In this thread about buying cars through Costco to avoid the games and scams car dealers in the past have been known to pull, a handful of people made the claim that going to Costco for that reason wasn’t necessary any more because deceptive practices are a thing of the past when it comes to car dealerships. In your experience is this true?
I know that a couple of years ago a good friend of mine went to a couple of large new/used dealerships in the area to look at getting a car. In both cases the guy who he was supposedly negotiating with quoted a price he could live with…then put him into a little room so that the salesdude “could get the manager’s o.k. for such a unusually low price”. Both times my buddy left the room, got into his car and went home.
it’s not a “scam,” per se, but a lot of dealerships still use the “four square” worksheet which lets them know what they’re getting out of the deal, and incentivizes the buyer to only consider monthly payment.
the grueling part of the process is usually with the “F&I” person who really lays on the high-pressure tactics, pushing the service plans, tire protection, gap insurance, stem lube, yada yada. You always can say “no” to all of them. or just walk. Although gap insurance might be useful if you’re not putting enough down to cover the instant depreciation of driving off the lot, a lot of times your existing auto insurance company can add that to your policy rather than paying for the dealer’s plan. I usually get tire/wheel coverage ('cos I live in Michigan) which is hit or miss. I made good use of it on my 2012 Mustang.
the whole thing about CostCo is that they’re basically arranging the sale price of the car. you still have to go through a dealership to take delivery, and they can still put you through the F&I wringer.
Eh, I think it’s just a matter of the customer being better well informed. (Because internet)
^this^
Anyone who buys a car based on monthly payments shouldn’t be in charge of the home finances.
I guess I kinda started that. What I should have said is that “I’m sure sleazy tactics still exist, but I haven’t seen or been a part of them”, because like Grrr! states, the internet has changed everything.
Jz78817 is right though…gap insurance is not a scam if you put little or no money down to cover your depreciation. If you total the vehicle a month after you buy it (and you financed with little or no money down), and you have no gap coverage, you now have no car and you owe the bank more money than your personal insurance company will send you a check for. That’s why it’s called “gap” insurance…it covers the difference.
I too had good use out of wheel and tire protection on my Buick Regal lease when I struck a massive pothole and popped two tires and bent one wheel. The repair cost was $1200, I paid nothing. AllState covered it. It raised my monthly payment on my lease by $4 a month.
The service plans can be extremely handy when you buy a used car, especially one that’s a little older and has some miles on it. Be careful though, the cheapest ones are generally only powertrain, and even then they list the parts that they do and do not cover. I would read that documentation carefully before deciding.
Some dealers are still hawking the “window etching” horseshit. Will tell you your loan won’t be approved if you don’t get it, and how valuable a tool it is to law enforcement if your car is stolen.
36 years on the job and I don’t know of any cop that ever used the etching service on an auto theft case. And I’ve always gotten loans sans etching. It’s an easy extra $1200 in the dealers pocket if you fall for it.
Wonder if that is location specific. I’ve never even heard of window etching and I’ve bought a dozen or so new cars in my time.
I don’t see it in Southeast Wisconsin. But over the last decade I’ve bought 5 cars down in the flatlands at 5 different dealers and every one of them tried to sell me this nonsense!
I’ve never heard of it either. The biggest “scam” I have seen was when I worked for the Jeff Wyler Auto “Family” in Cincinnati. They had a “Wyler Protection Package” (WPP is what they called it) and it was added to every deal on the first pencil of a foursquare. It was listed as $1800. Eighteen hundred!
It was billed as a “keep your car looking showroom new”, “add resale value”, etc service that came with a warranty against rips and tears in the seats that would be repaired at no cost.
So a high grade wax that was hand applied (think “paint sealant”), a 3M type anti-stain spray for the upholstery and carpeting, clear plastic adhesive door edge guards and the warranty. Total cost to the dealer was likely about $150. Your sales commissions were percentages based on units sold, on the front and back end (front end being “gross profit” and back end being warranties, GAP insurance, WPP, etc). Those percentages were retroactive to your first unit.
I think the pay plan was 8% front and back to start, 10.5% at 8 units sold, 12 units was 13%, 16 was 15% and so on. I believe it topped out at 18%.
So if I sold you a car there, say, a $20000 car at sticker, and we own it for $17000, that’s $3000 front end gross. Then the F&I guy sells WPP ($1800) GAP insurance ($1000) and extended warranty ($2500), total gross on the sale is $8300…on a $20,000 car.
If I was having a decent month, say 14 units sold (13%), my take on that deal would be $1079. And that 13% commission would apply to every vehicle I had sold that month. There were months there where I would get a commission check for $10,000 (less 46% taxes of course). That’s a good, profitable deal. And the customers that usually get all that stuff are generally the best customers in terms of their happiness with how they were treated.
I don’t work there anymore.
They still try to push a lease and then ask you why you dont want one and then argue with you. I tell them flatout dont ask.
Leases represent over 25% of new car sales now. They are attractive to buyers for a variety of reasons.
Cheaper payment
Always under warranty
New car every 3 years, with the latest technology
Option to buy at the residual number set forth in the lease contract after the lease has matured.
Cons-
Going over on miles
Damage concerns
They are a great way for someone that likes the latest and greatest on a car and doesn’t want to really own the car.
If you’re financing on a conventional loan, you don’t own the car after three years either. That’s a common objection “I don’t want to lease, then I have nothing after three years!”.
“Ma’am, you have nothing after three years on a 60 month loan either. It’s not yours until you make the last payment.”
Why are you so negative about leasing, out of curiosity? I work selling Subarus now, and their lease penetration is less than half of the national average, even though Subarus lease out very well in terms of cheap payments because their residual values (the projected value of the car as a lower mileage used car after 3 years) are really high.
Just curious. Not trying to sell you a car, I promise.
Back in the late 90’s when they had 24 month leases with no money down, capitalization costs, etc. I leased several vehicles for my wife. We leased a '96 Corolla for 24 months $139 a month, A '98 Suzuki Side Kick for $149 a month, and a 2000 Nissan Maxima for $169 a month. All 2 year leases with no money down.
All those cars were loaded, too! The Corolla had a weird CD changer that was in the trunk with a remote control that was attached to the center counsel with a cord that was too short.
Man, do I long for deals like that! She was getting a brand new car every 2 years for next to nothing!
Yeah, sleazy tactics definitely still exist, at least as of 2014. I was buying a new Honda Insight at a dealership by O’Hare Airport, and first they tried to add $400 to the quoted price because they had pre-installed these stupid door edge protectors on the car, and tried to insist they couldn’t be removed (they ended up just giving them to me for no charge). Then they made a big show of acting like they didn’t believe the written Carmax quote on my trade-in was real (that I asked them to match), even though it wasn’t exactly incredibly generous.
I think I was at the dealership for well over 3 hours, and didn’t get to finish the transaction until after closing time. And I had gone through the trouble of getting a quote before I got to the dealership.
Leasing instead of buying a car is like renting an apartment instead of getting a mortgage on a house.
You’re not building any equity. Sure, unlike a mortgage, you’re not going to get the full value of what you’ve paid in, but if you haven’t been completely stupid you should have a significant part of it as yours when you sell or trade in.
I know, you can lose value on a mortgage, but not usually.
No. They still do the exact same shit. In fact, they’ve added one more layer - telling you they don’t do the exact same shit anymore.
So what? As a renter, if I want to move, the most I have to do is wait until that year’s lease is up. I don’t have to worry about trying to sell the place, or making repairs so it’ll pass an inspection, or kowtowing to lazy ass buyers who expect the house they’re buying to be painted and finished to their exact desires before they’ll even consider making an offer.
At any rate comparing car loans to home ownership is dumb since cars are rapidly depreciating assets.
Last car I bought I test drove into a dealer and asked them their best price. Then I got a quote through a broker and got a cheaper price. I paid a small deposit to the broker and the car was supplied though the same dealer anyway so I walked into that showroom and paid the full amount and drove away. No haggling and no games.
Unnecessary and expensive add-ons like undercoating/rustproofing/interior stainproofing are still commonplace. Just say no.
You sound like the same Subaru salesman who last tried to push one of these. It totally pissed me off when he said “well I would”! Like I actually gave a hoot what this idiot would do.
Why is this so darn complicated? I DONT want a lease, I DONT want to give my reasons, and I DONT want to argue about it. The salesman said “well I am just curious as to your reasons”?
I think we just turned around and left and went to a different Subaru dealership.
Please tell me, do salesmen get some extra pay if they sell a lease?
Not necessarily sales pressure but I was very embarrassed that I didn’t buy from the guy? Why? I felt sorry for him because he was a little person. I was embarrassed when my wife started to giggle.
Yes a dwarf was selling Toyotas in Olathe Kansas. Now he had the knowledge and seemed like a good salesman, only issue is he admitted he couldnt actually drive a car.
Well we did 2 test drives of the cars we were interested in but decided not to buy. I just felt embarrassed we couldnt give this man a sale that day.