Tips when Buying a Car…

#1 TIP

‘If I could get you in this car for $500 per month, would you take the car today?’ This is a common sales tactic – getting you to focus only on the monthly payment. All sorts of lucrative back end products can be bundled into a monthly payment so you need to check the breakdown.

It’s easy for a dealer to get you practically any monthly payment you want. For instance, they can extend the car loan term or low-ball you on your trade-in. This is one of the more common and profitable sales tactics.

What to do:  Always negotiate based on the actual price of the vehicle and always separate each part of the transaction into a separate negotiation. This includes your trade-in, and any other products or services you purchase.

#2 TIP

The salesperson finds out what your hot buttons are and exploits them. If you have a trade-in, and they know you want a certain price for it, they will offer you what you want, but at the same time will probably raise the price of the new car.

If they know you want a certain monthly payment, they’ll make sure you get that, but likely by extending the loan term so you end up paying more over the long-term.

What to do: Negotiate each portion of your car purchase separately. Shop your trade-in to multiple dealers, shop for an auto loan among multiple lenders, compare new car prices with multiple dealers. Don’t let a dealer bundle everything into one big deal.

#3 TIP

Mistakes in the paperwork can be common – errors can be on the agreed purchase price, loan terms, down payment, or anything.

What to do: Make sure you review all the numbers and items in the paperwork to ensure they match the numbers you agreed to. DO NOT sign anything until you are 100%, and if you are not, take the paperwork to a trusted source. If a dealer doesn’t let you take the paperwork away that should start to ring a little alarm bell.

#4 TIP

The ‘bundle’ is the most common sales tactic you will find in dealerships.

It’s a technique which can easily confuse car buyers by mixing the price of the car, down payment, trade-in value, and monthly payment into a single transaction.

What to do: This tactic only works on car shoppers who negotiate at a dealership. Simply use the phone/email negotiation method and handle each part of your transaction separately.

#5 TIP

Watch out when a salesperson who tries to switch you from a new car to a used car or vice-versa. It’s usually because that particular vehicle has been sitting on the lot for a while and likely comes with a bonus if they get rid of it.

What to do: On your contract make sure the VIN number is there, plus the build and compliance dates.