It just so happens that springtime is also when loads of shiny new cars are stocked up for sale at car dealerships. Nice weather means more sales. For today’s topic, I’m going to write a bit about buying a car from a dealer.
First, you need to identify a car that you want. If you have no idea, a sales person can help you. If, however, you get some sales person who insists on money down before they’ll show you anything or let you get behind the wheel, you need to just turn and walk away -it is acceptable to scoff first, if you feel like doing so, but then just shake your head and bid them adieu. That’s a red flag that you don’t want to be dealing with that sales person. A good sales person will be happy to let you take out a couple of their vehicles and can tell you all about them, too.
A test drive isn’t just about taking a car out to see how fast it goes or how well it can corner (on two wheels). You need to get a feel for the vehicle. After all, the car you’re testing could be your next major investment, and you’ll probably spend a decent sized portion of your lifetime inside that thing. When you’re behind the wheel, feel around. Are controls in places where you would easily be able to find and use them? Is the layout of the dash intuitive? Does the car seem to meld to you as an extension of your own body? Does the car have the features you want? It’s hard not to be dazzled by new cars with their ever-evolving technologies, but don’t let impressive new stuff blind you to function. Touch screen displays look cool, but if you have to use one to adjust your stereo or climate conrol, you’ll quickly hate having to take your eyes off the road to mess with that instead of just operating it via a big, easy to find knob or dial that lets you adjust settings based on feel and muscle memory.
Features are an important part of car ownership. You can skimp and save some cash by skipping the heated seats or some other creature comfort, but things like that make the time you spend in that vehicle more enjoyable, more tolerable, and more comfortable. If there’s one thing you really want on a new car, but you can only get it by purchasing an expensive package upgrade, there’s a good chance that the dealership’s aftermarket department can hook you up for less money.
Here’s something else, too: the leather upholstery that an aftermarket department can install in your car is usually a higher quality and more durable leather than most car manufacturers use for their factory option leather. Don’t be afraid to sit down with the aftermarket person and put together your own trim package. Heated seats too.. Most factory seat heaters have maybe three settings, but aftermarket kits can be installed with butt and back heat elements and 10 settings to more perfectly match the temperature you want. Need a roof rack? See what it would cost to add it on and roll that in with the price. At least then, with aftermarket stuff installed at the dealership, you know it’s getting installed correctly and in a way that’s not going to void any warranties the car comes with.
Aftermarket stereos are a gray area for me. On one hand, you can get a custom sound system for a good price, but the downside is that an aftermarket stereo is waaaaay more likely to be stolen out of your car than a factory set up. If you like a good sound system but don’t want some dirtbag smashing out your window and tearing your center stack apart, springing for the premium factory sound system might be your best option. There’s some wiggle room on aftermarket pricing too, so if there’s a car that you like, but for some options you wish it had, don’t commit to it before talking to the aftermarket people (every dealership has them and they can put stuff on their new and used cars). My point is, get the options you want in your car right away. Every time you use that seat heater, crank up that THX certified sound system, or crack open that sun roof, you’ll be glad you got what you wanted.
The most important thing to think about when buying a car is this: What is it worth to you? NOT “what’s the cheapest price I can get this car for?”, and not “did so-and-so get a better deal than I got?” The best way to avoid buyer’s remorse and vehicular resentment is to do your research ahead of time and go into the dealership with a number in your mind of what that car is worth to you. How much money would you part with to have a car that makes you happy and proud? How much to have things that are useful and comfortable? What is the worth of having the capabilities that the vehicle you’re looking at offers? It’s hard to put a number on emotions, sensations, and hypothetical uses, but you need to do it.
When you’re negotiating, go ahead and let the sales person and the aftermarket person know what you’re after. Cut to the chase and tell them what you want. Be blunt, but understand that they aren’t about to take a loss on a vehicle for you. They have expenses and employees to pay, so they do need to make some profit off you.. Hopefully not too much, though. Go ahead and tell them: “I really like this car, but I wish it had X, Y, and Z. If you can put together a deal for me where I can have this car and the things I want added to it for $XX,XXX, then I’ll be happy to buy it from you” (if you’re financing, then make sure to add that this is contingent on financing, and what APR you’ll be dealing with).
Financing too, has some wiggle room. Dealerships have in house financing people, and they shop you around to lenders to get a loan with a low APR, but they too need to get paid, so they add some points in on that for themselves. You can get them to drop one or two of their points if they think the deal will fall apart without it. After all, a smaller piece of something is better than a big piece of nothing. So, after you’ve agreed to a price in exchange for the car you want with the options you want on it, that’s when you start fretting about the APR -I mean, don’t really worry about it, after all, you can always walk away from the deal, but fret for the benefit of the sales person, their manager, and the finance person. Don’t get grumpy, but rather, act hopeful that you can put this deal together, and Gosh! Wouldn’t it just be an awful deal breaker if the APR is higher than what you’d be comfortable paying.
In fact, it’s not a bad idea to act a bit disappointed with the first APR that’s presented to you. If you brought a friend with you to the dealership, that’s the time to crease your brow and tell the sales person that you just don’t know about that APR and want to consult your friend. Then, walk over to the coffee maker/magazine/waiting area and don’t overdo it, but make a show of shaking your head and shrugging like there’s just nothing to be done, and you’re oh so disappointed about it all while your friend tries to console you and tell you that there are other cars at other dealerships, and perhaps today is just not the day for you to buy a car, etc. You may find that suddenly, the finance person has just found out that there’s a late-comer to the lending game who has an APR that just happens to be a point or two lower than what they just told you was the best loan they could find for you. Amazing how that works!
Depending on what time of year you’re buying, you may get a better deal, particularly on new vehicles. Those sales can vary quite a bit depending on what manufacturer incentives are available at any given time. Typically, fall or winter is a good time to buy, because that’s when the next year’s models are hitting the show room floor in droves, and dealers will want rid of the current year’s stock. With a few exceptions, your average new car sale is going to be what’s called a “mini” for the sales person. That means that there isn’t enough meat left on the bone after all is said and done to really make all that work worth the time and effort so it’s a flat $100 commission for the sales person. Typically, a sales person will get a monthly draw of anywhere from around $1,200-1,800, and they get to keep 25% of the profits (the difference between what the dealership is into the car for vs. what it sold for) of each sale. Initially, that 25% goes toward repaying the draw. That percentage increases by one or two points depending on the number of cars the sales person has sold so far that month. On a mini deal, the profit margin is under $400, so in order to even keep a sales person interested in making that sale, they get a flat $100 or so for their trouble. Mini deals suck, but there are a lot more of them than you’d think, and most of them involve brand new cars. Trucks, however, are a different story, and in fact, the very first vehicle I ever sold, my first day on the floor was a loaded up dual-wheel F-350 truck that netted me about $1,100 right off the bat. Later that same day, I sold another brand new car, but that ended up being a mini deal and only got me $100
I once dealt with a couple who, after the deal was signed and closed, told me the strategy they came in with. Their plan was that the first 2 times I came back at them with a counteroffer, the wife would start crying and bemoaning the fact that they just couldn’t afford this car she wanted so badly. Well, it’s always good to have a plan, I guess. Really though, a good deal can be had on a car with far less drama than that. Hopefully, if you’re thinking of getting a new or newer ride, this post has given you a bit of insight and will help you to have a happier car buying experience.
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