The Ultimate Car Buying Guide and how Dealers are......

ruining the okay buying experience...!
My wife recently fell in love with a specific car, the make and model of the car is not important, what is important is the lessons I learned in my research to purchase this car. Since this applies to all make and models I will not be specific. For disclosure reasons Ill let you know up front that we looked at Toyotas mostly and that I do not work for Toyota or any car manufacturer or in the automobile industry.
Dealers are ruining the buyer experience on okay! They have started to use okay the same way they use your local paper, they lie about prices and incentives to lure you in to the dealership then once you are in the showroom they make every attempt possible to force you to pay as much as possible for a car. In the end you need to have the courage to WALK AWAY from a deal, but even then they have tactics they employ to keep you from walking away. I spent 3 and a half hours at dealership only to walk away when they threw in a bunch of junk fees prior to closing the deal. First I will address okay specific issues then I will get into generic solid advice for dealing with the rats and their bosses at the dealerships, sorry if thats a bit offensive but like I stated earlier, these dealers are ruining the okay shopping experience.
Classified ads versus buy it now or auction formats, I have gee to the conclusion based on my personal experience that 90%* of the cars that dealers advertise as available are in fact sold or simply not available at the price they advertise on okay. When you call them they may say the car is on the lot only to have you run across town some story about the car being sold or reserved but they have a geparable one available at a similar value. Did anyone say BAIT and SWITCH???
Dealers have started to add wording to their listings that will significantly increase the price of your purchase. Be careful of words in listings such as Freight Charges, Dealer Fee, Loan Processing Fee, Marketing/Advertising Fee, etcThe only fees you should pay are Tax, Tag, and TitlePERIOD! If not WALK AWAY!
Check the dealer rating prior to them going to an all classified format, if they have a low rating, less than 100*, then check when they registered. You will se a trend almost immediately. Many dealers have opened new accounts under multiple names once they burn out an account. They cant get away with scamming buyers, we report them through feedback and they are doing their best to avoid a long history of bad service.
The up sell, extras or options racket. These unscrupulous dealers will try to sell you items that gee standard with the car. They add it to your contract. DEMAND they be removed, or if you know for a fact that it was include in the okay posting then point it out and demand they leave it in. When I did finally buy my wifes car, the dealer wanted to charge me $249.00 for the floor mats. They included them but when I got home I found the exact mats on okay for $90, postage included.
Finally, and for okay buyers this is important, if you purchased the car on okay through and auction or buy it now and when you get to the dealer only to find that they will not honor the purchase price as your OUT THE DOOR (OTD) price, WALK AWAY! Anything above The sale price, tax, tag, and title is an abuse of the consumer and they need to learn to do business in the medium of the electronic age.
Major dealers are accustomed to a win/win when they sell cars, meaning that the dealer will always win when they sell you a car and then they win again when they sell you a financing contract, you didnt think I meant the customer wins too, did you? No, you will lose no matter what it just depends on how much you will lose, it all depends on your state of mind when you walk into a dealer. Always walk into the dealer willing to WALK AWAY if the deal is not right. Lets go over the typical dealer scams:
Lets start with my favorite...Hidden costs! Look out for dealers that pull the "freight cost", Marketing fess, or What ever you want to call it! fees they will attempt to add on to the sale. For example, you see an advertisement for $9000 (plus tax, tag and title). When you get to the dealer and try to buy that vehicle for that price, they start adding in all these special fees and before you know it your $3000 to $4000 in over the advertised price. If the dealer insists on having you pay their freight costs WALK AWAY, if the dealer wants you to pay any type of advertising costs WALK AWAY, if the dealer will not subtract the administrative fee that is preprinted on to the contract to give you the perception that its a standard fee, WALK AWAY!!! Usually Taxes, Tag and Title are about 10% of the purchase price. Bottom line is a $9000 car shouldnt cost you more than $9900 out the door. The ten percent rule is a number and you should keep it in mind when you sit down to close on your new car.
-------------------------------------------------------------------------------------------------------My wife has pointed out to me that the WALK AWAY theme is starting to get annoying. So I am going give it a break. But let me make this clear, Dealership Owners, Sales Managers, and Sales Men absolutely hate it when they cant close a deal. They will do their best to hide that fact, they will give you the perception that youre just not being reasonable and that this is the best they can offer. If they see the situation get really hostile they may even walk away from YOU. The truth is that walking away is the worst situation that can happen to a dealer. The sales men get in trouble if they have too many, the sales managers get in trouble if their teams have high percentages of walk aways. The Dealershipsspend tons of money of to get you their and a walk away is a catastrophic failure in their marketing or sales strategy. Behind closed doors they obsess over walk aways. Their attitude is if you came all the way from your home to their lot and took time out of your day to look at a new car, there is no reason in their rationing why you shouldnt go home a new or used car and a contract in your hand. So I will stop beating this into your head but remember, under the fancy lights, expensive cars, over caffeinated sales force, and false promises. YOU HOLD THE POWER, all you need to do is be willing to walk away.
-------------------------------------------------------------------------------------------------------The "$99 down and $99 per month" to get you into a brand new car.Sounds too good to be true because it is, the only problem is that the $99 per month is only for the first 3 to 12 months! Then, the payments balloon for the remaining 5 to 6 years. What makes matters worse is that you are paying more interest in the remaining months to cover the artificially low payment in the first months of the contract. The No payments for a year" game!The problem with this promotion is that since you have no payments for 12 months, you are also not paying down the principle balance of the loan. Vehicles only go down in value.... they only depreciate. This poses a real "Catch 22" for you when you eventually want to trade out of that vehicle. Since you have delayed paying down the amount owed on the unit and at the same time it is rapidly going down in value, the chances are quite good that you will owe a significantly higher amount than the vehicle is worth at the time you want to trade. This type of promotion preys on the human emotion that we can get something for nothing. The Auction Tent, Bank Repossession sale or the "$49 Acquisition Sale".Some dealers advertise an Auction Tent sale, Bank Repossession sale $49 Acquisition Sale. The implication is that you are going to take over an existing loan for a small fee or you will be buying a car that has been repossessed. The reality is that you are just buying a car the normal way. You may be asked for a larger down payment and will be starting a brand new loan. Most of these sales use professional "closers" that use high-pressure tactics and tricks. For example, you might be presented with a "four square" deal. You will be shown a payment that is extremely high and a down payment that is very high. You will also be shown very little for your trade and a short-term loan. The idea is to "shock you" into paying either more down, more payments or longer terms or take less for your trade. It's the old idea to "start you high and scrape you off the ceiling". A dealer might average over $4000 above profit, thats profit added to their already marked up car, per deal with this so-called "sale". The "We'll pay you $3000 over what your trade-in is worth".The way this works is very simple. A dealer will build an additional profit into the sales price to allow you a guaranteed amount. For example, if the guarantee is for $2000, the dealer will mark up the vehicle he is selling you an additional $2000 to cover that amount. If your trade is truly only worth $2500, you will be allowed $4500 "on paper". The reality is, you are paying for the guaranteed higher value of your trade in the form of a higher sales price. It's just a "shell game" with the numbers to get you in the door. The retail prices are not posted on the vehicle. Some dealers don't post the price on the window because every customer gets a different price. Normally, when you ask a Salesman the price of a used car, he responds with a question like: "Do you have a trade?" If trade value is an important issue to you, he will build an additional amount into his sale price so he can give you more for your trade-in. His intent is to find out as much information from you to determine how he can maximize his profit on the deal. That is why the last thing you will get from him is a price. "We Will Pay Off Your Trade, No Matter How Much You Owe"The fallacy here is that all deals are structured this way. You will always pay back the balance of the loan on your trade-in, with the new loan. If you trade in a vehicle with a balance owed to any bank, the new amount that you borrow on your new vehicle will include the deficit balance on the new loan. The final amount borrowed may also be affected by how much down payment you make. Check your paperwork. That payoff balance on your trade does not just disappear. "Just Take Over the Payments" SaleBy advertising this way, you are lead to believe that someone has already paid down the balance on the loan and you are getting a great deal. Not the case. You aren't going to take over anyone's payments but your own! There are very few Banks that allow someone to "take over the payment" any more. Many years back, it was done on a very small scale. The deal is that you will be getting a new loan, not take over one. The "Slasher Sale"Typically, a tall fence is put around the entire inventory. The idea is to build "hype" that only certain folks will be allowed in (did you get an invitation?). Once the gates open, the Price Slasher writes the discounted sale price across the windshield. The catch is that the new price is probably higher than the price that was on that same car yesterday! Most of these sales have the same type of high-pressure closers that were described in the Auction Tent, Bank Repossession or the Acquisition Sale. "Manufacturer Rebates"Now this is legit. You really do get a rebate from the Manufacturer and it doesn't cost you a dime......not right away. The truth is that this is the Manufacturers way of saying "my price is too high, so we're going to adjust it." That's fine is the short term, but think about what that does to the price of that vehicle after you drive it off the lot. Not only do you suffer the normal depreciation, but you also will suffer the amount of the rebate. Your "new" car is now used, and is worth much less. The used car market will adjust to the rebate as well, when you decide to trade. The real shame is that new car prices (M.S.R.P.) have actually risen over the past year and normally do throughout any year. Why would a manufacturer raise the suggested retail price (M.S.R.P.) and at the same time offer a rebate on it? Because they have conditioned the buying public to buy when there are rebates and this allows them to slowly increase the new car price over time. Keep in mind that if you manage to negotiate a good price on youre the dealer may have signed that rebate over to them. You will know you did when you sit down to sign your contract the finance officer, who is in on the racket, will tell you that they have given you a huge discount based on you sales price therefore the incentive or rebate stays with them. If you believe you are getting a great deal then go ahead and sign away your rebate. If not.then.lets just say you should move in the opposite direction of the dealer using your feet. Their I didnt say it! All Credit Applications Accepted or no credit application refused.The wording wants to make you think that the lending institution will automatically approve your credit. The dealer wants you to believe that you will get a loan, no matter what your credit status is .....and that is not true. What it really means is that the dealer will accept a gepleted application from you and try to get the loan approved. Credit approval is not guaranteed. The dealer wants to imply that they can do something that another dealer can't.
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*Percentages and numbers are not scientifically generated norhave they been evaluated by by any consumer agency, they are strictly the opinion of the writer.