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 7 Must Know Facts About
Car Buying
Not knowing the facts below can cause you to overpay for
your car by $1000 to $3000 dollars.
1) Doing Car Buying Research Saves Money
It is important for
car buyers to understand the various aspects of car buying
before they contact a dealer. These car buying aspects include:
How to negotiate the key point with the dealers, the invoice
price, the MSRP, the average selling price of the vehicle
in your area, actual price of the car, and any rebate information
on the make and model they are looking to purchase. This
knowledge serves as a powerful tool when talking to the Its easy to overpay
for a car when you don't know what price is too much or
too little. A car sales agent is only driven to make as
much profit off you as possible via your a) actual
car price, b) the purchase price of the trade-in, c) the
car loan, the car extras, d) the automobile extended warranty,
e) insurance or f) anything else he can think of.
2) How Dealers Make a Profit
Every aspect of the
car purchase engagement with you is an opportunity for the
dealer to make some money on his service to you. While there
are many good dealers who ask you for a fair car price.
The goal of some car sales peope is to gauge how far he
can charge you for the car services without having you walk
out of the dealership and not making a purchase. The general
car selling practice used by these sales people is to "give
you the discounts you know of with some hesitation"
and "make money off what you don't know that well."
Let me explain. There is a price point where the dealer
makes their minimum money. If you are familiar with this
price point, and you are in the market for a loan, the car
sales person gives you a better car price, but gives you
a loan with a higher interest rate that fetches him a bigger
premium. (Beware when sales people start asking "How
much can you afford to pay every month. " Getting a
loan for a lower interest rate will let you afford a car
at a higher price. ) It is critical for a car buyer to get
best price estimates on all aspects of car buying before
getting it on with a car sales person.
3) Dealer Psychology 101
Car sales people are in
the business to make money, and you are in the business
of saving as much as you can. There are a few steps car
sales people take to evaluate how to sell you the car.
- First they gauge if you are just window shopping
or are actually a serious buyer. Wasting time after
a non-serious buyer takes their focus off actual buyers.
- If you are a serious buyer, they get to work: They
then determine how much research you have actually
done, how much are you ready to spend (or can afford),
and what kind of car add-ons you will be buying. The
more you are willing to buy from them, they are more
willing to spread their profits across the different
things you are going to buy from them.
- As they are learning about you they work hard to
build a relationship with you. Sales is about people
not so much about price. Some real seasoned sales
people build this report with you so that they can
"be on your side to get you a killer deal from
their tough bosses" - Classic good cop bad cop
salesman strategy.
- Next they determine your strengths and weakness:
If you have only researched car prices, they give
you a great deal on the car price and make money off
your trade-in and car loan etc.
- After this they apply principles of sales psychology
on you. ie They may divert you to buy a bigger car
(which you may not have researched - this has 2 purposes
- test to see if you have more money to spend, and
also potentially sell you a higher ticket item), have
you add extras to the car (telling you that your car
is not complete without it.), create a "only
2 left" urgency about the car you want, or may
even do the "pity me" sell bringing in how
they are loosing their shirt selling you the car,
but need to do that to feed their family.
4) Getting Online Quotes From Websites
There are now hundreds of automobile
online sites. Each offering its unique twist to the world. Below
is a summary of all these site types and what they offer.
a) Research Sites -
These offer through research on automobiles
b) Spam Sites - These sites capture your name
and misuse your email address and contact information to make
money.
c) Lead Generation sites - These site's main
objective is to collect your information and sell to automobile
lead aggregators no matter who they are.
d) Auto Pricing Sites - These sites enable you
to come up with an estimate of your car costs based on your preferences,
and then sell your name to the dealer only to get a commission
from the dealers for having brought in a sale.
e) Fake Promises Sites - These sites claim to
have some inside person in every dealership who will give you
that extra discount. - Think about it.. there are 22,000 new car
dealers in United States do you think its actually possible?
f) Genuine Helpful Sites - These sites actually
give you the truth about the automobile industry and help you
make the best possible car purchase at the right price. The tips
and resources available at these sites will save you money and
the dealers with which these sites work with are genuinely interested
in giving you that internet purchase discount. (We happen
to be one of these sites)
5) The Actual Car Negotiations
No matter what any dealer says or offers, it
is prudent to shop at least 2-3 dealers. There are many reasons
for this. Some dealers get bigger kickbacks from manufacturers
than others, some dealers have a surplus of some cars while others
do not, some dealers make their money selling volume rather than
jacking up the car price of just a few cars. You are advised to
spend at least 1 hour at each dealer test driving the car, building
your case for a good deal. You must let the salesman know that
you are an educated buyer who knows that the dealer needs to make
money, but are not willing to be taken for a ride on the deal.
Your research on invoice price, estimated market sale prices of
your desired car, lowest loan rates etc. must make it clear to
the dealer that you mean business and that you will not stand
for any games. I also recommend you walk away from the lowest
price they offer you on the first day of car shopping. Like clock
work, one or all dealers will call you back with a counter offer
to the lowest deal you negotiated the previous day.
6) Your Negotiation Skills Matter
While this is an optional suggestion, its highly
recommended. You know yourself best. If you have felt that you
have been taken by fast talking people in the past, it may be
wise to get a friend, relative, or colleague who knows how to
negotiate. With your research, and this person's tenacity you
are all set for a great deal.
7) Your Level Of Confidence Makes A Difference
In a dog eat dog world, the dog with the strongest
presence wins. Be confident when talking with dealers, know that
you hold the power, and know it all with the information you have
learned at this site. The strong preys on the weak, and if you
show yourself to be strong, you will come out a winner and won't
be a victim of over pricing.
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With the above knowledge, you are ready to use my "Car Dealer Minimum Price Finder" Tool.
Good luck, and let me know how it went!
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