apprehensions you may have in pursuing your course.
Pen & Paper
Use these tools since anything written down allows more leverage for you than anything verbal. Use our calculators.
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