I know there is someone out there with questions about buying a car, what to look for (both good and bad stuff), and how the deals actually come together. If there is something you want to know…go ahead and ask. I love my chosen career and would like to pass along some of the inside knowledge I have aquired.
Please, no questions about specific models or technical questions. I’ve been out of the product sales portion of the business for far too long. Just questions about the process in general.
[QUOTE=pimaspinner]
I know there is someone out there with questions about buying a car, what to look for (both good and bad stuff), and how the deals actually come together. If there is something you want to know…go ahead and ask. I love my chosen career and would like to pass along some of the inside knowledge I have aquired.
Please, no questions about specific models or technical questions. I’ve been out of the product sales portion of the business for far too long. Just questions about the process in general.
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What time of year is the best time to buy a new car? How old of a car should I buy–if I go that route–if I want to maximize the return on my dollar–i.e., still get a “newish” car, one not likely to have longer-term, chronic issues, but still have the price reduced enough to make it worth buying something, well, not new? I have heard that a two-year old car is best in that regard. The depreciation that occurs “driving off the lot” is not worth paying for, or some such logic.
What are the 3 best things to keep in mind, ask or insist on to get the best deal possible?
[QUOTE=Stratocaster]
What time of year is the best time to buy a new car? How old of a car should I buy–if I go that route–if I want to maximize the return on my dollar–i.e., still get a “newish” car, one not likely to have longer-term, chronic issues, but still have the price reduced enough to make it worth buying something, well, not new? I have heard that a two-year old car is best in that regard. The depreciation that occurs “driving off the lot” is not worth paying for, or some such logic.
What are the 3 best things to keep in mind, ask or insist on to get the best deal possible?
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The best time to get the most incentives on a new car is when the next years models are arriving. The manufacturers want to get those cars in the streets to make room for the new inventory. The new models roll in earlier and earlier every year it seems. Look for 2008 models to start arriving in June (if not sooner).
If you wish to buy a used car, generally one that is current model year to two years old is the way to go. You have to be careful of mileage though. You are correct that the depreciation hit is greatest in the first two years.
Three things to keep in mind when you are car shopping. Number one is your budget. Whether it is a monthly payment or overall number, try to stay in the realm of reason, and know what you can afford to pay before you step on the lot. Also, interest rates have gone up considerably in the past year for auto loans. If you will be financing, know your credit score and if there are any issues on your report that could hinder your approval, let your salesperson know up front. It will save you both a lot of time looking at the wrong vehicles. Two, cash won’t get you a better deal. The dealership doesn’t make any profit on the back end if you pay cash. In fact we hate cash buyers. The price of the car won’t be lowered. Whip out the checkbook after you have negotiated your best deal. Three, at some point, the dealer is going to let you walk away. This is when you know that he is all in, and can’t go any lower on the price. After you agree to the deal, don’t try to get any more freebies.
Hope this helps you!
It does, thanks!
You hear stories about poor people being sent away from the dealership with a $30,000 truck at 23% APR. Is this common or a case where one or two creep finance managers have gotten a ton of press? If this is common, do you HONESTLY expect them NOT to default? What are your feelings about this “predatory lending?”
Ridiculous cases ASIDE, do you ever work financing for someone and think to yourself, “they’re going to be in WAY over their heads?”
I probably have some more, but can’t think right now…UFC is on.
I’ve also heard of a technique where the person is allowed to leave with the car, pending final verification of financing or something, and oops, lo and behold, a week later, “sorry, we can’t do it for you at this rate, but we can do it at this much higher rate.” Meanwhile, their trade-in vehicle is long gone.
How common is that?
[QUOTE=pimaspinner]
After you agree to the deal, don’t try to get any more freebies.
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So long as the dealer does try to get any of their own ‘freebies’ after we’ve agreed to the deal. Like undercoating, extended warranties, ‘prep’ fees, ‘document’ fees, license fees, glass etching to ‘prevent theft’, $500 Scotchguard treatments on the interior, all kinds of questionable insurances…
Unfortunately, and thanks to car dealers, having everyone ‘agree to the deal’ just kicks off round 2 in their attempt to squeeze as much money out of the [del]mark[/del] customer as they can.
[QUOTE=Cyberhwk]
You hear stories about poor people being sent away from the dealership with a $30,000 truck at 23% APR. Is this common or a case where one or two creep finance managers have gotten a ton of press? If this is common, do you HONESTLY expect them NOT to default? What are your feelings about this “predatory lending?”
Ridiculous cases ASIDE, do you ever work financing for someone and think to yourself, “they’re going to be in WAY over their heads?”
I probably have some more, but can’t think right now…UFC is on.
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This is a fine line to walk. It’s not up to me, it’s up to the lenders to approve the deal. If the lender thinks that the person can make the payments, and the customer agrees to the payments, it’s not my place to step in a say “No, I’m not going to sell you this car”. The banks take into consideration debt to income ratio, past payment histories, and a myriad of other factors.
Auto dealers are no longer allowed to mark up the bank’s rate willy nilly. We can mark up a rate by 2.5 points max. Someone who has a 23% interest rate has had some serious credit issues in the past. A bank that will take on this person is taking a big risk, and the rate reflects that. However, a person can use it as an opportunity to get their credit back on track. I’ve had relatively few of my sub-prime finance customers default, and quite a few that have come back a couple of years later with a good payment history and have been able to trade into a better car at a much better rate. I don’t consider this to be predatory lending. An auto loan is a closed end loan with a defined amount of payments, and everything is disclosed up front. By the time the person signs the contracts, they KNOW what they are getting into.
There have been times I’ve tried to get someone to buy a less expensive car that would have more manageable payments, but they wanted the car they wanted, and there was no talking them into it. :rolleyes: It’s my job to get a unit into the street. If I feel like there is something weird like identity theft, or the like, I WILL walk away from a deal.
[QUOTE=ivylass]
I’ve also heard of a technique where the person is allowed to leave with the car, pending final verification of financing or something, and oops, lo and behold, a week later, “sorry, we can’t do it for you at this rate, but we can do it at this much higher rate.” Meanwhile, their trade-in vehicle is long gone.
How common is that?
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ivylass , this is much more common industry-wide than I would like. :mad: I will not let a customer leave with a car with the impression that it’s all wrapped up without an approval sheet from the lender. There have been cases however, that an applicant’s proof of income did not verify when the bank called, or when they called their employer, the applicant had quit their job. I’ve had to get cars back for those reasons.
Some dealerships will paper the deal with “what they think they will be able to get” especially on a weekend. Then come Monday morning, they can’t get the deal bought by a bank, or at a higher rate than they anticipated. I personally don’t do this. It’s much more work, stress, and heartache, and I just don’t want to deal with that. As far as the trade-in vehicle goes, sometimes it’s gone and sometimes it isn’t. If it was a $200-$500 POS, then it probably went on the wholesale truck within 48 hours. A nicer car might be in the shop for reconditioning or on the retail lot. Our dealership doesn’t have much of a problem with this at all.
[QUOTE=Sam Stone]
So long as the dealer does try to get any of their own ‘freebies’ after we’ve agreed to the deal. Like undercoating, extended warranties, ‘prep’ fees, ‘document’ fees, license fees, glass etching to ‘prevent theft’, $500 Scotchguard treatments on the interior, all kinds of questionable insurances…
Unfortunately, and thanks to car dealers, having everyone ‘agree to the deal’ just kicks off round 2 in their attempt to squeeze as much money out of the [del]mark[/del] customer as they can.
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Sorry, you seem a little bitter. The deal you agree to should have all of those things spelled out already. If you are just negotiating the price of the vehicle, well that does not include taxes, license fee, doc fee, extended warranties and “questionable insurances”. Our salespeople are supposed to sell you the Interior/Exterior Protection, window etch, and other accessories. If you don’t to buy them, fine. It’s my job to explain the benefits of extended warranties and insurances, and any other products that could enhance your vehicle or protect you. Because of discriminatory lawsuits, I am obligated to offer these products to every single customer. It’s your decision whether to buy them or not.
BTW, never buy undercoating. Ever car comes from the factory with undercoating. This is a rip-off.
[QUOTE=pimaspinner]
Our salespeople are supposed to sell you the Interior/Exterior Protection, window etch, and other accessories. If you don’t to buy them, fine. It’s my job to explain the benefits of extended warranties and insurances, and any other products that could enhance your vehicle or protect you. Because of discriminatory lawsuits, I am obligated to offer these products to every single customer. It’s your decision whether to buy them or not.
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Thanks for a lot of interesting information. What frosts me on the last few new cars I’ve bought is that I make the deal with the salesperson, then make another deal on the trade-in. In the last case, on a high-end car, he did not even pull the old “got to check that with my manager” ploy, and we arrived at a friendly agreement.
I did not admit I was going to pay cash, but in any case, he sent me to see a “financial manageer” or perhaps some other title. Here he started on the hard sell for undercoat, leather conditioner, etc, etc. I kept trying to tell him all I wanted was the options had agreed to with the salesman. I understand he had to offer each of these, but it annoyed me no end that he pushed far too hard and too long for each.
The poor guy was shattered when told him I did not want to finance, and I do understand the dealer makes money on that, but still, I was the customer.
I came very close to walking back to the salesman and telling him this other guy had queered the deal, but he finally gave up after wasting more than an hour of my valuable time. This is a bummer, and it is much worse on lower-end cars, and too prevalent. Yeah, I’m bitter too.
When I know what i want, know the sticker and invoice prices, and know the Bluebook trade-in value, it should not take more than an hour to reach a mutually agreeable deal, but it seems it is necessary to take at least half a day to buy a car today.
OK… One week ago I purchased a car for a good price. It was a 2006 300C that they still had on the lot. This week I found out that for the next level higher trim package (a 2006 SRT8 300C) people have been buying them for $10k below sticker which makes it $1k more than what I purchased my car for. :smack:
Do you think I could work out a deal to get the SRT8 without totally being reamed?
I’ve put 300 miles on the car since its purchase.
[QUOTE=pimaspinner]
Sorry, you seem a little bitter. The deal you agree to should have all of those things spelled out already. If you are just negotiating the price of the vehicle, well that does not include taxes, license fee, doc fee, extended warranties and “questionable insurances”. Our salespeople are supposed to sell you the Interior/Exterior Protection, window etch, and other accessories. If you don’t to buy them, fine. It’s my job to explain the benefits of extended warranties and insurances, and any other products that could enhance your vehicle or protect you. Because of discriminatory lawsuits, I am obligated to offer these products to every single customer. It’s your decision whether to buy them or not.
BTW, never buy undercoating. Ever car comes from the factory with undercoating. This is a rip-off.
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In my experience it’s never the salesman that tries to sell you that stuff. It gets tacked on in the office AFTER you’ve agreed to the deal. In fact, when I purchased my last vehicle they tacked the stuff on to the sales sheet without even asking me, then just mentioned it casually while going over the details of the deal. I had to tell them to remove it, and the manager had to be called and got indignant. “We already wrote up the paperwork - you didn’t tell us you didn’t want these things, and they’re pretty standard…”
I had to threaten to walk out before they relented.
Another common trick for the dealership is to negotiate a price without informing you of factory rebates, and then burying the paperwork for those in the mound of papers you have to sell.
[QUOTE=pimaspinner]
The best time to get the most incentives on a new car is when the next years models are arriving. The manufacturers want to get those cars in the streets to make room for the new inventory. The new models roll in earlier and earlier every year it seems. Look for 2008 models to start arriving in June (if not sooner).
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Try sooner at Ford, I just bought an 07 Escape last week, I could have bought an 08 that was on the lot. They gave me a much better deal on the 07 so I took it. I was suprised that they really didn’t pull anything on me though, they did ask for some things, alarm, glass etching, but I told them I had financing and they didn’t even ask if I wanted to take theirs. The worst part is it took them two hours just to get the car to the lot so I could test drive it. Then it took another two to sit around and do nothing.
[QUOTE=DustyButt]
OK… One week ago I purchased a car for a good price. It was a 2006 300C that they still had on the lot. This week I found out that for the next level higher trim package (a 2006 SRT8 300C) people have been buying them for $10k below sticker which makes it $1k more than what I purchased my car for. :smack:
Do you think I could work out a deal to get the SRT8 without totally being reamed?
I’ve put 300 miles on the car since its purchase.
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All you can do is ask, but unless the company or individual dealership has an exchange policy, they are under no legal obligation to honor that request. If they do not, if would not benefit you at all to trade it in and buy the other one. You will lose much more.
[QUOTE=pimaspinner]
All you can do is ask, but unless the company or individual dealership has an exchange policy, they are under no legal obligation to honor that request. If they do not, if would not benefit you at all to trade it in and buy the other one. You will lose much more.
[/QUOTE]
Was this a new car? If so, the problem is that once the car leaves the lot under your ownership (or maybe it’s as soon as you legally own the car?) the car can no longer legally be sold as a new. Remember that bit about the greatest depreciation coming in the first year? A large part of that kicks in as soon as it’s no longer legally a new car.
I’ve personally never heard of a dealership that had an exchange policy for new cars for just this reason. I’ve seen several exchange policies for used cars advertised, however.
[QUOTE=zagloba]
Was this a new car? If so, the problem is that once the car leaves the lot under your ownership (or maybe it’s as soon as you legally own the car?) the car can no longer legally be sold as a new. Remember that bit about the greatest depreciation coming in the first year? A large part of that kicks in as soon as it’s no longer legally a new car.
I’ve personally never heard of a dealership that had an exchange policy for new cars for just this reason. I’ve seen several exchange policies for used cars advertised, however.
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My particular company does have a 30 day exchange policy for new cars, but it must be within the first 30 days and 1500 miles of ownership. You are correct that we can no longer sell that vehicle as new, which poses a whole slew of problems for us as a dealership but not for the customer. However, if his paperwork has not been processed and the title assigned, it could be something easy for the dealership to do if they so chose.
What does a dealership gain by getting someone a low rate loan (like 4.5%), over cash? Assuming they aren’t making money by changing the price of the car at the same time.
[QUOTE=SmackFu]
What does a dealership gain by getting someone a low rate loan (like 4.5%), over cash? Assuming they aren’t making money by changing the price of the car at the same time.
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The finance companies pay us to secure customers for them and do the loan paperwork. Generally if it is a low rate (subsidized by the manufacturer), we will receive a flat fee of $100-$300 depending on the amount financed. There are still models out there with 0% financing available, and it just doesn’t make sense to pay cash if you can qualify. You could be earning interest on that money in whatever investments you have. It’s getting harder to find 0% though.
When I bought my Scion xB last fall, it was an easy, pleasant experience. I’d already researched cars and knew what I wanted, the Scions sell for a fixed price so there’s no haggling over that, and I didn’t have a trade-in to dicker over. The salesman didn’t give me a hard time about adding options (maybe out of gratitude for such a quick easy sale?), and it wasn’t till the trip to the finance manager (or whatever the heck his title was) that I got any add-on push: Undercoating, Scotchguarding, all that – BUT. This guy asked me stuff like, “Will you be eating in it? Got kids?” “Nope.” “Okay, don’t need that,” and he lined out Scotchguarding. And so on for a number of other options.
The only thing he did sell hard on (and that I bought) was the extended warranty, with the argument that, no, I don’t need to worry about stuff like the drivetrain, Toyota models last forever with stuff like that, but it pays for itself if anything goes wrong with the electronics. I did go for it. Was I taken, or is that in fact a valid reason to get the extended warranty?
Oh, and I paid cash. Said I’d be doing that right up front and nobody seemed bothered by it. Maybe because I also said up front I’d researched the heck out of the car and knew exactly what I wanted? I have to add, everyone I dealt with at this dealership was helpful, friendly, lowkey on the selling, and all in all made the experience way less stressful – indeed, it was positively pleasant – than all the horror stories I’ve heard had led me to expect.