Buying a car can be tricky even if it is not your first time. Car dealers have dealt with many buyers and therefore understand how to twist the car negotiation process to their advantage. They will use different tricks at their disposal to ensure they end up with a great profit that it should be. Here are seven tricks you should watch out at the dealership showrooms.
1. Pushing add-ons and other fees – dealers usually increase car payment price by including after-market add-ons onto the cost of the cost. These are things like a stereo system, alarm system, chrome wheels. The extra cost added to monthly payment affects the final cost upwards.
2. Obscuring a car’s history – dealers will try to assure you they know the car’s history so you don’t ask for the vehicle’s history report. If you ask for the car’s history, and they try to avoid the subject, walk away, because they may be hiding something such as flood or accident damage, odometer fraud, etc.
3. Heavy pressure – dealers take advantage of car buyers who go to purchase a car in a rush. They know that you must walk away with the car eventually so they will try and control the negotiation. They will use tricks like telling you that others want the car so you should go with it; do not believe them, after all you can always get another one. If you notice they are pushing you, tell them you are going to think over and come another time.
4. Negotiating about monthly payments – some dealers start by asking what you are comfortable with, watch out for such a trick. Most of them focus on low monthly payments as it gives them room to inflate other variables, for instance the loan interest and length. While you spend thousands more on the car, it increases the dealer’s profit.
5. Unwilling to accept independent evaluation – after making an offer on a used car, opt to take it to your external trusted mechanic to do an automotive diagnostic before you close the deal with the car dealer. If you notice the dealer disagreeing with this idea, that he doesn’t trust other mechanics with the car, do not make the deal. If the mechanic finds any complications with the car, ask for a deduction from the cost of the car or have the dealer fix the car before purchasing.
6. Mixing negotiations – car dealers will try to start negotiating with the monthly payments as it allows combining the trade-in value of your old car, the financing terms and the price of the car you are purchasing to fit a figure that will make much profit for him. If you have an old trade-in car, they are likely to give you a bad deal on it so they stand to benefit the most. Dealers will make you negotiate the price of the trade-in while still negotiating the car you want to purchase, this is mixing you up and you need to walk away.
7. Finance markup – financing for your car with dealership finance is tricky. They understand the lending rates for major banks and credit unions and they will tend to charge you at a higher rate so that they benefit more.