A couple pointers when buying that new or used vehicle!

 I used to sell cars for quite a few years and i was pretty damn good at it too!! I was young and ambitious with the world at my fingertips, or so i thought.  I wanted to be the best automobile salesperson ever and i worked very hard at it, only it caused me some moral dillema's later on in life.  You see an auto dealer will typically keep its sales staff "starving" so that they will do just about anything to sell you that new or used vehicle.  While the face of the auto industry has changed tremendously lately, the basic principles will still apply when next you go to buy a new car.

I am writing this hub to inform the uninformed of some of the lesser known strategies that take place at an auto dealer.  A tremendous amount of time is spent on luring the customers into the dealership.  Whether it be billboards, radio ads, TV spots, local ads, and in some cases cold calling the phone book!  Thats right, there are some less scrupulous dealers out there that will require its sales staff to call you from out of the blue just because your last name happened to be where that particular salesman opened the yellow pages!  If you have ever received one of these calls and wondered just how the hell they got your number, you just happen to be the "lucky" winner! 

I have even seen "sales" that are planned out using a mailer company.  They send you something that very much looks like a check for some amount of money, usually five hundred or a thousand dollars, off of a used vehicle, and states something along the lines that you have been exclusively chosen to participate in a once in a lifetime sale!  Its all a load of manure.  They bump up all the prices on their used inventory by the same amount "given" to you in the mailer.  Just another gimmick to get you in the door.

Financing... My goodness how many people out there dont realize that the dealer makes money on the financing? They call it the backend, and its rather appropriate considering that they just made money selling you the car in the first place but now they are sticking it in YOUR backend by, what is referred to as, bumping up the interest rate.  The dealers get the rates from lenders at a wholesale, and then by law can bump it a few points to make money.  So if you got a loan for 8 percent you can bet the dealer got it for 6 percent! The only time this wont occur is if you qualify for the auto makers offer such as the 0 percent for sixty months deals etc.

Extended warranties.... Ugh!  This really pisses me off because in most cases the customer loses in both directions.  The dealer will offer you extended warranty through a third party such as Wynn's or even through the manufacturer.  While i personally have seen these extended warranties blow up in the face of disaster, there are some that will be honorable and actually cover the cost of repairs.  Most will find a loop hole and stick you with the bill, and not even thank you for spending that extra two grand at time of financing!  Oh and did i mention the dealer makes money on this for selling it to you!? Thats right, again the dealer made more money on you!  The provider offers the dealer the packages at a discounted rate and they then in most cases charge you several hundred dollars more for the same coverage! My advice is to steer clear of extended warranties unless you are super diligent in taking care of your vehicles and getting the oil changed EVERY 3000 miles, and keep records of it.  Most are just a waste of money in my opinion!  If you feel you need the extra coverage, i would suggest leaning away from any warranties that are not backed by the manufacturer of the vehicle being purchased or from the dealers main line of automobiles.

Trade-ins.. gotta love em right? I mean you get to save thousands off of the new vehicle and a bit of a tax break as well.  Here is the tricky part of a trade-in.  You will only get what the dealer can pick up a similar vehicle for at auction, for your trade in value.  No matter what the numbers read at the end of the deal, the dealer will not extend him or herself beyond what they can purchase a dozen of the same vehicle for at auction, no matter how well your trade in was kept!  And for once i dont fault the dealer for this.  The economy dictates what a vehicle is worth and that is the long and short of it!  If the market is soft on four wheel drive gas guzzling vehicles, then your trade is not worth what it would be in a market that is strong for that vehicle.  That being said, the dealer often has to dance around the truth of what your trade in value is.  They do not want to offend you and lose the opportunity for a sale.  If you really want to know what you are getting for trade-in, you have to work the entire deal, and not let on you want to trade the vehicle you just drove in with.  After you haggle and haggle (as every customer should do) and you feel that the dealer is at a wall, THEN and only THEN do you say you might consider trading in!  This will give you a much closer look at the REAL value of your trade in! You will most likely be very disappointed with that number but i guarantee you that, that number is very close to market wholesale value! Ideally the dealer wants to know of your trade as soon as possible so that he or she can pad the books so to speak when coming at you with their "deal".  So for a trade in that is worth $8,000 wholesale, and a vehicle you look at to purchase is MSRP of $20,000, the dealer would present you with a deal that looks like this.  $20,000 minus $9,500 trade in.  All the dealer has done is not come down on the MSRP but used what money he has in profit to show you the customer $1,500 dollars more for your trade than he or she is actually going to own that vehicle for.  But if you work the deal as a no trade in for the initial part, and get the dealer to offer you a deal of $18,500 for the purchase price of the new car, and THEN say you want to trade in after all, it will force the dealer to be much more honest with you as to the true value of your trade in.  Now he has very little room for movement in the profit department, because he just gave you $1,500 off of the asking price!  He has two choices, come out and hit you with the truth about the value of your trade-in or he can "step heavy" into your trade and put more money into the trade-in than is ideal for him or her!  Now you have em on the ropes.  This is YOUR deal so make it the best you can!

I realize that i can possibly be wrong about some auto dealers out there and anything i say in this hub or future hubs is based on personal experience of nearly five years in the automobile sales industry.  You may find that there is a completely honest dealer near you and that he or she has your interests at heart, but i rather doubt it.  Good luck out there and i hope i have taught you a few lessons that you can use the next time you go car shopping!