Patrick is a former used car salesman who grew a conscience. He has three tips to share with us:
1. Buy in December
2. Bring your own financing
3. Watch out for the squeeze play.
Learn more, inside…
Buy In December
First off, if you want the best deal on a car, everyone knows to wait until the dealership and salesmen are desperate – Guess what? That means December. No one is buying cars because most folks are focused on buying gifts for the family. Everyone from the General Manager to the poor bastards taking “ups” (walk up customers, usually the worst chance of a sale) is feeling the pressure to produce. Now is your time to extract your best deal. Go for everything.. lower interest rate, pricing concessions, free detailing, window tint. Whatever you can think of.
Bring Your Own Financing
It’s very simple. Do you have a saving or checking account? Go to your financial institution and get “pre-qualified” . Your bank / Credit Union will give you a realistic idea of how much car you can afford to buy. You may not like what you hear, but you will be better off in the long run (witness the current meltdown over the sub-prime mortgage market) If you are pre-approved, you can shop for a vehicle in a realistic price range, and avoid the temptation of the buying too much car when the dealer flashes a “low payment” at you.
Watch Out For The Squeeze
This one absolutely broke my heart. It’s been 10 years since it happened, and I remember it as clear as day. A hard working couple, “salt of the earth” type came down to Phoenix from the Grand Canyon (at least three hour trip) with the ancient station wagon they wanted to trade in for a newer car. They worked at a diner in the park, she waiting tables and he washing dishes. they saved their tips for a year in order to have a down payment. After walking the lot for a half hour, I enthusiastically showed them a 3 year old Nissan Sentra. Well within their price range, solid value, reliable, and easy on gas.
They went through our finance department, and we sent them home, assuring them that we would get the interest rate and payment promised, for the down payment they left with us.
Now the heartbreak. A week later I was called in to the sales managers office and told that I need to “squeeze” the customer – call them up, and tell them to come back to the dealership (3 hours one way drive) and either bring us more down payment, accept a payment double that of the one quoted, or give back the car. “Why”, you ask?
Because the finance guys “made a mistake” and couldn’t get their loan “done” with any lender.
But finance and the manager weren’t concerned at all. They knew once the customer had driven the car for a few days, they would love it, and do almost anything to keep it.
I refused, and quit shortly afterwards.”
Thanks, Patrick. Seems to jibe with what we’ve heard and talked about before. Bring your own financing is probably the most important tip. Otherwise you’re going to also have to watch out for the four-square dealers use to rip customers off.
— BEN POPKEN
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I got a lot of very useful tips from “Buying a car for dummies” (yes, there is such book).
The best ones:
a) Negotiate THE PRICE of the car first, not the monthly payment. The dealership has a lot of slack in the alleged manufacturer’s price.
b) Go to the dealership near (1 or 2 hrs) their closing time. The salesman wants to go home with another deal closed and he can’t use delay tactics like going “to see the manager” while you wait.
The other option that’ll limit their ability to screw you over is to shop with a car brand that has “clean prices”.
For example, we recently bought a Scion xB. Pricing is set, Toyota financing rates are set.
Prices are listed online, rates are listed online, and aftermarket accessories (supposedly one of the markets the Scion was created for) that each individual dealer sells are all listed on their individual websites.
Saturn manages most of their policies the same way: I don’t know of any other brands that do.
Before we ever went in to the dealer we knew what everything would cost; in fact, we picked our dealer based on the fact that their aftermarket stuff that we were interested in was cheaper than the other local Scion dealer.
We went to a Dodge dealer to buy a used car. My husband had scouted out the car and negotiated what he thought was the final deal. The agreed price, new tires and a trailer hitch. He unfortunately mentioned that I was working out of state and would be back on Saturday to finish the deal and the financing. When we got there the games started. After the sales guy got us in a room he went over the deal that included a used set of new tires and no trailer hitch. They claimed nobody in town could install the hitch and the cost was over $500. Then he got a phone call on the sales room phone and excused himself for a minute. In playing with the phone he left the speaker on so they could listen in on what we were saying. He thought I didn’t notice he left the speaker on, never mind the speaker light was on. So I clearly mentioned my dissatisfaction with the change in the deal and how a trailer hitch was not that expensive and look here is a phone book, I should call around about the trailer hitch. I mentioned that the hitch for our other vehicle was only $125 and the local RV dealer usually could get one done in a few hours. I also mentioned the vehicle at the other dealership that was nicer and didn’t have any of these lacking items. When I announced to my husband that I had found the phone number of the local RV and was going to call them about the trailer hitch pricing and issue suddenly the sales guy reappeared with all problems resolved.
The other part of this was the horrible part. The Dodge dealership used HSBC for their financing. What I either missed in the fine print or was never stated was that if you paid the loan off early you would have to pay an early termination fee that exceeds the interest you would have paid for the life of the loan in order to pay it off early. Ours was close to $4000 in additional fees. If you don’t then they call it a negotiated settlement and put a black mark on your credit. So now I have a black mark on my credit report for paying off a loan early, even though I paid the full principal on the loan.
Hindsight is certainly 20/20. You guys have some great tips that I wish I’d known months ago. Has anyone had their trade-in keys withheld from them until they decided to go ahead with a purchase? I decided to trade my Pathfinder in for a new Toyota Corolla, and they took my keys to evaluate the trade-in. In the meantime we were unable to reach a negotiating price and I wanted to leave. They refused to give me my keys back, just kept pressuring me more and more. I screwed myself completely in that deal (into a LEASE, no less), I felt helpless and just wanted to be out of there. Are there any legal issues involved with situations like that?
@bzjenjen: Very simple: you have five minutes to get my keys, or I will call the police to file a theft report against your dealership.