Tips for Buying a Car from the Dealer
Dealerships stack the chips against buyers. You can even the playing field with these smart tips for buying a car from the dealer.
If there's one industry that has gotten a (rightfully) horrible reputation for ripping off customers, it's the car dealership industry. Car dealers are known for using every dirty trick in the book to get customers to buy cars at the highest possible price.
Most people do not like car salesmen. They do not trust them — nor should they. Truthfully, going to a dealership generally means you will not get a good deal on a car. However, most of us do not have the connections or mechanical knowledge to get a bargain car.
So, if you do have to go to a dealership, it only makes sense to learn the best tips for buying a car from the dealer. Speaking as someone who has gotten a couple of good victories on dealership lots, the following tips will help you even the playing field.
Never go in unprepared — ever.
If you remember any of the tips for buying a car from the dealer in town, remember this one: do not, under any circumstances, go to a dealership without doing research on the car you want to buy.
90 percent of all the tricks that dealers use involve taking advantage of a person's naivete, and taking advantage of how little a person knows about cars. The minute they notice that you aren't looking at any particular car, or any particular group of cars, car salesmen know they're dealing with a sucker.
Knowledge is power when you're going to a car dealership, and you probably already know that. That's why you're reading up on tips for buying a car from the dealer, right? Use that concept to its fullest by doing the following before you even get to the dealership lot:
- Research your cars. Find out the car you want to buy and the average price they are sold for.
- Research your dealership. Don't bother with dealerships that have been written up for fleecing customers.
- Get a mechanic friend to accompany you. If you aren't a car fan, bring a mechanic to inspect the car before you buy it. This way, you can prevent the grievous mistake of buying a car that's actually a lemon.
- Research state laws. Most state laws ban dealerships from lying about what cars they have in stock.
One of the best tips for buying a car from a dealer I've personally heard is to pay via check or cash only.
On the purely financial side of tips for buying a car from the dealer, how you pay is going to be as important as what you pay. Your best bet for buying a new car at a great price is to find an auto loan or take out money from savings on your own before you hit the dealership lot.
Much of this is a safeguard to prevent yourself from being fleeced by a bad dealer. You would not believe how many dirty tricks dealerships will pull out when they offer financing for cars. Some of the uglier ones I've heard included the following:
- Lying about your credit score to jack up the amount you pay on the loan. Dealers get paid based on how much the total amount spent is, not the price of the car. When you're applying for an auto loan, that gives them leeway to get a better paycheck. Some dealers will add fees on your loan and blame your credit score for them as a way to boost their commission. Technically, this isn't illegal, since they are just adding more fees rather than increasing the percentage.
- A lot of dealerships that do "cash only" transactions also typically have lower prices. Why wouldn't they? Loans have a lot of red tape, which makes them harder to process.
- On a more extreme level, I personally had one dealer lie about interest rates to my face. He didn't realize that the pink-haired chick with the corset was a math major at the time. Oops. (Looking back, I'm pretty sure what he was doing was illegal, and I probably should have reported him and the car salesman who tried to do that.)
Also, having cash on hand means that you have more bargaining power. Nothing makes a car salesman happier than knowing they can close the deal that day. If they had a slow month, then they will be more willing to lower the price of the car to get that sale.
Really test it when you're test driving.
One of the biggest tips for buying a car from the dealer I regularly hear repeated by former salesmen is to actually test the car.
While most cars won't die on a dealership lot, if you notice that the car doesn't run smoothly when you drive it, it's not going to magically get better if you buy it.
Additionally, most people don't pay attention to the small detail functions of a car, either. Test the radio, the sound system, the windshield wipers, the A/C, as well as all the other little functions. You need to get all in because those car creature comforts will matter in the long run.
If you notice something amiss, tell the car salesman and ask if they can either fix it or offer a discount. Use every little thing as a bargaining chip.
Don't negotiate on the monthly payment, negotiate on the price.
This is the biggest mistake that people make when buying a car, which is why learning how to negotiate on the right thing is one of best tips for buying a car from the dealer.
Dealers will often talk about monthly payments as a way to distract from the fact that they are not lowering the actual price of the car. Don't argue about monthly payments, argue about the price — and as a result, you'll pay less overall.
Don't be afraid to play hardball.
The car salesman you're talking to is not your friend; he's there to make money. You're not the salesman's friend, either; you're there to buy a car. Remember this, and you'll be remembering a slew of different emotion-based tips for buying a car from the dealer at a discount price.
Stop being worried about hurting the salesman's feelings. This isn't a personal game. It's okay to say no to a salesman, especially if he keeps saying that you should want a different car after you've already told him which car you want.
It's also okay to pull up a car that's the same make, year, and model that's being sold for cheaper elsewhere and tell the salesman that you've found a better offer. This is called playing hardball, and if he tells you to take that offer, then, by all means, take it.
Nothing, absolutely nothing, about the car sale is personal. So, don't be afraid to walk away at a moment's notice. If you don't like the offer or the way they're talking to you, walk. It's your right to do so, and frankly, it's often the best way to make them reconsider your offer.
Have a time limit on negotiations.
This is one of those tips for buying a car from the dealer that is hard to follow through with at times. Of course, that's because dealerships actually do this on purpose.
One of the most common tactics car salesmen use to get people to buy from them at a bad price is playing the waiting game. Psychological studies show that people are more likely to buy something they already feel invested in. By making people wait, they're making people feel invested in the car and builds anticipation.
Your best bet when going to a car dealership is to put a maximum amount of time you're willing to spend waiting for negotiations to be complete. If you can, do negotiations via phone or email, and get it in writing before hitting the dealership.
Additionally, some salesmen use time as a way to wear you down. After a certain point, you will feel worn out from talking — and salesmen will use that to wear you down into accepting a higher price. So, tell them to keep it short and sweet, or let them know you'll walk.
Really read the dealership stickers before you decide to start negotiating.
Many tips for buying a car from the dealer will focus on negotiating, but the truth is that there is a lot more to negotiations than just researching the car online. A lot of the most important stuff you will find will be on the dealership sticker.
Here are the numbers you need to read on every sticker:
- The sale price. This is typically the very large print number with the dollar sign on the bottom of the sticker. If the sale price doesn't match with what they claimed it'd be on the phone, you need to address that.
- The window or online car price. If you notice the online price, or the price written on the window to be lower than the sale price on the sticker, ask for the window price. That's probably way closer to bare bottom and they kind of would have to give you that price. Otherwise, it's false advertising.
- The length of time on the dealership lot. Dealerships do not like cars that are stuck on their lot for months, or worse, years, on end. Car salesmen will often be way more flexible about the sale price with a "camper" than they would with a car that has just gotten onto the lot.
Additionally, if you're looking to buy a new car, go to the dealership at the end of the year. Most manufacturers will give incentives that will help new cars fly off lots in December — and that can parlay into a beautifully low price for you.
Lastly, one of the most time-saving tips for buying a car from the dealer is to mellow out about trade-ins.
You wouldn't believe how many people waste time, money, and effort by trying to spruce up their cars for a trade-in. Bad move.
This actually is a good way to shoot yourself in the foot in terms of negotiations. An overly shiny car suggests that you're ready to trade in your car that day, which in turn makes car salesmen less interested in working with you.
Moreover, detailing your car or getting minor repairs done will not actually get you a better price on the trade-in in most cases. So, this can end up wasting hundreds of dollars on a car that you really aren't keeping for much longer.
Don't sweat your trade-in. Just trade it in, and get a better car.