Here’s a list of some things that every car shopper should know before stepping foot into a dealership. If you’re interested in saving money on your next car, keep reading to find out seven car dealer tricks that many dishonest businesses try to pull.
- Low monthly payments benefit dealers instead of you. We all know that it’s important to pay attention to the overall cost of the car rather than solely focusing on the monthly payment. When you tell a dealer that you can’t afford a specific payment plan, they’ll simply increase the loan term instead of giving you a good deal on the car. The longer you take to pay off your car loan, the more likely you’ll pay more money than the car is worth.
- Dealers see a different credit score than you. Dealers see different credit reports and scores than you. Most dealers focus on the auto score version of the FICO formula to predict auto loan chances. The auto score version adds more weight to auto-loan specific information and emphasizes the history of past auto loans. This results in a higher auto score than standard FICO for a driver with positive auto history and a lower score for drivers with negative or no auto loan history.
- Dealers rarely mention if a car has been in an accident. It’s crucial to specifically ask whether or not a used car has been in an accident. Getting a CARFAX history report is also a good idea. You can greatly reduce the risk of a problem car when you review its history and make a smart decision based on its past.
- The sticker price isn’t the final price. The sticker price on most cars serves as a starting price for negotiations. Therefore, it’s important to research what a car is really worth before agreeing on a number. There are many websites out there such as TrueCar and Kelley Blue Book that will give you an estimate a car’s market value.
- Dealer ads are sometimes too good to be true. If you see a dealer ad that promotes a price that seems too low to be true, it probably is. Most of these prices are after an expensive down payment so it’s important to get the full details of a deal before committing.
- The best car deals aren’t in the showroom. Many car shoppers are now finding impressive deals by working with a middleman or interacting with dealers online instead of browsing a showroom and negotiating in-person. Dealers benefit from working with customers online because it’s usually quicker, easier, and hassle-free.
- Dealers aren’t only selling you a car. Dealers become profitable in other ways than simply selling cars. When you purchase a car from a certain dealership, they are also hoping that you return to them for service and parts as well. Mechanics typically charge less for repairs and maintenance procedures that at dealerships, but dealers sell themselves on their manufacturer specific knowledge.
Next time you decide to purchase a new (or used car), remember these seven car dealer tricks to avoid. You are responsible for getting a great deal on a car, so don’t let any car dealer stand in your way!
January 27, 2015 by Jamie Rettig