straight talk

Plan for purchasing a Vehicle.



Posted: Sunday, April 23, 2006

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Most of us at one time or another have had a need, a yearning or are forced by circumstance to purchase another vehicle, be it new or used. In most cases we don’t know the make or model but we have an idea of what type of vehicle we are looking for. Of course there are loads of car dealers to be found to shop at. Thousands of cars along our highways says a lot. In my opinion, this is not indicative that you will get a good or bad deal. It just means Americans buy and sell a lot of vehicles. However, what it does say is that these car dealers are all making bucks! The information provided is based on my personal experiences and my opinion only. It does not infer all dealerships operate in this manner. However, keep in mind even the dealers will offer a beware when shopping other dealers. That in itself says a lot. Also, there are some real good dealers, who, while making money, don’t let you feel like they have taken you for a ride and actually give you a decent deal. However, as mentioned, don’t think this is everyone you drive into. It is probably a small percentage. Yet, I actually, got a great honest deal from a Buy Here/Pay Here dealer when I was down on my luck and could have been taken real good. But that was an issue of the mans integrity and he had it.

The first thing I usually do shop the internet and newspapers. I want to get an idea about what my car is worth and what a specific car type I want to buy might cost. I am then aware that when trading I will low balled anywhere from $2500 to $4000.00 on my vehicle. There are many reasons for this but the most predominant is the “buy low sell high" philosophy of all sales persons and the - “we have to guarantee your care and fix anything wrong" line and the understanding if you find someone who knows little of how dealers operate- hang onto them! The other reason is why drive all the way to a dealership when you know you will be spending multiple hours wrangling over a price when you can narrow the choices and go directly to where you want. Some dealers say the price is clearly posted on the window so there is not much involved. Unfortunately, the buzz word of this decade, only the retired and those 20% who have it are the one’s this applies to. Also, don’t waste your time on the zero interest and other gimmicks unless you are also the ones who have it. That applies to those with the great credit scores and the cash. They don’t need that to begin with. This is not for the average family with a mid 600 or lower Beacon Score. Also, read the very fine print at the bottom of all their adds if you can even see the print. After all that mumbo jumbo you will know their true advertised price. Adds usually tell you the prices are after so much down, dealer fees, etc. This is sometimes as much as $4000.00. That will get you to the true price of the car being advertised. Also, you will always get a picture showing of the high end vehicle even though when you get there they show you a stripped down model. Also, keep in mind those 20% over Kelly Blue book deals work off the list, so throw away all those gimmicks and know just what the car costs the dealer and what the dealer has in hidden money to play with. There is a lot of finance and other monies that can be rolled into the deal. You need to research that. Also, If you can’t understand English, nor read, you are in for real trouble. In my opinion you should bring along someone you trust [if there is anyone these days] to interpret for you. Otherwise that friendly smile and the person who speaks your language doesn’t mean a good deal for you. They are not necessarily your buddy. Also, don’t look for that price leader special they offer in the paper. It is strange but each and every time I got to a dealership it was already sold or they couldn’t locate it. What I advise my children is that don’t spend hours with the salesperson. They can’t do anything for you.

Sometimes salespersons will direct you the specials of the day and away from the real bargains or better vehicles to the ones that have been sitting on the lot for a long time. Sometimes it is not even what you are looking for but they show you under the guise that they have a good deal you really must take a look at. When you ask about any specific vehicle they will take out their price guide and proceed to usually give you a much higher price then what they actually want to sell it for and sometimes what it even is listed at in the newspapers. This can be $1000.00, $2000.00 or more. This is especially true at tent sales where everything is supposedly a bargain. Also, those tent sales supposedly post the price the finance company wants. Don’t buy into that, they all want as much as they can get. That is the ass for every seat approach. If you bite and buy he just made a nice commission and points with the manager. However, if you move along he will tell you that he is going to work hard for you to bring the price down but keep in his manager is the problem. It is always the other guy. It is the good guy bad guy routine.

Don’t forget to inspect their car closely. I would recommend an impartial mechanic or repair shop. It is worth the money in the long run. A carfax does not always show all damage, especially if repair was under certain dollar amounts or if it was repaired by the prior owner or the state or local an accident occured did not report it as salvaged, or there is no police report filed. However, having a carfax or similar will back up your purchase with who owned it and they do offer a buyback as long as these factors can be proven by you. If not the Carfax is worthless. Yet. have the dealer give you one as part of the deal. You will pay for it anyway. Take it for a drive and note how it sounds, stops- play with all the options, take it onto the highway and look for high speed problems. Inspect the vehicle while in the Sun and at different angles. Check for poor sanding, dullness of paint, paint mismatch, wheel alignment, check door kams for whelding, fit around the hood and trunk. Check around chrome for paint over spray and around window seals, wheel wells and underneath. This is where you can usually spot possible over spray. Remember the larger, wealthier dealers won’t even hold a car like this on the lot but be careful at off road lots, low end / low priced dealers. Always check the oil / transmission and brakes. If the oil is new it means nothing. What did it look like before. A clean engine does not mean a good engine. Check the exhaust for oil and smoke. If the car looks worn most likely the mechanicals are as well. If it looks too good to be true be careful as well. Today, a little cosmetics goes a long way. If you can, write the agreement based on your mechanics inspection. Find out the warranty the dealer gives. A 50/50 means you pay for it all!

If you decide and start to negotiate, never throw the car into the picture, even if you wish to trade, until you get a purchase price. This is the price the dealer is willing to sell the car for cash. Once you decide the price is fair then bring up your trade. Be prepared for the tirade but they have already considered this possibility and if they want to sell they will! However, if you tell them up front tack it onto any offer they make. They usually determine this when they first meet you. What are you looking for? What do you want to spend? Do you have a trade? You need to just look for the car you want and when you find it never say this is the one I must have. Just look at a few and return to that one when your ready. Don’t give them any edge in negotiating for they will use it. Now after selecting the car you wish to negotiate on he will sit you down, ask if you want something, take all your information and get your keys for the “inspection" by the dealer as to what your trade is worth. You will then go back and forth with him negotiating until your ready to leave or you buy. If you buy from him you know you paid too much and frankly you don‘t care! As for your car as a trade, they will most likely find some type of problem which they determine by simply looking at it. Once a man told me I had a major problem in the front of my car with the design which caused damage. Since, it was still under warranty I took it to the dealer they said there was nothing wrong. You might also hear it was in an accident - when in fact it never was, or repainted, or that you have a mechanical problem- even though you just had your car in for maintenance, those type of things. They could also say your upside down and your car isn't worth anything. They will show you their black book, which is the actual loan cost and not the true value and they might be comparing a base vehicle while yours is an upgraded model. No banks write loans at true value it is always about 80% lower to protect their interest. You might also hear you have a nice car that they would like to have. This means nothing as far as dollars go, it is just to get you to their side and more trusting.

After all the ridiculous haggling and you are getting ready to leave all of a sudden you hear the key words “let me try one more time". If you want to, you will now move from him to the manager, the process changes and the manager now becomes your buddy. The action played out is that of good guy - bad guy routine again that you hear about in police stories. If your going to go to the manager make sure they know just what your bottom line is! When you do get there you will most likely get the preverbal questions like “what are you looking to spend, what are you trying to do“? From here it is all downhill. You will, if you like the vehicle, agree to the price. They will have told you they allowed you so much for your car and usually well over what it is truly worth. They might also tell you they have to prep it for sale when in fact your vehicle is clean as can be. Yet, understand, they do have to run a safety check by law and some dealers are fussy. Believe this, you never get what your car is worth regardless of what they tell you and how great you did in haggling. When they say you stole it, that is for your ego only! Your job is to get your price as close to what you want to sell it outright for or purchase it for and make sure you keep track of all the numbers flying around. Do not sign until you know what every number represents.

Also, keep in mind it costs the dealer money to have their car on their lot. Remember the finance money to throw into the deal and I don’t mean incentives. These incentives can come on top of that. Usually the longer the dealers have a car the more they have into it. If you are using incentives keep in mind this should come off the list and then what they offer you as the sell price. Sometimes they will tell you the incentives are already in the sale price. You had better done your homework. After you agree on the price you are still not done and must now go the finance person who has a whole assortment of finance companies and also makes money off of you! Depending on your Credit Score, which they rarely tell you, but if they do tell you it is always lower then it actually is, they then secure a loan. Depending on the term [length you will have to pay] and if it is rule of 72, or simple interest you will average about $25.00 per thousand as your monthly payment. That is [lets assume you took 60 months to pay it back] at this rate your payments would be 16 x 25 = about $400.00 plus interest and depending on what interest rate they gave you. The rule of 72 you should never sign because you pay all the interest up front. This leaves you with a car two or three years later worth less with the price you purchased the vehicle for. Also, never let the dealer add a maintenance package. Get them to warranty the car for a few days and if you want one add it after market. Why, this is added into your loan amount and your payments will be higher. Just make sure you research these as well.

So after you drive off with your new used or new car you own it- period! Once it leaves the lot it is up to the dealer to assist if you want to bring it back. Some will, some won’t so be careful of their so called guarantees. Also, don’t be afraid to walk away if your not happy. Their job is to intimidate you in many ways to close the deal. Remember there is always another dealer and day.

Finally, one asks why we aren’t protected more by our government rom some of these sales practices. Frankly, they don’t give a damn. This is the way it has been since time began with sales. Let the buyer beware! The misleading adds, the small print, the bait and switch, which is supposed to be against the law, happens daily. We are dreaming if they were to spell out exactly the model, equipment and bottom line price and forget all the fine print. Leave out the so much down baloney and give you the price without extra incentives, like the owner loyalty you may be entitled to. Rebates and incentives by the dealer and manufacture should be already in the price advertised! But that is too simple. It takes away the opportunity to compete and opportunity to manuever.

So, remember, when you drive into a dealership you will get two approaches. Approach one lets you drive around and search for a salesperson. This is the make believe we are super busy approach and don’t need you to sell cars. The other is the go get cowboy approach. This is the everyone for themselves as soon as your front wheel enters their driveway. You will be engulfed in the “Hello, can I help you" and your off to the races. All I can say is the best way to counter this is to be prepared. In every case where I have purchased a car I had to shop and sometimes I walked away, even at the very last moment! But, you know something there is a time and place and certainly a car to be had for good deal. Finally, and once again, don’t ever believe they lost money. Like I said, this is for your own consumption and to get you back in the future. After all that you will be happy with your car and the deal and even if you think you may have paid a little too much, you have enjoyed the negotiation and perhaps you did a lot betterdeal then if you didn’t even try. I hope this helps and good hunting.

Robert T. Melaccio Sr. Copyright ©2006 Robert Melaccio



Robert Melaccio Sr. has worked in the computer industry for 40 plus years in a diversified business and managerial environments. He enjoys freelance writing, giving seminars for young adults and teen groups as well as being an accomplished award winning poet of published poetry. He has worked teaching and as a youth minister. He is married and has three children and three grandchildren.

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Top-level comments on this article: (1 total)
» left by Anonymous 5 years 193 days ago.
Carfax is worthless. A friend bought a car from an individual that produced a carfax. It turned out the car was in a major accident in California, and totaled, but not reported to the state as salvage, so no mention on the carfax report, even though the major accident was reported to Irvine PD. Carfax says, tough, if it wasn't salvaged we don't care.
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