If you are planning on buying a new vehicle, there are several factors to consider. Price, safety, fuel economy, and tech features are just a few of the many areas consumers look at before making a purchase. It is also important to do your homework on the dealership that you choose. There are a variety of ways that dealerships attempt to make a profit at the expense of the customer. Being aware of these tactics can save you a hassle and a lot of cash.
- Inflating the price: Oftentimes, the prices that you see on the window of that brand new car are actually not the prices set by the manufacturer. They are sometimes referred to as “bumper stickers.” They are not located on the bumper, rather they are placed by the MSRP. These bumped up prices are for services that you many not need or want such as fabric treatment or VIN etching. Be sure to ask the dealer for the original invoice before “bumper sticker” costs are added.
- Customer service fees: If you take a look at your loan paperwork, you may notice a “customer service fee.” This is what dealerships charge to handle the loan papers, process the title, and issue tags. Even though this typically takes only about a half hour, you can be charged anywhere from $299 to $1,000. Try to get this figure reduced, especially if you financed your vehicle somewhere else.
- Higher interest rates: A sales manager will send your credit application to lenders to be approved. When that paperwork returns, dealerships can hike those rates depending on the state that you live in. The dealership gets to keep that extra money for themselves, and that cost can amount to thousands of dollars overtime. To avoid this scheme, finance beforehand with a bank or credit union.
Now that you have been educated on a few of the ways that car dealerships over charge customers, you can make an even more informed purchase and save money in the process. You don’t have to over pay for services that you don’t need anymore. Happy shopping!
November 30, 2013 by Jamie Rettig