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Most people are too naive to realize what is happening when they are being sold a car. They are not thinking like the salesman, who has been there every single day for the last umpteen years dealing with customers just like them.
Warning: when you're in the parking lot of the dealership, it's you vs. the salesman!
Sooner or later everybody has to buy a new car. It doesn’t matter if it’s your third new car or your first, it is inevitable. Of course, everyone knows that there is an art to buying a new car that everyone must know sooner or later.
Every car buyer knows that there are tricks to getting a car at a reasonable price. Dealerships and private sellers rarely mark the car’s actual worth. Instead, they mark the price up a little so that they can clear a good profit for themselves.
Some dealerships mark the prices up to be able to offer their salesmen better incentives to sell the cars for them. Whatever the reason, almost all dealerships can be talked down on their initial prices, if you know how to haggle properly.
The savvy buyer will know that they can talk the dealership’s prices down a little bit, if he/she knows the dealer’s lingo and tricks beforehand and shows that he/she are prepared to deal with them.
Salesmen are there to try and hustle a good price for the company, while you are trying to hustle a good price for yourself. If you have ever wanted to get your money’s worth out of buying a car, then this will be your comprehensive guide to getting through all of the bull and getting a car at a good price.
Most of the time, it isn’t even just the deal of buying a car that is the problem. Dealers and salesmen have a way of getting extra money out of you for the “extras”.
Many people don’t even realize that they purchased the extras until it’s too late.
Salesmen speak their own language, and to know when you are being sold on something that you don’t want, you need to know how to speak the same language as the salesmen do. This guide will teach you how to get through that barrier once and for all so that you will never again be oversold on a car or anything else you want to buy. In this guide you will learn:
How to spot a scam from a dealer or salesman
The best time of the year to buy a new car
How to get a good purchase price
Get tips to financing a new car
How to give your opening price
Buying a car doesn’t have to be scary and it doesn’t have to be the worst experience of your life. Many people dread buying anew car because they know that they are likely going to get ripped off.
You don’t have worry about it anymore because this guide will teach how to avoid that very problem.
- So You Wanna Buy A Car
The first thing you need to realize when going to a dealership to buy a car is this. The salesman's agenda is to make the best commission possible. Your agenda is to get the best deal possible. You must understand this mindset
So You Wanna Buy A Car?
The first thing that you should know when you want to buy a new car is that both you and the dealer are looking to get the better end of the deal.
If you don’t learn anything else from this book you will learn how to walk away from the deal with both sides being satisfied.
A good deal is a win, win situation for both parties. Most of the time it is the buyer that leaves unsatisfied.
In this day and age a car is no longer a luxury, but a necessity. You will likely have to purchase a new car more than once in your life, so you might as well learn to do it in a way that will make buying the cars less painful.
If you are looking to buy a car you should begin with these tips.
1. You should purchase your new car at or around Christmas time because with everybody buying their Christmas presents, not many of them are looking to buy a new car, and it forces dealerships to up their sales strategies.
You can also get a good deal from July to October because that is the time of year when dealerships are trying to get rid of their inventory to make way for the new models.
Purchasing a car online is becoming a great way to get a new car. Just wait for good rebates and incentives online and shop around.
Print out your information from the best quotes and bring it to the dealer that you are most willing to work with. Bringing in lower quotes from another company might be your best bet in getting a good deal.
You should visit http://www.FightingChance.com if you are hoping to find new car prices, dealer incentives, and the best rebate offers.
This site is the first place that you should go for great advice on buying a car. It’s even more informative than the Kelley Blue book. This program for buying new cars can literally save you thousands of dollars.
A good place to start when going into a dealership is to bring a copy of your credit score with you. It can lower your interest rates on your car loan. Your car dealer should not know more about you than you do.
You can avoid a common scam that dealerships pull. You will often hear that your financing fell through and that you have to respond by paying more money on your loan. Don’t believe it. It’s another reason for you to get a copy of your credit score.
Another common scam by dealership salesmen is for them to tell you that they have found you a lower rate, but that they want you to re-sign your loan papers. Usually, that is a downright lie. Once they pull up your financing information, they have the upper hand if you don’t know the details about your credit information. You can get a copy of your credit information online at http://www.equifax.com for about $10-$15. It’s better to pay $15 now than thousands later.
Don’t bring in a car for trade in if you still owe money on it.
The dealership rarely pays the rest of the loan on time which will result in you having to pay a great deal of late fees to the bank. If you do decide to bring a car in that you owe money on, get it in writing from the dealership that they will pay the balance on the car within 10 days.
Sometimes a dealership may not have all of your options and must order the car directly from the dealership.
If this happens they will often ask you to pay $500-$1000 for a deposit on the car. Try not to pay more than $500 and be sure to pay with a credit card because sometimes the dealership will tell you that there was a price increase on the vehicle and will want more money. If you pay with a credit card you have room to dispute the amount being taken from you. If you pay by check, you can just consider the money gone.
You should never buy a car when you are in desperate need for one because a dealer will see that and take advantage. You should never wait until an old car is dead before searching for a new one because you should give yourself time to shop around for one and get the best deal possible. Desperation often clouds your judgment.
- What You Should Never Do
Find out the difference between the dealer's price and the factory price - so that you know how much to offer
Common Phrases and Word Games
Buying a new car is just like buying anything else on the market.
Salesmen are trained not to take no for an answer, and many word games and phrases come into play in order for them to get you to close the deal.
Advertisers and marketers are there to mess with your head so that they can make you buy things. Some of the best words and phrases that make a consumer buy products are amazingly well worded, while others are not.
Think about it - when marketers use carefully written strategies, you can often think that you are getting a deal, when in actuality you could be paying more.
Sometimes a marketer will offer a 50% off deal on a piece of merchandise, but in actuality the price of the object has been increased in the first place.
If a company marks up the price by 52%, and sells it for 50% off of that price, you are actually paying 2% more for the item than it originally cost.
This is a very common way for car dealerships to work. They may offer a $3000 cash back deal on your trade-in while the other fees and interest rates will be higher than you may want. Basically while a dealership may offer great trade in prices, they will get you with the other fees.
Dealerships have many ways to scam a buyer, let’s look at the top 10 scams that dealerships pull on you.
- Common Phrases and Word Games
Find out when salesmen are desperate to sell cars and are much more willing to lower their prices to close the deal.
Common Phrases and Word Games
Buying a new car is just like buying anything else on the market.
Salesmen are trained not to take no for an answer, and many word games and phrases come into play in order for them to get you to close the deal.
Advertisers and marketers are there to mess with your head so that they can make you buy things. Some of the best words and phrases that make a consumer buy products are amazingly well worded, while others are not.
Think about it - when marketers use carefully written strategies, you can often think that you are getting a deal, when in actuality you could be paying more.
Sometimes a marketer will offer a 50% off deal on a piece of merchandise, but in actuality the price of the object has been increased in the first place.
If a company marks up the price by 52%, and sells it for 50% off of that price, you are actually paying 2% more for the item than it originally cost.
This is a very common way for car dealerships to work. They may offer a $3000 cash back deal on your trade-in while the other fees and interest rates will be higher than you may want. Basically while a dealership may offer great trade in prices, they will get you with the other fees.
Dealerships have many ways to scam a buyer, let’s look at the top 10 scams that dealerships pull on you.
- Top 10 Dealership Scams
Do you think you could beat a professional basketball player at his own game?
For most of us, the answer is no. Think about that the next time you go to a car dealership... where you are dealing with a professional seller
1. The VIN Number window etching scam
2. The Financing Scam
3. The Credit Score Scam
4. The Forced Warranty Scam
5. The Dealer Prep Scam
6. The Dealer Mark up Scam
7. The Payoff Your Loan Scam
8. The Used Car Sold “As Is” Scam
9. The Bounced Check Scam
10. The Forced Credit Application
- How to Avoid Car Refinance Scams
Who Else Wants To Know Every Dollar Saving Trick, Every Scam-Stopping Tip, And Every Must-Know Bit Of Information You Need When Buying A Car!"
How to Avoid Car Refinance Scams
Purchasing a new car from the dealership leaves you open to dealership scams, but what about when you need to refinance your car loan?
Many of the scams are the same as you will encounter when buying a car.
Here are the best tips for avoiding any of the refinance scams that dealerships force you through.
Get your own credit score and bring it with you to the dealership
Don’t pay a cash deposit for your financing loan because if the deal goes bad, you can’t get your deposit back
Don’t apply for a car loan until you have been employed for at least 6 months if you are a recent college graduate
Apply for your loan online so you can avoid getting ripped off
Learn to fix your credit before you apply for a loan. Get your credit score to at least 680 first.
Pay off your credit card debts before you look for a new car
If you have recently moved wait 6 months before applying for a loan. You addresses are always verified. If you move a lot, they will not trust that they can keep track of your whereabouts should you make late payments etc.
Having been approved for a loan in the past helps
Don’t get a co-signer for your loan because often times you will find that the deal is solely in the other person’s name
- The Buyer’s Folder
"...It's You VS The Salesman!"
The Buyer’s Folder
Whenever you are considering getting a new car, you should be sure to bring all of the information that will help you to get the best deal you can.
This will all be included in your “folder”.
Here is a list of all of the information that you will want to include in your folder.
A copy of your credit report from www.Truecredit.com
New car purchase prices for the cars that you are considering from www.autousa.com
Accurate pricing data, rebates, tips and incentive from www.FightingChance.com
Credit pre-approval in writing from www.e-loan.com
Insurance quote that cover the coverage that you want on your loan
Used car blue book that has used car information and market values
Extended warranty quotes from www.warrantydirect.com
Current loan rates that are in your local paper
- How Much Money Should I Offer
Most people are too naive to realize what is happening when they are being sold a car. They are not thinking like the salesman, who has been there every single day for the last umpteen years dealing with customers just like them.
Negotiating Tips
Being a good negotiator doesn’t have to be difficult. Sooner or later everyone has to negotiate with someone if they want to get a good deal on a purchase.
When you are trying to negotiate with a car dealer, you should know that they are very practiced in the art already. You will need to know how to get through their “car speak” in order to be successful.
Since you now know how to calculate your offer and already know what the dealer paid for it, you should get a copy of the paperwork from a friend that recently bought a car, so that you can become familiar with what you will see on your paperwork. They are all generally the same.
If you’ve followed the above mentioned tips, you will also be pre-approved for a loan. The key is for you to get in and out of the dealership as quickly as possible because the salesman will definitely find more loopholes to up your charges if you stay.
Here are a few tips to successful negotiating.
Remain positive and confident
Don’t talk down to your opponent
Show up prepared and ready to counter anything that may come up
Bring ads from other dealerships with you as an extra weapon
Finance your loan before you arrive at the dealership so as to avoid paying unnecessary extra fees
Bring a friend with you for extra support
Something that you should look out for from salesmen is the extra little tricks that you will likely encounter that will try to force or rush into a buying decision.
You have to remember that they are trying to negotiate you into paying more money just as you are trying to negotiate paying less.
Here are some of the things that you can expect to hear from them.
“These cars are flying off of the lot. It may not be available for the same deal tomorrow”. (Threaten to leave and they will ease up and try to change their strategy)
“This deal is only good for today. If you come back tomorrow I can’t guarantee that the deal will be the same”.
“I’m an honest man. Look at how many cars I’ve sold this weekend” (This is where he will show you his list of sold cars. If he does this, then tell him that he doesn’t need your money).
“I hate to tell you this but I have another offer on the table from a man that is willing to pay more money than this. I am just waiting for his paperwork to be returned”.
“To cover the overhead costs, we have paid $13,000 for this car (Just check your paperwork in your folder and prove them wrong).
- Negotiating Tips
Find out the difference between the dealer's price and the factory price - so that you know how much to offer
Negotiating Tips
Being a good negotiator doesn’t have to be difficult. Sooner or later everyone has to negotiate with someone if they want to get a good deal on a purchase.
When you are trying to negotiate with a car dealer, you should know that they are very practiced in the art already. You will need to know how to get through their “car speak” in order to be successful.
Since you now know how to calculate your offer and already know what the dealer paid for it, you should get a copy of the paperwork from a friend that recently bought a car, so that you can become familiar with what you will see on your paperwork. They are all generally the same.
If you’ve followed the above mentioned tips, you will also be pre-approved for a loan. The key is for you to get in and out of the dealership as quickly as possible because the salesman will definitely find more loopholes to up your charges if you stay.
Here are a few tips to successful negotiating.
Remain positive and confident
Don’t talk down to your opponent
Show up prepared and ready to counter anything that may come up
Bring ads from other dealerships with you as an extra weapon
Finance your loan before you arrive at the dealership so as to avoid paying unnecessary extra fees
Bring a friend with you for extra support
Something that you should look out for from salesmen is the extra little tricks that you will likely encounter that will try to force or rush into a buying decision.
You have to remember that they are trying to negotiate you into paying more money just as you are trying to negotiate paying less.
Here are some of the things that you can expect to hear from them.
“These cars are flying off of the lot. It may not be available for the same deal tomorrow”. (Threaten to leave and they will ease up and try to change their strategy)
“This deal is only good for today. If you come back tomorrow I can’t guarantee that the deal will be the same”.
“I’m an honest man. Look at how many cars I’ve sold this weekend” (This is where he will show you his list of sold cars. If he does this, then tell him that he doesn’t need your money).
“I hate to tell you this but I have another offer on the table from a man that is willing to pay more money than this. I am just waiting for his paperwork to be returned”.
“To cover the overhead costs, we have paid $13,000 for this car (Just check your paperwork in your folder and prove them wrong).
- What Kind of Buyer Am I
Recognize a legal way dealers are able to charge you an extra $500 for doing next to nothing - and how you can avoid it.
What Kind of Buyer Am I?
If you want to save money while you are negotiating you should negotiate from the dealer cost up and not from the MSRP down.
You just need to remember that dealer cost is not the same as the factory invoice.
Some dealerships refuse to haggle over the cost of a car. Once you make your opening offer you should never accept anything higher than that, as far as costs go.
If the dealership that you go to doesn’t haggle, don’t sweat it, some other dealership will.
The reason some dealerships refuse to haggle is because they want to add extra fees to the MSRP. You will need to decide what kind of buyer you are in order to get a negotiating stance.
You do not want to set yourself up as a monthly payment buyer either because that is a guaranteed way for you to get a higher payment fee.
They will offer to take a little bit off of the MSRP. They will then ask you what you are looking to pay each month; this is where the extra money comes in.
Cash buyers are generally asked, “Are willing to pay each month?”
Tell them it doesn’t matter because you are looking for an even division on the cost of the car, not to haggle over the monthly cost.
Tell them that you are looking to haggle over the cost of the car, not the monthly payments. This is often used for cash buyers.
If a finance manager tries to get you to report your payment method before you have decided upon purchasing the car, don’t get sucked into it.
The method of payment doesn’t matter unless you are deciding upon purchasing the car. Finance managers ask so that that they can best decide how to screw you over.
Some dealers will offer you to give you a better deal if you finance your car through them. I can guarantee that this will not be the case.
Of course the worst thing that you could be an impulse buyer.
An impulse buyer is just another word for “victim.” Impulse buyers can often get sucked into the “hot” car of the moment and usually get taken for as much as $10,000. A dealer can see this buyer coming from a mile away.
If a dealer approaches you about the “hot” car tell him that you are not interested because it will not be worth the money next year as the new “hot” car will be out by then.
You don’t want to buy a car that is in demand because it is the easiest way for a dealership to mark up the prices. The MSRP always looks low, but it is the extras and monthly payments that will lose you money.
Remember the resale value of the car doesn’t change no matter how much money you bought the car for. It still depreciates in value from the factory invoice.
- Some Sales Scams
5 lines a salesman may give you to try to force a sale. Get ready for them before you are face to face with a professional seller
Some Sales Scams
As I’ve said before, there are many ongoing scams that dealerships will throw at you in order to bank some extra money from you. I’ve shown you the most popular, but let’s look at some more.
Written contract scam: This is basically when the finance manager sits you down and begins to write himself into frenzy, while quickly throwing numbers at you until you are so confused, you end up paying more than you agreed upon.
This may seem impossible for a person to get away with but believe me; it happens all of the time.
The finance manager is counting on you being confused and desperate to get out of there, so assumes you will simply go along with whatever he says. Most of the time, it works.
Avoid it by forcing the guy to slow down, and calculate right along with him to make sure that you are getting a fair deal and that you both come up with the same numbers.
Price beating scam: This is when the dealer tells you that they will beat anyone else’s prices or give you $500.
They simply ask you to get the price from another dealer and they’ll beat it. The hard part is that other dealers will not just hand over their information for you to take to someone else. This deal is almost impossible to get because most dealers sell different makes and models anyway.
Avoid it by not buying into it in the first place.
I won’t get paid scam: This is when the dealer tells you that he won’t get paid if you don’t purchase the options package. This is a tug at your heart strings.
To avoid this simply tell them that you refuse to buy something you don’t want just so that they get paid. If it’s that much of a problem they should get another job.
No payments until scam: This is when a dealership advertises that you don’t have to pay for 6 months.
Next thing you know, you buy the car and they tell you that it is due for payment in 2 months. Some will not even be applicable at all.
They can claim a typographical error or that the deal was a week ago. It’s an outright lie, and you should get your deposit back.
Avoid this by asking the dealer to put that in writing before you purchase the car and make your deposit by credit card so that you can refute it.
The “We’ve Got it scam: This happens when you call a dealership asking for a specific car make, model and color and are told that they have it.
However, when you get there, you are told that they miraculously sold the only one they had before you arrived. Next they will tell you that they have another car similar to it for only $500 more.
Avoid this by leaving.
No Cheaper rate scam: This is when a dealership tells you that you can’t find a cheaper price anywhere else on the market.
Get real! Of course, if you’ve done your research as I told you before, you already know that the prices don’t change on the value of a car.
Avoid this by simply stating that they must be right, and then leave.
The Phone call scam: This is when you have successfully negotiated a car, and the salesman suddenly gets a phone call with an offer for the car that is lower than the price you agreed on. Then he casually lets you hear him state that he will call the man on the phone right back if you opt out of the deal. Next, he tries to talk you down from your set upon price to compete with the guy on the phone’s offer.
Avoid this by telling the salesman that you will understand if he chooses to take the better offer.
Paperwork scam: This generally happens after you have already paid your bank draft for the financing of your car, and the deal has already been set in contract. Conveniently, the salesman will write down the wrong date on the sales contract. You are then told that you will have to finance the car through their company for extra fees within 2 days or you will be stuck with a higher financing and interest rates monthly.
To avoid this watch the salesman write your contract and check the dates before you sign them, just to be sure.
Factory Holdback scam: Dealerships depend on a buyer’s ignorance so that they can mark up your prices. Holdback is money paid to the dealer for about 2-3% of MSRP.
It is money that is given to the dealer from the factory when the car is sold. This is profit for the dealer for buying the car. Most dealers will tell you that it costs them money so that they can charge you for it later. Basically, they can get the money twice.
Avoid this by letting the dealer know that you know better and will not pay it.
Insurance scam: This is when the dealership tells you that you must get your insurance from them or a company that they work with if you want to avoid paying higher interest rates. This scam also applies to the dealership forcing you to pay life insurance or extended warranties due to “bad credit.”
Avoid this by leaving. What they are doing is wrong.
Turnover scam: This is when the dealership sends over many different salespeople hoping to wear you down and get you to hurry up and buy. This is also called harassment.
Avoid this by threatening to leave if they don’t stop it.
Hidden rebates: This is when the dealership advertises that the price of the car is lower than the MSRP.
What you don’t realize is that the fine print says that the prices include rebates. All this means is that the rebate that you were offered doesn’t exist because it was already calculated in the ad.
Avoid this by ignoring it or requesting it in writing that states the rebate is in addition to the price of the car.
Deposit scam: This is when the finance manager insists on a deposit before you have signed the purchase contract.
You will be told that the finance manager has to bring in a copy of the contract offer to his boss and he needs a deposit from you just to ensure that the boss will sign off on it. It’s just to make sure that you are “serious” about getting the car.
Avoid this by refusing to give a deposit before the contract is finished a signed by both parties. Dealers run this scam so that they can keep you there. Tell them that the fact that you made an offer on the car shows that you are serious.
- Closing Without Extra Costs
Learn how to react to the "No Cheaper Rate!" and the "We've Got It!" schemes before you get taken for hundreds or thousands more then you intended.
Closing Without the Extra Costs
So many people get ripped off after they have already closed the deal. They get you on the extras and the warranties at that point.
The extras are things like rust proofing, scotch guarding etc. It seems pretty straight forward but you would be surprised at how many people get taken on these. The trickiest closing cost scam is the extended warranty because the language used is so confusing. This is not the warranty that the factory gives you for the car.
It is a warranty that covers the cost of fixing the car should it break down on you. To get around this, you have to know the dealer’s language.
Extended warranties often do cover any repairs that you require during your coverage period, but there is often some information that you are not told about.
For example, the extended warranty is usually effective only up to a certain amount of mileage or term period; whichever happens first.
They might also only cover certain types of problems. If your extended warranty doesn’t cover every part of your car, why bother?
Some extended warranties don’t cover the larger problems, but just the smaller ones. If your engine conks out, you may be left in the lurch.
You shouldn’t even consider buying an extended warranty if you are only leasing the car for a small time period like 36 months. Perhaps it is better only for longer periods of leasing like 60 months.
Many extended warranties don’t cover everyday wear and tear policies, only breakdown problems. If you do insist on getting an extended warranty, get one that covers both instances.
You will only really want to get a warranty on a more dependable car like a Lexus, Honda, or Toyota because extended warranties rarely cover the costs incurred in cars that are present at the time of purchase.
You will also want to get a warranty that is effective immediately. You will also want to get a warranty with a well established finance company and not one that go belly up in a year.
Don’t purchase an extended warranty directly from the dealer. Instead look at sites on http://www.LendingTree.com for an online warranty because being online gives you all the time to asses your warranty properly.
Watch out for deductibles because you don’t want to get stuck paying for deductibles that you thought were covered by the warranty.
Now let’s look at some of the extras that dealers get you on at closing. This can be very irritating how they try to weasel even more money out of you in the end on stuff that you really don’t need at all.
Of course, when you hear it, they will all sound dire. It’s bad enough that they will throw them up at you but look at this table to show how much they are really ripping you off by.
- Common Extras at Closing
9 extra costs that the dealership will try to tack on after the deal has already been closed - along with the actual price it costs the dealership to offer these "extras."
Most Common Extras at Closing
Rust proofing, Extended warranty, Scotch guard, Car alarm,
Paint sealant, Credit/insurance costs, Detailing and pin striping
As you can see, these extras will get you in the end. If you can, you should avoid them all together. They are worth far more to the dealer than they are to you.
By now, you should know all of the things that you need to know in order to buy your new car with the least amount of burden, and you have learned to avoid the common scams pulled by dealerships. This is the only online guide that you will ever need when you get ready to buy a car.
You’ve learned:
The various tricks
Advertising tricks and misleading marketing
How to get the best price
How to negotiate your opening offer
How to negotiate
How to calculate your opening offer
What the difference is between the factory invoice and MSRP sticker
If you have read this all the way through, then you need not worry. All of the advice listed here will save you a great deal of time and money.
You are now fully prepared to get your new car - So what are you waiting for? Go shopping!
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