Buying a car isn’t like shopping for clothes or shoes at the local department store. For most people, the process is more than just seeing the car they want, paying the money up front and driving away. Too much is at stake for that: too much money, too much of their lives. The process has its own system of subtle rules, which the automobile dealer is skilled in exploiting for his or her own gain. To get the best price on the car you want, to avoid being taken advantage of, you must become versed in these rules.
The first rule of buying a car is never admitting to dealer that you intend to buy. If you let the dealer know that you intend to pay, he or she will get to set the terms of the bargain. The dealer will most likely offer you a price somewhat lower than the suggested manufacturer’s retail price (MSRP). This price is much higher than the dealer would, in fact, be willing to go if he or she were induced to bargain. Plus, the dealer will then be in a position to sell you “extra” options for your car for more money.
Instead of admitting that you’re ready to buy, do some research first. Publications such as Consumer Reports list the “wholesale price” for virtually every major model of car – i.e. the cost that the dealership will most likely have paid for the car you intend to buy. When you go to the lot, don’t say that you’re ready to buy without offering a price. Then, give the dealer a price only slightly higher than the car’s “wholesale price,” and make him or her try to bargain with you.
The second rule is an addendum to the first. When you suggest to the dealer that initial low price that you’re supposedly thinking of paying, make sure you, indeed, research the wholesale price of the model you want ahead of time. Do not, on the contrary, ask the dealer for the “lowest price you’re willing to ask” for the model you want when you’re already on the lot.
The dealer is under no moral or legal obligation to actually offer you the lowest price he or she is willing to ask. Instead, he or she will probably make an elaborate display of researching their lowest price, just for you–perhaps by checking the books, or conferring with a superior. Then, you will be offered a not-so-low price. You’ll be made to feel so bad for having the dealer go to all that trouble for you, that you will be tempted to accept that price.
The third rule of buying a car is never to talk about monthly payments until you’ve settled on the price of the car. If you tell the dealer that you’re “willing” or “can afford” to pay a certain amount per month, you’ve essentially given him or her the go-ahead to set your car’s price for you. The dealer will most likely offer you a monthly payment plan within–or slightly higher–than your stated parameters lasting an x number of months, such that you’ll end up paying much more than you should be for the car in total.
Finally, if you intend to pay for the car up front, in full – don’t tell the dealer this. Why? Automobile dealers make a lot of their money from financing your purchase via auto loans and monthly payment plans. If you don’t tell the dealer that you’re going to pay for the car in full, you will be dangling this possibility of additional profits in front of him or her. By contrast, if the dealer knows he or she won’t be making additional money from selling you financing options, they will charge you more for the car itself.
|
