Sage Advice for Buying a Car


The following article was written by someone else whose information I lost long ago.

How to Buy a Car from a Dealership the Right Way

Not every dealership is guilty of these tricks but be aware that some unscrupulous people will do everything they can to achieve their goal.

Juggling the Four-Square

This isn’t really a trick, but awareness here is important for a buyer. When you sit down to negotiate, the salesman will pull out a “four-square” worksheet on which to work out the terms of the deal. In the four quadrants of the sheet the salesman will record purchase price, down payment, monthly payments, and trade-in value. He will fill in the sheet as you talk, working the deal like a shell game—if he thinks you are preoccupied with getting a fair deal on your trade in, he might give you a good price for that and then nudge your new-car purchase price north. Take it slow, focus on one item at a time, and be sure you are comfortable with each individual aspect of your purchase.

Profiting from Rebates

Rebates bring a lot of customers into a showroom, but the discounts can hide several tricks dealers employ to suck a few bucks from a buyer. First, don’t let a salesman tell you that you are getting a good deal because of a rebate; rebates come from the manufacturer and usually apply regardless of the price you negotiate with the individual dealer. Negotiate as if there are no rebates. Second, make sure the rebates are deducted from the purchase price. If you allow the dealer to mail you a check after the sale, you end up paying taxes and interest on the rebate. And never let an incentive like a low APR or a rebate rush you into a purchase you aren’t ready to make. If there’s an incentive on a car today, odds are there will be incentives on it again. Salesmen will often tell you there are strings attached to incentives, such as that you have to buy a certain trim, engine, or option package in order to qualify. This is not always true. Do your homework.

Inflating Payments

Talking monthly payments at the car dealership can be as dangerous as saying “bomb” at the airport. A salesman asks how much you are willing to pay each month, and you throw out a number—say, $450 a month. He asks how much more you could afford—just getting a feel for you. You tack on another 50 bucks. In your mind, you were just theorizing, but to the salesman, you just committed to a $500 minimum monthly payment. Instead, when a salesman asks how much you can pay each month, tell him you will not discuss monthly payments and only want to talk purchase price; you’ll decide on monthly payments after you’ve settled on a fair price.

Fees and Extras

Delivery charges, titling fees, and a few other closing costs are inevitable extras associated with buying a new car. But aside from a few essential add-ons, most fees or extra-cost items are either inflated or altogether unnecessary. Negotiate fees down, or outright refuse to pay them. And deny any extras offered by the finance and insurance manager. Basically, if it’s anything he offers you after you’ve negotiated your sales price, you don’t need it and you shouldn’t pay for it. Particularly egregious are paint protection and fabric guard, essentially wax and Scotch Guard dealerships often charge hundreds of dollars for.

Interest-Rate Bumping

You should always shop for your own financing before you head to the dealer. Maybe you’ll get a better rate; maybe you’ll just get a better idea of what rate you qualify for so you can police the finance manager. It is not uncommon for the dealer to secure financing for you at one APR but offer you a rate one percentage point higher—and then pocket the difference.

Altering the Bill of Sale

Never sign a bill of sale with blanks or terms that are “subject to bank approval” or have similar wording. Some dealerships will let a customer sign such a document and release the new car to its happy owner, only to call the buyer back a few days later to say that the loan fell through and they need to come back in to sign some new paperwork, which just happens to cost the buyer more than the negotiated price. Never drive your car off a lot until all the paperwork is filled out completely.

The following four are the most underhanded and childish dealer tricks. Fortunately, they don’t happen very often anymore. But if a dealer pulls any of these stunts on you, they don’t deserve your business. Walk away.

Ransoming Your Check

The sales manager gets cast as the villain in a good cop/bad cop routine some salesmen play with buyers. You’ll negotiate a price, and the salesman will leave to get approval from his sales manager, painting the salesman as your ally and the manager as a common enemy. Be wary if the salesman asks for a check to prove to the manager you are serious. Sometimes, your offer will be rejected, but your check won’t be returned right away—it’s been “misplaced” or some similar nonsense. Now they’ve got your money, and you feel pressured to concede to their terms. Remember that you can always walk away and cancel the check later.

Eavesdropping

While it’s a good idea to bring a friend or family member shopping with you—someone else to watch the deal, question the terms, and help keep your emotions in check—this opens additional avenues for nefarious dealers to use the wingman against the buyer. When the salesman leaves the cube, people drop their guard and feel comfortable discussing the aspects of the deal they wouldn’t mention in front of the salesman. With just a couple subtle pokes at their phones, salespeople can leave the intercom open with the sales manager’s office, where they will go not to seek approval on your terms, but to eavesdrop on your conversation, harvesting information to use against the customer. There are even stories of salespeople hiding baby monitors in their offices. When the salesman leaves to talk to the sales manager, that’s your cue to leave and get a cup of coffee.

Lying About Your Credit Score

In addition to shopping around for financing, you should take a look at your credit report and strongly consider spending the few bucks to learn your credit score before you go to a dealership. Many of the best offers to be had on new cars are contingent on the buyer having qualifying credit, and dealers occasionally have been known to lie to customers about their credit scores and the financing for which they qualify.

Misplacing Trade-In Keys

If you are thinking of trading in your old car when you buy a new one, someone may borrow your keys to evaluate your ride. If negotiations stall and you try to leave, you might find that they’ve been “misplaced” in order to prevent you from leaving and entice you to make a deal you aren’t comfortable with. If you bring two sets of keys with you, this won’t be a problem.

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