Car salesmen do a lot of things to save money and increase profits. Anyone looking for a new vehicle needs to be smart about how to find fair prices. Thankfully, with a little research and know-how, consumers can better understand how car salesmen market vehicles and establish prices. Educated car shoppers can use such websites as Edmunds and Autotrader to find out the true market value of both used and new vehicles. Understanding what dealers’ pay for cars, their mark-up and their sales techniques helps consumers save money and make smart buying decisions.
Careful with Conversations
In the middle of negotiations, a salesman may leave the room to allow people to talk over the car purchase and rates. However, what many people do not know Is that some dealers are listening in on the conversation to figure out a consumer’s bottom line. The best way to share important information is to whisper, step outside, or even leave and come back.
Avoid the Extended Warranties
Dealers are always trying to get consumers to buy into extended warranties and roadside assistance plans. Smart car shoppers will avoid these features. Most salesmen make a lot of money on such service contracts, and many consumers end up not using them. People need to remember that dealers are salesmen trying to make money. If a consumer wants a warranty or roadside assistance plan, they should look elsewhere for better deals.
Trade-Ins Are Undervalued
Salesmen use the National Automobile Dealers Association (NADA) database when deciding trade in rates. Some Kelley Blue Book numbers actually undervalue vehicles. It is important for consumers to use the NADA value for a vehicle if they want to make money on this trade-in. Other people may decide to sell the car privately.
The Invoice Price Isn’t the Whole Story
Consumers need to be careful when they say things like, “I am only going to pay invoice for the car.” Dealers often save money thanks to customer rebates and factory-to-dealer incentives. Consumers can often slice money off of a car by actively negotiating. Settling for invoice rates for a car means that people miss out on important savings.
The Down Payment Is a Bargaining Chip
Smart car shoppers will not settle on a down payment right away since this gives away a bargaining chip way too early in negotiations. Dealers may up vehicle prices once they know how much a person has to put down. Instead, one should know the “out the door” rate before explaining the down payment.
Decipher Monthly Payments
People need to walk in understanding what they can afford to pay for a vehicle. Focusing on the monthly payment alone could be costly. Dealers often experiment with loan length and interest rates to reduce monthly payments. This can make it easier to afford a car but could mean a person is paying more for the car than they want. Final cost of the vehicle is important.
Car shoppers need to be smart about the information they share with salesmen. After all, dealers are trying to make money on every sale. People who want to save money need to know what they are looking for and play it smart. Understanding a salesman’s techniques helps consumers make a smart decision when looking for a new or used vehicle.
