Car dealerships are just like any other business in that they are responsible for generating an operating profit. And like any other businesses there are those that attempt to do so upfront and straight forward and… those that are… well… less than straightforward.
Without a doubt the best chance that you have to avoid contributing exorbitant amounts to a car dealer’s gross profit is for you to get your research and financing in line prior to ever setting foot on the dealership. And quite frankly, for the vast majority who has some sort of access to the World Wide Web, there is no excuse not to get yourself up to speed.
Once you are ready to go… go slowly. When it comes to putting together your deal at the car dealership, speed is not your ally. Car dealers and sales people are in-depth at putting deals together at a rapid pace… and ringing up big profit numbers… stay calm, deliberate, and focused.
Don’t crank up the negotiations on your first trip to a dealership. Take some time to familiarize yourself with the people and the surroundings. Get a feel for what type of person your potential sales person is. Remember, this is about your comfort level… not theirs.
Don’t go for the ‘Spot Delivery’. A spot delivery is when the dealer allows you to take the car ‘as yours’ before they have definitively procured your financing. This can be exceptionally devastating if you have traded in your car to them only to find out a couple days later that the dealer either hasn’t been able to get you financed or can only get you financed at a very high interest rate. Don’t put yourself in this position.
Know your budget before you go shopping… and stick to it. Don’t tell or otherwise give the sales person any idea of what your budget is. They don’t need to know this. And never shop and buy your car by negotiating a monthly payment; you’ll pay more than you needed.
Don’t proceed if you are not comfortable with any of the proceedings. Without you, there is no deal. You have the ultimate VETO power, so use it if you feel hurried, confused, or otherwise uncomfortable at all.
And finally, and this is a very important point to remember, the selling price of the new car isn’t where the dealer makes the most profit.
The financing and the trade-in (when they resell your old car) are two additional profit departments for the dealership. Also, all those add-on’s and warranties that the dealership will offer you the opportunity to purchase also include a rather large profit margin for the dealer.
Car dealerships are sales centers. They are in business to not only sell you a car but anything else they can possibly offer and entice you with as well. Do your research on the car you are thinking about, the financing options available to you outside the dealership, and know the market value of your trade (if applicable)… then take your time to find the best deal you can putting all these together.
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