Car salesmen, how they get you

[ktlm]

This popped up as a headline on my msn this morning:

http://editorial.autos.msn.com/10-tips-for-regret-free-car-buying?icid=autos_2091

 

[kt_mom]

My son is a car salesman.


The BEST advice I can give you is to get your own financing. Period.

As is my husband.

My DH is the GSM at a local dealership and I would give the same advice.

And yes, do your research, but there's no need to go in with an attitude from the get go. You can negotiate and be well informed and get the best deal for yourself without being a jerk.

When you are looking for your own financing don't forget the small local banks and credit unions. We have one in our area that is making great offers to people. Sometimes its not straight up though. They will offer to beat the dealer by a half point. Which is what we did. My DH got the best financing he could through one of the banks they use and then we took our contract to the credit union and refinanced for a half a point less.

 

[aymekae]

We bought a new car almost 2 years ago. A few things helped us get what we thought was a good price without any hassle.

-We went on March 31st, which was both month end and quarter end, so they were eager to make a deal and get us to buy THAT DAY. All our research was completed ahead of time.
-We brought in a rival dealership's ad for the car we wanted. This was a lost lead ad in the vein of "2 at this price!" that usually sell out within the first few minutes of the place opening, but keeps people coming in all day to buy the same car at a higher price. That place was about 1 1/2 hours away, plus we'd have to take whatever color they had for those 2 cars even if we made it by opening.
-We asked if they would match that deal. And they did.

 

[Huff]

I've rarely ever paid more than invoice minus incentives. Look up the invoice on kelly blue books website. Find out what incentives there are both public and dealer incentives. Edmunds website is a good source for that.

Once you know the dealers cost offer that minus any incentives. If dealer A says no, walk to dealer B. Except in cases of a very popular car, you will find a dealer that will take the offer. Note that invoice is NOT the dealers true cost, they will still make a profit. If the dealer feels that you want the car bad and won't walk, they've already won and won't budge on price.

If you work for a large corporation see if they have any automobile discount programs. Manufactures will often sell well below invoice this way.

ALWAYS negotiate the price you pay for the new car, financing and trade value individually. NEVER negotiate on monthly payment alone which is what dealers want you to do. Know how much a payment would be for a given sales amount before going to the dealer.

 

[PatMcDuck]

Why? I work in finance and with decent credit, I can beat just about any rate that most banks and credit unions are offering by multiple points and I usually accomplish that with $0 down and a reasonable term (36-60 months). Manufacturer finance companies rarely allow dealers to bump rate, so usually the buy rate is the rate we contract at (I've not had a loan that I could bump in well over a year). They also limit the fees that dealers are allowed to charge and will return contracts for adjustment if we go over those fees.

So dealer financing is not bad in most cases and I personally think that you should at least consider it.

UM, not correct. They DO (legally) add points to the financing, at least here in NJ. But of course, dealer financing should be considered. But the delaers often DO add points, and they do not tell people when they do..... this is the budget board, just trying to help. Some people have other loan options, like credit unions, banks, etc. And the dealerships do help people with so-so credit get loans, who have few options.

It is just something I was unaware of, because we buy only used cars, and usually for cash (using funds from other sources).

 

[MSLRAC]

UM, not correct. They DO (legally) add points to the financing, at least here in NJ. But of course, dealer financing should be considered. But the delaers often DO add points, and they do not tell people when they do..... this is the budget board, just trying to help. Some people have other loan options, like credit unions, banks, etc. And the dealerships do help people with so-so credit get loans, who have few options.

It is just something I was unaware of, because we buy only used cars, and usually for cash (using funds from other sources).

I didn't say that they didn't allow it, I said that they rarely allow it. If a person is approved on a promo rate, it can't be bumped. If it is a standard rate, where bumping is allowed, that does not mean that the rate was bumped because not all dealerships and/or states allow that.

I have no problem with people exploring all their options when it comes to financing but I think saying always get your own financing is a bit much.

 

[sookie]

Why? I work in finance and with decent credit, I can beat just about any rate that most banks and credit unions are offering by multiple points and I usually accomplish that with $0 down and a reasonable term (36-60 months). Manufacturer finance companies rarely allow dealers to bump rate, so usually the buy rate is the rate we contract at (I've not had a loan that I could bump in well over a year). They also limit the fees that dealers are allowed to charge and will return contracts for adjustment if we go over those fees.

There are also some perks of dealer financing. We are a special level of Honda dealer so American Honda Finance will buy deeper for us than they will for other dealers. It's not that they are buying bad loans but they are giving a chance to first time buyers with no credit, buyers with limited credit and buyers rebuilding their credit. So many times, we have been able to get people bought that their bank or other dealers could not.

So dealer financing is not bad in most cases and I personally think that you should at least consider it.

I always come in with my own financing (and a check). That way, if the dealer has an incentive (rebate or 0%) then I get the rebate and then I use my low cost financing. The numbers crunch better that way!!
Credit unions are your friend!!