Contrary to popular belief about car dealerships, they are not necessarily evil. However, it is usually a car salesperson that prevents you from getting the best possible price when you want to buy a car. As such, keep these four car dealer tricks in mind whenever you go car shopping.
Negotiating on monthly payments
Be very careful whenever a salesperson refers to monthly payments. Some salespeople divert your focus with low monthly payments only to inflate the other variables such as interest and length of loans, increasing their profit margins while you end up spending thousands more on the car. Refrain from discussing monthly payments and inform the salesperson you can only talk financing after you know their best price. Never reveal how you will pay for that new Lexus you want until after you have successfully negotiated down the price.
Informing you that your credit sucks
All car dealerships have to do to rip you off effectively is insist you do not qualify for a better rate, especially if you do not know your credit score. If a bank might offer a 5% loan, car dealers might insist on 7% as the lowest for your credit score. Pull your credit report and get to know your credit score before you visit a dealership. In this way, you will not be unaware if the car dealer tries pulling a fast one on you. Whatever your credit score, shopping around for financing and getting it on your own if possible is also advisable.
Baiting and switching
While most salespersons use humor to disarm you, some give the impression that they are on your side against a faceless manager seated in the back room. Some will offer an exceptional trade-in offer or discount. However, most of these offers inevitably get squashed by the manager. Although not all salespersons are the same, they are all doing their jobs, meaning they are not your friends. Do not fall for the playacting, walk if whatever you agreed on is not honored.
Pushing add-ons and fees
Be attentive and look out for extras added to your financing or purchase. Car dealers can increase the overall price of your car payment by adding extras such as an extended warranty. Carefully check every financing and sell sheet and arm yourself with knowledge of which add-ons are unnecessary. Apart from document preparation or customer service fees, dealers should not charge you any hidden loan acquisition fee.
Your best strategy
To come out on top, you only need to compare multiple car dealerships and research car prices. The results of a recent car survey revealed that visiting two dealerships after knowing another dealer’s invoice prices saves car buyers up to $800 on average.