Sometimes the stars just don’t line up. My wife and I have been looking for a car lately. We got a car loan, we did research, we even test drove some cars. We thought we were ready to buy a car, so we went back to the best car that we found and took it for a drive again. Everything went well, and we knew we could afford the car, so we went in with the salesman to look at the papers.
This being the first time we have ever bought a car, we learned some valuable lessons. First and foremost: if it feels wrong, don’t do it. Our first clue that it wasn’t meant to be was when we first sat down. I asked who the previous owner was, and I wasn’t given an answer. It was weird. He brushed me off, saying they get cars from all sorts of places. This, to me, is a valuable piece of information. It can give you an indication as to how hard the vehicle has been driven. For example, I would rather buy a car that was driven by a grandmother to her children’s house as opposed to a car that was used by a rental agency.
Anyways, at this point the salesman pulled out the paperwork on the car. He showed us the insurance report (which shows whether or not an accident has ever been reported on the vehicle). None had been reported, so he brushed that off quickly. He then showed us the repairs that were done on the car when it was brought in, adding that “the service shop likes to charge the sales department, which is why things look like they cost a lot”, and “these didn’t need to be done, the service shop just felt like charging us”. We again asked some questions but these were brushed off as, “minor, very minor”.
After that, he asked us if we would be financing or paying cash. We hadn’t even agreed to buy the car yet, so I simply said that it depended on the price. So he got out a piece of paper and started to copy things down, like the make, model, price, etc. At the bottom he wrote, “I will buy this car today if the price is agreeable”. He asked me to sign, which I did, but only because I knew it wasn’t contractually binding and was just a tactic to get me to feel compelled to buy the car.
From there, it went downhill. He wrote the price, the sale price, and started adding fees. He added a document fee, stating that it was mandatory and that theirs was very reasonably priced at only 395 dollars. When we asked what it was for, he said that they have to check to make sure that there isn’t a lien on the car. He then added a fee for ETCH, which he explained was putting the cars VIN number on all the cars parts so if it got stolen we would get more money back from our insurance plus even more money from the dealership to buy a new car. That would cost us an additional $299. When we asked for the guarantee of additional funds in writing he said, “I can’t lie. We are a big dealership and so I would get fired if I lied”. When we explained that the document fee would be done for us for free by our bank, and that we didn’t want ETCH, he said he might be able to get his manager to take ETCH off because, “I know how to work my manager”. But the document fee stays because “it does more than check for a lien”. What, exactly, he could not say.
After a bit of a stalemate he asked me what I would like to pay for the car. When I told him, he put his hand to his forehead, sighed deeply and told us that this conversation was over. He explained that they were only making a thousand dollar profit on the car at this point, so there was no room to negotiate. I obviously had offended him deeply. So I finally told him to ask his manager if we could buy the car for $300 less than the listed price plus tax but no other fees. He left, and the manager came out, told us we were asking too little for the car so we probably should just leave.
So we did.
All in all it was quite a poor experience. Having never negotiated for a vehicle, and having only read about it, I expected some of these tactics but figured that when we simply refused, they would sheepishly grin and say, “oh well, we tried, here’s your car”. The funny thing is, we would have bought the car if it was simply sold for the listed price plus tax. We wanted to pay a bit less, but we were willing to pay the listed price! If only they hadn’t tried to haggle us for a “document fee” or for VIN etching, they would have sold the car. I guess they figured they would wait for someone else that wasn’t as willing to say no to come along.
At first we felt really poorly as well, because even though we figured it was all an act, there was a glimpse of doubt in our minds as we walked away from the dealership. To another dealership, of course, where the first question we asked was, “Do you charge a document fee?” (they didn’t, and confirmed our suspicion that it was a scam).
The biggest lesson that I learned was that a car sale that seems too good to be true definitely is. Dealerships don’t really care how they get their money, whether it is the listed price, a document fee, or some other made up reason. The margin on a vehicle isn’t quite as high as I thought it was, so if you see two exact cars at two different dealerships for vastly different prices, I can guarantee that the dealership that has listed the car for less money will try to make up for it with one fee or another. Be careful, and give your business to an upfront salesperson that will sell you a vehicle that they stand behind.
What dirty car dealership tactics have you come across?
Dirty Car Dealership Tactics,Related Posts:
Alan Schram writes about personal finance and his encounters with it in his everyday life. Alan is recently married and is looking to save money on expenses and reduce his debts.
Oh boy….is this what I have to look forward to?! In my post today, I am asking the readers to help me because I am shopping around for a slightly used vehicle.
I just bought a 2006 Chevy Aveo 9 days ago, from my car insurance guy. It was in a minor wreck, so the insurance company bought it for 1500 bucks (they totaled it out). I bought it from the insurance company, and to date, i have 3142.00 in a nice car that has 56k miles on it.
Find a private car for sale, ask all the repair document, get the blue book value and ask a mechanic ($50/- fee) to check every thing and ask you bank to verify that the car is paid off or what kind of lien is on the car. presto.
Look at one modl and year of car only, look at what others are asking to get an average asking price, then cut 10%. this is your shopping max price, as this is the real worlds avg sale price.
take it to a garage for a 50.00 chekup, carfax it for sure, and if you can get financing at your own choice of banks, do it, as they make huge bucks on setting up the loan for you.
do this and youll have better luck.
ps, also look into how many miles the car can really go, 200K? 400k? a saturn rarely sees 220k, a cummins dodge can see 1.2 million miles however, and the newer ones can get 25mpg.
Hey Alan, I agree, I hate the “sign here early so you feel guilty later” tactic.
My big pet peeve is when dealers over-configure vehicles. You see a car you like at a reasonable price (advertised on TV or even on the lot) but don’t want to buy the GPS, cargo shelf, spoiler, mudflaps, pin-striping etc. But the only cars they have in stock happen to have all these upgrades installed. Of course the dealer has a big margin on each upgrade, and has no desire to remove any of them for you.
Never sign anything. Work backwards from your price point plus tax – he can then add whatever he wants as long as the final total is your offer. Use “we want to sleep on it”. Watch the movie “Fargo”. Read car salesmen tactics (books/web).
You ain’t seen nothing yet, Alan! but don’t get discouraged. There’s many more where that came from.
Alex, I like the point about setting a final price and the dealer can add anything he “has to” within that. If they need to add a $200 fee, sure, just reduce the price of the car by $200!
The part where you wrote “it’s all an act” hit home with me. All dealerships seem to go thru the same parade of activities from the sign here (“it’s non-binding”), to multiple closed door meeting with a MANAGER who we never see, to add ons throughout the process.
I can never escape the notion that I’m being held up when buying a car. The best weapon is always to get up and leave, but it’s a bit of a shocker that they let you go without haggling you back.
But there are some businesses that act as if they don’t need the business, and you and your wife apparently stumbled on one. How organizations like that stay in business is a mystery…
.-= Kevin@OutOfYourRut´s last blog ..Income Sources You’ll Be Richer For Not Having Tried – Part 2 =-.
On my first purchase I got suckered into “your so young and with a lack of credit we can only get you bought for 11.75%.” I now only buy for cash. But if you are going to borrow always shop for the loan separately.
.-= LeanLifeCoach´s last blog ..Are You Married To A Gambler? =-.
I had someone very knowledgeable with me when I was doing a car search and we researched for months before finding the one we wanted. I got financing and a guaranteed check from Capital One who I had banked with for years so we finally found the car I wanted and test drove and all that. Then we went back to get the car the next day and it had a spoiler added and was suddenly $10 more. We were able to fight that because my friend had printed the car information off the website the day before and we had a check that was guaranteed. We got the car for the price we first saw and managed to knock some stuff off as well.
Another tactic they tried to use on us was ‘how much do you want to pay per month?” My friend ( guy) and I both look young so I guess they thought they could take advantage of us. I told the salesman I was more interested in the total value of the car than the monthly payments. He seemed shocked and had no idea what to say for a few seconds. He then said no one had ever told him that before.He was trying to sell us a more expensive car with a longer loan by saying it is just $125 per month.
I told him to let me worry about my monthly payments and just give me the total cost.
We also had a checklist of things that we marked off as we inspected the car and when we pulled out the Kelly blue book value he almost died. They did have the car priced too high and kept claiming all these ‘enhancements’ they had done.
We were firm and at one point I overheard him saying he was not going to get a reasonable commission because we had convinced the manager to knock the price down.
.-= Lulu´s last blog ..How I Save Money At CVS: 3 May 2010 =-.
When buying my first car, I had driven past a dealership with exactly the car I wanted but couldn’t stop that day. I came back a week later looking around and couldn’t find the car. When I asked the salesman he said that at night they pull some of the cars inside because there had been some vandalism in the past and they do it as a precaution. Well, while they were pulling this particular car in, they scraped it and the area above the front right wheel needed to be touched up…
Sounded light, wasn’t too happy but figured I could get the car for a lot less now. I thought wrong, they wanted to charge me MORE than what they WERE asking because they had to pay for the repairs. I gave my final offer right then and when it wasn’t accepted, walked out. Thankfully they were truthful about the damage, I was told that they didn’t even need to tell me about it.
By the way, new cars are also susceptible to damage that does not have to be disclosed if it does not exceed a certain amount (or at all depending on local laws).
Man, after reading this I sure am glad I live in a small town. They don’t try any of this crap here.
When I bought my car I went in and offered the salesman $500 more than they paid for it. He showed me the invoice and the deal was done. It took all of about 10 minutes. They volunteered all the previous history and who the previous owner was.
The salesman told me “you’re a young guy and we want you to buy 10 cars here. So we’re not going to screw you.” What a great attitude for a car dealership to have.
Always ask for the DEALERS INVOICE…
they make 2 invoices on every car:) true story.
Your right there are two invoices, one is the invoice to the dealer from the factory(true cost) the second is the invoice to the salesmen (true cost + dealer cost) the salesmen profit comes from what he makes over and above true cost+dealer cost. Generally 1/3 of MSRP is true cost, and the rest depends on the dealer…
My son is a new car salesman. From listening to him I will never buy a new car. He charges as much as he can get away with. He adds fees and he will adjust the numbers to get the maximum amount from you. He is ruthless and shows no mercy. But he sells 5 or 6 cars a day and makes a ton of money.
Don’t be hatin’ on me Dad! You’re just jealous. Just because I sold you that one car and I made off with $8000 in profit? HAHAHA! You’re a sucker! You paid $2000 for the secretary to STAPLE the papers together! I sold you rubber door guards for $600. That will teach you for making me mow the yard once a month, you selfish jerk!
1. Do not borrow money to buy a car.
2. Do your transactions with car dealers via e-mail.
Regarding #1, if you do this once, then start saving for the next car immediately, you’ll be off the debt treadmill forever.
Regarding #2, I’ve done this, it’s painless. Deal with two at a time, so you know you can bargain with one and if they turn you down you’ve got the next. Most dealerships are happy to do this. If not, go to the next dealership.
Buy the next car on ebay. What you see is what you get. If you purchase one in the US you can probably save $10K depending on the model. No surprises, no sales tactics to put up with – just big savings. If you do the US purchase it means you have to do some extra leg work plus shipping or driving to Canada but what is your time worth? $10K?
I just bough my second car on ebay in the US and we got a far better car than I could have bought here for less money, less hastle.
I had a 3rd child on the way, so needed to trade in my Ford Escape for a minivan after only 2 years. Was sad to see it go, but it only has so much room for car seats. I had the Dodge Caravan all picked out, and was haggling over how much the dealership would give me for the 2-year old Escape. We settled on 19,000, which I thought was a fair price. I still had 19,000 in payments to go on the Escape which is why that was how much I wanted. The dealership would essentially be paying off what I owed in exchange for the vehicle. So then he presents me with what the Caravan would cost, but somewhere 4000 dollars had been added. So I asked him to explain the math. He makes a big deal of whipping out his calculator, and then scribbles down (and I am not making this up) :
27999
+19000
- 19000
———
31999
The two 19,000 in the figure above was what I would receive for the vehicle, and what they would have to pay to eliminate my loan. Fair enough, but how did the price magically inflate in that simple calculation? So I pointed out this problem, and the dealer looks at me like I am some sort of troublemaker and says, “Well it doesn’t matter if you take it off the front or the back.” Wha????
Basically he only wanted to give me 15K for the Escape, but wanted me to think he had cleared my car loan, so needed to magically add 4K to the price. Needless to say, I did not buy a car that day.
i know it sounds like i am spamming to leave a site in the comments but all of these scams are talked about on http://www.carbuyingtips.com/
i read the site like 4 times all the way through so when i went to buy my car i knew what they were going to try so i didn’t pay for ETCH and i cut the document fee in half.
Ok, where to start?
I ran a car dealership for 3 years and was in the car business as a salesman, finance manager, and sales manager for 9 total.
There are a lot of things right and wrong with this article.
1. This was his first time buying a car. Nuff said. With all of the true and false stereotypes and by the initial tone of this article I got the feeling the author was ina defensive tone from the get-go, which is a sign to salespeople that you may not be worth the commission. I hate to tell the general public this, but there are just some customers who are not worth having. Let me clarify: for most people, buying a car is one of the biggest purchases of their life and one of the few times they actually come into contact with “business” meaning dealing with an industry that deals in a commodity and has the ability to negotiate. Car people negotiate on a daily basis, and are not emotionally attached to it. Most business people are not emotionally attached to their business deals either, but the general public surely is. So when a car person meets a customer who has the persona of “they are out to get me”, it’s a warning that they might (not always but might) be a future nightmare to deal with.
2.The author/customer had no idea what the car was worth. Did he ask what the NADA retail value for the car was? What about trade in value? What about wholesale value? He never said and it could be assumed that he didn’t which means that the dealer COULD have been selling the car to him for $5000 below trade in, which would be impossible, but we’ll (no will he/she) ever know.
3.Red flags. He has never bought a car before, and we have no idea of the level of car he was looking at. It was difficult at best getting first time car buyers financed when things wee good and I can only imagine now they are next to impossible without a sizable down payment. Sizable? I mean 50%. Yep, without a strong co-signer, that’s how much it takes. So if was looking at a 20k car, and with no previous car credit, and with the air of defensiveness, why should this salesman chase him when he left when the chances are, this customer probably couldn’t have bought anyway.
I know, I know. “He could have pulled out 100K”…”He could have had his mom cosign” “He coulda blah, blah, blah.” These things happen, but I hate to tell you this and shatter your illusions, but not that often. Except for the cosigner, but if really wanted to be taken seriously, he would have brought them along – Which he did not know that he should have because this really IS his first rodeo. Sorry.
3. ETCH is bullshit. Everyone knows it. It does work IF your vehicle is stolen AND get’s chopped up, AND ever found again. This is perfect storm of car crime and car crime catching that again, rarely happens. But WHEN it does, the guarantees/etc will pay. Still bullshit. So why put it in? Because the dealer wants you to object to that and NOT the price of the car. They will gladly take it out if you make it a deal killer. It’s a great negotiation tactic.
4. Documentation fee. I went from a finance manager at one company to a sales manager at another. Then I became the General Sales Manager. Their is a real pecking order in car dealerships and the GSM answers to the General Manager and the owner, who often times are one in the same. The first thing I did was institute a documentation fee of $99. Why? I wanted to set the tone, we would raise it later.
–Why do it in the first place? What is it for? Simple, it’s guaranteed profit for the dealership, and when asked we trained our salespeople to actually tell the customer that. The customers actually found it refreshing that a small business would openly admit to profit. We would allow them to negotiate the fee off of the price of the car if they objected, meaning that we would NOT lose someone’s business over the doc fee.
–We also added it because since 95 percent of all car sales are financed, the banks have the ultimate control over how much a car gets sold for.
Didn’t know that did you?
Let me explain: The banks will only finance a certain percentage above the trade or retail value of the car. I cant sell a car worth 20k for 35k after all of the taxes and tags are included, because the bank won’t finance it, even if the customer wanted it. Why, because cars move around and are easily hid and go down in value fast which makes them terrible collateral.
—But they WILL allow us to “roll in” the doc fee over an above the agreed to amount, up to generally $395.
—Furthermore we didn’t have to pay commission on that profit. Sorry.
—Lastly, most dealers do charge a doc fee, and most customers don’t care. Enough said.
5. The used car department typically is 90% of the service department’s profit. Yep, that high. They do overcharge the used car department because then the parts/labor get added to the cost of the car so their is instant profit for the dealer and less commission to pay on the sale of the car. The dealer DOES pay commission to the service dept manager at a much, much lower percentage than a car salesman, ensuring that the if the car is even CLOSE to needing work, it WILL get it before it goes on the lot. The customer also wins because the car has been gone over by a tech who gets PAID more the more they find wrong and fix. See how it works?
6. As a GSM, my job was to manage the deals and my salespeople’s time. So when a manager gets personally involved in a deal, it’s a deal that a customer could say no to, walk out over and we wouldn’t care. Because A – I could sell it to the next guy for more,
…and B – you’ve taken up enough of my salesman’s time and I need him to wait on people who CAN or are more willing to BUY today.
Also, to the previous commenter who had a son who sold 5 or 6 cars a day: 10 cars a MONTH is average, 15 is good, 20 is great, 25-30 cars a MONTH is a bona fide super star. 5-6 a DAY is impossible.
Also car people can make great money, the first time I made 100k I was selling and I ws 21. I was also working 75 hours a week non stop and was very good at what I did and made sure my customers were happy and came back.
MOST IMPORTANT NOTE – More people are out to screw the car dealer than the dealer looking to get over on any one person. As I moved up in the business I learned about all the tricks the general public like to play on car dealers and car dealers hear about 5 pitches a day from people selling US stuff and from trades that were misrepresented to people falsifying loan applications to a million other things.
Also, we didn’t try to make a lot of money on old ladies, minorities, young people, or single women. We tried to make a lot of money on EVERYONE without discrimination.
ps – 99 percent of dealers pull a carfax BEFORE they trade or buy a car. Carfax advertises that they want you to ask for one, so that the dealer can pull another one. Car fax charges $25 for each pull.
ompany. That will show the CLAIM history of the car. A LOT of fender benders happen on parking lots or the owners make it between themselves that are never called in to the police, so carfax will never know the details but the CLUE report will show it. How do I know? We bought a hummer when they were hot and of course paid cash as dealers do, and of course pulled a carfax before hand. Then when the car was sold the insurance company pulled a CLUE and found out it had been totaled and rebuilt. That was a 35K lesson.
pss Dealers have networks of used car buyers who go t auctions and buy/sell cars to be retailed. This includes “program” cars that were rentals and off lease. Program cars count for 80 percent of the used car market. Ask who the previous owner “WAS” was probably annoying for the salesman dealing with a guy who didn’t know ANYTHING about buying a car but he should have at least tried to find out and then explain.
You sound like one of those assholes that sits in the tower mouthing off customers, admiring your gold chains, ignoring hygiene and screwing salesmen out of commission.
Take your four-square worksheet and shove it up your tail pipe.
I went to lease a KIA FORTE SX from one of the dealership in Ottawa, and the sales man told me that because i got refer from a friend of him he will do his best to get me a family deal that he will get it for himself if he would lease the car, he came up with 393$ tax in with 0$ down saying this is the best deal for me, and then he came up to me saying the first payment will be 1062$ including taxes and the first payment and i was like there is more then 600$ additional what is this for, he said this is the security package, including wheel locks, and reduce insurance on you car. I believed him at the start, till I visited another dealer that he gave me price of 390$ plus my first payment is 445$, I was what about the security package, the salesman replied, there is no such thing and he through wheel locks for me for free.
Do you research before u jump to any deal
Hey Alan, I apologize if this comes off as self-promotion…but, in this case I can’t help myself and think you’re readers will benefit.
I’ve found you can get the best deal if you eliminate all the sales tricks from a purchase by negotiating entirely over email. Get quotes from several dealers and then start working your way down from highest to lowest asking each dealer in an email to beat your best price. I have free email templates and the strategy laid out in detail on my site: http://www.findthebestcarprice.com
I really hope this helps!
.-= Car Negotiation Coach´s last blog ..Cash, Credit, or Finance – What will get you the best deal? =-.
Yeah, that’s what I’ve done and it works great. Of course, that’s for a new car. With a used car you can never be sure that the vehicles each dealer is talking about are actually equivalent.
The dealers around here (Atlanta) won’t answer email. Many times it comes back undeliverable ;-(
I’ve been reading “The Predictioneer’s Game” by Bruce Bueno de Mesquita and he believes the best tactic for buying a car is:
1. Research the car you want up front, including options, color, accessories, invoice cost, etc.
2. Find all the dealerships within range of where you want to travel to pick up a car.
3. Call them one by one and tell them you will buy a car that day from the dealership that gives you the best price, including tax and fees (real and made-up). Make sure you tell them all that you are giving all the dealerships the same call and speech. And that the price they quote must be the price you write on the check.
4. Buy the car from the one that gives you the best price, if it is in line with what you would have expected to pay (e.g. don’t pay the lowest price if it’s $5000 over invoice, just if it’s close or lower).
This forces the dealerships to compete with each other and they can’t use their other tactics to try and wear you down.
I like it how every body got so defensive here on buying a car, every single person out there shopping for a car give me the i’m shopping around for a better price god damn you all, you start off dealing by saying i’m gonna cut your pay check in half and i don’t care about it. and you expect to have respect from the industry ? hahaha as a car salesman i make the better deal to the people who i could rip you off the most as for the people wanting to buy for the lowest price possible and doesn’t care about other or the service they receive. i don’t want their business or i’ll try to rip you off with every trick in the book and you all only you will have brought this on yourself.
And this is why nobody likes the car business. You clearly don’t realize it, but the car sales industry has earned it’s reputation from garbage service and dirty tricks. EVERYONE is looking for a deal on EVERYTHING. This is common sense. Nobody should feel guilty about that. Just because you want a fat paycheck, it doesn’t make what you do right or honest. Clearly you’ve made the decision to sell your morals and soul for a few extra dollars. Only you can make that decision, and you have to live with the consequences. But to say it’s the customer’s fault because they want a good price is hilarious. Your industry is generally dirty, and the people who choose to work in that line of business are also similarly dirty people with no conscience. It’s a running joke; until proven wrong (and it’s rare), the natural presumption is that a car dealer (and thus car salesman) has no morals and is there to screw you over. Don’t get angry when people tell you this, it’s an earned reputation.
Right on bro! The best is when you screw over your relatives and friends! Referrals are the easiest pockets to rip off. They still have a huge smile on their face.
We don’t need all those morons that come in with a big folder full of consumers report new car buying guide print outs.
We’ll play the Door-in-face technique, the low-ball switcheroo, and every other trick. Heck, i create my own bonus by coming up with new junk fees on the spot. Once I created 5 new junk fees off the top of my head and just added them to the price. BOOYAH!
Go to overstock website, click “cars” and build your car with all options you want, print it, and dealer will have to honor it. go to truecar website and look at invoice prices and what everybody else is paying. go to carsdirect website to buy or see inventories and used/new prices (or get a proper number in your head). dealerships hate carsdirect because you pay way less than the dealerships charge and then you take delivery at a dealership and they have to sit and watch.
When I have a bad day at work i have a routine I use to wind down. I like to find a crooked type dealership, choose the worst looking crook, in the room, and work him over on a car on the lot for an hour. I get him down usally 25-40% from list price, then decline the deal as the price is too high. When I get home, my day is much better.
Rule of thumb: When a dealer gets a car in, the tend to pay about 40-60 % of what they think they will get for it. so a 5000.00 car actually cost them 2000-3000 bucks.
this car can generally be had for 3500 if you work them over well. Their game is based on ONE principal: YOU dont know what you want to buy, OR what its really worth. this is where your homework can really pay off.
Mayfield Toyota in Edmonton AB tacks on the bogus “ETCH” fee. I will never buy another car from Mayfield Toyota in Edmonton, and I’ve bought 7 Toyota vehicles.
Buying a car just make you feel like you’ve contracted the “slime disease” from the dealership. It’s a horrible experience.
.-= Duncan ´s last blog ..Save Your Money =-.
I guess theres a few ways of looking at it. If your purchasing a second hand car, I think sometimes a $1000 over-pay isn’t that much in the scheme of the lifespan of the vehicle. In terms of total cost of ownership, the original buy price will probably become negligable. Unless you intend on performing all labour on the car yourself, two services in the space of the first year will likely absorb any up-front saving. If your car was manufactured in another country, that cost could double on basic replacement parts like wearing clips and hoses. That said, the car dealer probably won’t see any of these follow-up expenses, so he has to make maximum possible dollar at the initial point of sale. Additionally, as most car dealers will offer a limited mechanical warranty, they also wear liability for selling lemons. So, I guess what I’m saying is being a used car salesman is probably a pretty shitty job where you have to sell cars that you don’t know that much about to people you will never see again who expect quite a lot of knowledge and bottom dollar. Also, from my experiences, cheaper car yards have sleezier looking guys that have less and less knowledge about the history of their cars and become far more comfortable assuring you that the car is excellent, even as it blows clouds of smoke out while attempting to lurch up to street speed. So, yeah, if you go to the cheapest car yard in town expect to get the cheapest car too.
Good article but to make it really stand out, you point out the name of the dealership in bold.
Biggest scam, I’ve ever seen: Dealer sells my friend (we were 18 at the time) a used 1980 Thunderbird and gives him a 1 year or 10,000 mile warrenty on it. The paperwork stated the car had 70,000 miles. When we got home, we noted the odometer was at +80,000. He was a walking disater and totaled the car within a week. Tom, I hope you’re still kickin’ man!
Dealers make the most profit when someone really wants a particular car and isn’t thinking about how much it will cost them. Turn this around with something they really want – I don’t sell cars but it’s a safe bet that they would like to make a quick sale without having to spend hours on an indecisive and uninformed buyer. Start by telling them that you are prepared to buy the car immediately if you agree on the price, give them a low starting price, and make them work to move it up.
If you want you can even take notes of all the tactics other salesmen have used and bring some of them out yourself
One salesman we talked to started asking us if we just don’t like him – I would love to see the reaction if you turned that around.
My favorite is our local Hidey Honda dealer
in the Dayton, OH area having a seperate invoice on the window of Pilots listing mud flaps for $199.00. When I told the salesman that these come from the factory as part of the actual body and are included in the structure he actually said he knew it but the cost stands.
LOL. I just visited Hidy Honda last week to look at the Odessey. Great van, but the used models they had in stock weren’t the greatest. I’ll keep this in mind if we go there again. We’re looking for a used car though, so we’ll just visit whichever dealership has the right car at the right price.
.-= Ryan´s last blog ..The Debt Snowball Method for Reducing Debt =-.
So, it’s my 20th anniversary and I figure my wife should have at least one brand new car in her lifetime. So we heads down to dealer row with her used micro car. Try out a Neon first. Not too crazy about it, but it would do. Had asked the salesman to have our car evaluated to trade in while we were test driving. Back at the dealership, I asked what the net price, less taxes, was going to be.
Salesman: “What do you mean?”
Me: “What is the price of your car less what you will give me for ours?”
Salesman: “Well, how much do you want for your car?”
Me: “What difference does that make? How much have you decided it is worth?”
Salesman: “Well, I need to know what you want for it.”
Me: “Oh, for crissakes! Never mind that for now. Tell me about your low-interest car loan promotion. Pretend we don’t have a trade-in.”
Salesman: “Well, we have a 5% plan, a 2% plan and a 0% plan.” And it works out that the lower the interest, the higher the cost of the car!
Me: “So it is all bullshit then?”
Salesman: “Well, I wouldn’t say that!”
Me: “Bet you wouldn’t. We’re outta here.”
We go a block down the street to the Toyota dealer. Ask the same questions.
Salesman: “The car you like costs this much. We will give you this much for your car.” He works out a comparision between lease-and-buy and a straight loan (loan was better) and we had a new car. I’ll be going back there for sure.
I only buy new cars and it has the advantage that no matter which dealer I end up buying from, it’s the same car, same extras, same everything.. so I just let them haggle it out over the phone and email. And I usually get the car I want for $4-5k less than the first offer.. this is what I do..
For starters I buy in December/January where it’ is effectively last years model. That doesn’t worry me because I am going to be holding onto the car for 7+ years and whether it looks (on paper) 7 or 8 years old is of no consequence by then.. eg. maybe because of this I can lose $1k on sale, but I have saved many times that on purchase.
I go into a dealership or two and test drive the car, identify exactly what model, color, extras, etc.. that I want. It’s here that I love watching the song and dance that they do, like making you wait, like calling up their manager, trying to get you to take useless and expensive extras like paint protection, financing, etc.. I just sit there patiently laughing to myself and watching the show. Then I eventually walk out! There is no way I am buying that car that day! There is NO offer they can make! If you are in the dealership making this deal, you are not getting the best deal. Period!
I then go to the big new cars websites and submit the exact specs I am after. Usually about 6-8 dealerships will get back to me and each will go lower than the last. Remember this is the time of the year that they want to shift that last years model, and I am honestly going to accept and pay without their finance, immediately.
I usually get the car with $1-2k of extras for slightly less than the stock standard RRP, and that means no dealer delivery (normally a couple of thousand) or other fees they try to hit you with. All up the drive away price is typically $4-5k less than the quote given at the test drive!
So don’t fall for the “he’s your friend act” at the test drive.. friend’s wouldn’t ask you to pay $5k more than you had to!
Great tips. My wife and I are shopping for a used vehicle right now. We have currently narrowed it down to two models and will be driving a couple more before deciding which make/model we want. Then it’s off to find the best car for the price. I’m not looking forward to the BS, but I’m not afraid to walk out and save the purchase for another day or another place.
.-= Ryan´s last blog ..Dave Ramsey Financial Peace University Overview =-.
Never sign ANYTHING, until you absolutely have to. I had an experience where I had to get law enforcement involved, and still ended up with $1000 out of pocket. We signed a tentative sales contract, subject to dealer’s inspection, as it had just come into the lot. The next day we stopped in to see if the inspection had been done yet (it hadn’t) but the salesman called us into his office because he wanted us to sign a new agreement because he wanted to do us a favour and remove the $20 tire surcharge. Of course, his real reason was that he wanted to remove the “subject to dealer’s inspection” from the agreement, which I didn’t notice that he had removed as well. To make a long story short, we found out that the vehicle had been in a minor accident and was an auction vehicle from out of province, which should have been disclosed to us, but they refused to let us out of the deal. At this point they got very aggressive and were flatly refusing to refund my deposit, or let me out of the contract. I started reading the legislation and found they had contravened at least 2 sections by not providing a “out of province vehicle inspection certificate, and a “used motor vehicle certificate of mechanical fitness” PRIOR to the sale. I also discovered that 2 of the 3 salespeople I dealt with had expired salesperson certificates, which are required by the province to work as a car salesman. The surprising thing for me, was that even with all these clear contraventions, the peace officer that worked the case, still had to negotiate with the dealership to get me out of the contract, and they were still able to keep $1000 of my money. I was also surprised that Toyota Canada would not get involved because their dealerships “are privately owed and we can’t force them to do anything”.
The next time I buy a vehicle I plan on recording every conversation with the salesman, and taking the unsigned contract home overnight to re-read and think about before putting pen to paper.
Wow, this sounds like I wrote it. However, I was more trusting and went thru with my deal, and I wish I hadn’t. I was quite happy driving away my new car. The price wasn’t too bad, I went over my budget somewhat, but I figured this is the first and last new car I would buy. My new adventure came crashing to an end 3 days after I took my car home. The dealer phones me and tells me now that they charged me too little on the car, that they charged me the price of the middle model rather than the sport model. Now I am having a nightmare…most people say that the deal is done and they have to suck it up. I am quite an honest person and this is really bothering me. They say I have to pay an extra $2000 which I can’t afford. I am sick…be very aware people. Looks like I may be heading to court.
Thanks for sharing this story Alan. I have not had this experience before but I’ve only bought 2 cars from dealerships and both times I knew the owners or the salesperson.
Every dealership should know that consumers have choice and they are not just selling a product but a service and an experience.
A diamond ring does not have to be an engagement ring. Right hand diamond rings make a beautiful and sparkly choice. Just make sure you are clear on your intentions if you give a woman a diamond ring!
It’s interesting that the sales arm of the automotive industry wants to try and talk its way out of something it behaved its way into.
Lack of transparancy means lack of trust
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I’m surprised they didn’t capitulate. I’m glad you stuck to your guns. You will get a good deal as the buyer has the upper hand! good luck.
Some sales people like to play silly power games. I would write the ownership a letter, just to set the record straight on how poorly you were treated, the tactics the sales person used, and why you will never go back there or recommend them.
folks, you all need to relax a bit. I work in the finance end of the business, and in my 6 years doing this i have realized one thing, that whether or not you get a good deal has more to do with your perception of the deal than the numbers of the deal itself. if you go in thinking that no matter what you are going to get screwed, then you could buy a car for 3 k behind dealer cost and still not have gotten a “good deal.” Do you realize that most markups are 6 to 8 percent, and that consumer reports says that is what we should make? your typical jewelry, clothing, or grocery store is on a 200 300 or more percent margin, but do they give you discounts? are their employees scum? the business you work at functions on profit, so relax and just go get a car and treat us right, and you will be treated right as well. and stop blogging about car dealers and get lives already. I mean really
The reality is, most people don’t complain about jewelry stores. Why? Because the problem isn’t profit margins, the problem is the widespread scumbag attitudes and practices of car salesmen and the reputation the car industry has earned for themselves.
There’s a healthy margin in a lot of industries. Many car dealers routinely do shady things, outright lie, and don’t treat customers well (especially when compared to other industries).
It’s hilarious that you ignore the facts and tell people to “get a life” if they voice their opinion. You need to get your own life, so you can stop trying to tell everyone else what to do.
You’ve just proven everyone’s point, @jinfinance, by talking down to us, and telling us to “relax” and “get lives”. That’s precisely the lack of respect and bad attitude that everyone is talking about here. Thanks!
Really the dealers have been using the same system for 40 years. Some new car dealerships have toned it down but it the it the same 7 steps to a sale. Meet and Greet, Qualify, walk around, test drive, writeup, close and delivery. They really outlined at http://www.hoopdi.com/guide/
You’ve just proven everyone’s point, @jinfinance, by talking down to us, and telling us to “relax” and “get lives”. That’s precisely the lack of respect and bad attitude that everyone is talking about here. Thanks!
Thank you for the information Allan. Your sort is very interesting to read because you wrote your experienced when you bought a new car and their tactic in selling. When I read your sort, you give an idea to be aware and wise when I have a plan to buy a car. Keep it up.
they dirty tactics won’t take long.Thanks for sharing your experience with us.Last month i buy metaxeirismena aytokinita online and it work good.We had an agreement and it was a trusted shop and when i had car it was awesome.
This is how dealers make a big profit, by nickeling and diming their customers. They put a lot of pressure on customers to buy useless things such as window etching.
Many politicians and mafias are into this dirty tactics as well as greedy businessmen so as to make large of money even though it cause damage to the customers, indeed something must be done to stop this.
it’s really too bad because lots of legitimate car dealerships are getting bad rep because of this.
If customers do their research, and leave reviews, then a lot of the bad business will slowly move out and you’ll keep getting better quality.
It was the same as you got; the document fee. The good part is that I had a mechanical engineer friend with a dealers license. We didn’t give them the chance to play the game. My friend just said no and we left despite their attempts to hold us until the manager comes. Later I learned that their manager was practicing this mental game with them “If the walk out you walk out”.
A while later this friend said he’s going to the car auction in another town and asked me to go with him. He got 4 cars for other customers in addition to mine. Since then I only buy my cars through him.
The moral: Befriend a mechanical engineer with a dealers license
Thanks for sharing your experience with us.”If customers do their research, and leave reviews, then a lot of the bad business will slowly move out and you’ll keep getting better quality”.This all what i want to say.
I bought a new car last year and I feel that I did a fair bit of negotiation with following technique :
1. I started looking in last week of the month when dealers are more ready to make a deal.
2. Researched the model and available pricing online before stepping into the dealer store.
3. I already had a price in mind based on input from carcostcanada and started my negotiation with that. Salesman refused first and I was ready to leave the showroom when he called me again. There was a huge gap (in thousands) and I started bidding my price by $100 and finally I got the car at my original price plus $250.
4. My old car was still in running condition and I played that to my advantage. I clearly said that I can drive this car for another 6 months and come back later.
Please do more research before buying cars – I just went through a very long process of purchasing a new vehicle. Because it is a new vehicle it does not mean that various dealerships all offer the same price for my trade in and not all dealerships offer the same car for the same price. I did 3 months of research before I felt that I could even test drive a car. I looked at used and compared to new and took 4 Saturdays to just look at cars at dealer lots. Three important things to bring: pen and paper and a cell phone with camera.
Sales people that state that they want to work for you to get you the best deal get the following answer: You work here, you get paid here, you do not work for me because I did not have time to interview you and therefore I do not agree to your statement. Please refrain from using it.
I work for me, and I know what I can and want to spend, therefore I trust only myself.
Simple? Okay keep that always in your head when some clever sales person gets in between your ears.
Next statement: All our vehicles are fully inspected. No they are not, but they will before I even put an offer on a used car.
Next statement: This car comes fully loaded. This means more can go wrong with it? Do I get warranty on the fully loaded part or is that a fully loaded pot of crock?
Be prepared to walk away and when you walk away keep walking, do not hesitate. Do not think: Oh it is not meant to be. When you walk the SALESPERSON needs to come after you if he really wants to make a deal, he or she needs to work (remember they pretend to work for you?)
Patience, be prepared to wait sometimes 20 minutes without someone attending to you. I have installed two games (solitaire and tetris) on my cell phone. I have time – if you feel rushed, walk out take a fresh breath of air. Walk around the building or the lot, sit in your car etc. Don’t give the impression you are feeling agitated, that is sales pressure and if that happens kindly ask to come back a next time.
Never ever give out your keys of an existing vehicle or your credit card. If they want to go for a test drive in your trade in…. you go with them. You are in control and need to get that in their head. Oh remember they went with you when you wanted to test drive? If they have your key or credit card they basically can hold you hostage (see: Be patient).
Stay in control – always.
Be polite, be logic, be honest and be strong.
I had one sales person recently tell me straight in my face that I was a liar. Close your brain for these insults, you got them exactly where they need to be, they are getting upset and therefore you are now controlling the situation. The sales person claims the other dealership must have quoted you a different price or different car or made a mistake. They will ask for printed documentation and you are NOT under ANY circumstance obligated to give that. But be honest, if the other dealership offered you a trade-in price and incentives and added value to the deal, be sure to mention this.
If you are willing to pay 350 per month do not fall for the 175 bi-weekly… this is not the same!! This is a deeply rotten trick and they get away with it many times. Your cell phone has a simple calculator function, use it or install it or bring a calculator.
A used vehicle has in most cases the ETCH done at the time of delivery, you do not need to pay for this again – it is however needed to verify that you are now the owner of the vehicle.
Lien checks on the vehicle are not your problem and the dealership should have done this already, no cash out of your pocket.
Read – Read – Read
Safercar.gov – Recently found out that it has a very good list of recalls – verify that these have been performed if you purchase used. If the sales person does not have the information you should consider walking away. CarFax Canada (I live in Canada so I deal with that mostly) can be used to see if the car is free of accidents. But…. At one time I noted that ALL vehicles at the dealer had the same CARFAX information but the header displayed the vehicle….
Don’t just walk away – RUN away.
Lemon Aid – Ah what would we do without Phil Edmonston? First and foremost – take the advice of the book to not trust anyone (not even the Lemon Aid book writer) but trust yourself. Take advice from your research, write down the questions you want to ask and write down the answers. Review the answers and compare – sales people are pushers but remain in control. Claim you need to go to the washroom (restroom) and take time. Claim you need to make phone calls or have a friend or family member call you. In worst case scenario you can claim an emergency – when nothing else works.
Happy hunting folks and remember – you are in control!!