| As a long time time Car Salesman for a major | | | | with. So what do you do now? |
| Dealership I can tell you that there ARE some ways to | | | | You should always ask to see the invoice on the |
| make sure you're getting a good deal when buying a | | | | vehicle. This will show what the MSRP or "Sticker |
| new car, and, there are ways to help ensure that | | | | Price" is and should also show a discounted price that |
| you're not getting ripped off. | | | | would be what's called Dealer price or cost. If it's a |
| The very first step when contemplating the purchase | | | | reputable Dealership they won't have a problem |
| of a new vehicle is to narrow your search to reputable | | | | showing it to you. If they are reluctant... go somewhere |
| Dealerships. Ones that have been in business for 10+ | | | | else. Dealer invoice price or cost is not only what a |
| years or longer is a good start but the longer the | | | | Dealer pays for the vehicle it's also his overhead. It |
| better. Next, you should check the Better Business | | | | includes the per unit base salaries and commissions of |
| Bureau reports. They rate businesses on an A - F | | | | the Manager, the Sales person, the admin support |
| scale. Anything short of an A rating and you should | | | | people, the building expenses, the taxes, and |
| look closely at the complaint section. If you see things | | | | everything else it costs to run a Dealership right down |
| like advertising or contract issues - shy away. If | | | | to the lighting bill. So, it is the break even point for a |
| they've had just a couple of complaints but resolved | | | | Dealer; he doesn't make any profit but he doesn't lose |
| them to the customers satisfaction then they're | | | | anything either. Manufacturers incentives can make a |
| probably doing what they can to make customers | | | | price come down below his invoice cost. So, how |
| happy. Keep in mind that there are always those | | | | does the Dealer make any money? Well, when |
| people out there who are never satisfied no matter | | | | manufacturers get the sales info they reimburse the |
| what. | | | | Dealer back up to their break even point but they also |
| The next thing you should do is decide on the specific | | | | give them what is called "hold back". |
| vehicle you want. You can go on any vehicle | | | | "Hold back" is an amount that the manufacturer will |
| manufacturers website and "build" the car of your | | | | give a Franchised Dealer when they achieve certain |
| dreams. Once you do this, print it off, and call around to | | | | sales goals. This can be as much as $600 to $700 per |
| see if any dealerships have the one you want. You will | | | | car and more. That's one way they make money. The |
| probably get some "no buts" ie. "we don't have that | | | | other is by selling used cars which typically have a lot |
| one but we have this one..." That may not be all that | | | | more "mark up" than new. Buying a used car and not |
| bad for you if it's close to what you want and here's | | | | getting ripped off is beyond the scope of this treatise |
| why... | | | | and I'll cover that in another article. I'll also cover how to |
| Dealers have "older stock" vehicles on hand most of | | | | get the lowest loan or lease payment on your vehicle |
| the time. These are cars and trucks that have been in | | | | at a later date but at this point I'll just say shop around. |
| the inventory for a couple of months or longer. There's | | | | Interest and lease rates can vary greatly from one |
| nothing wrong with them but customers have just | | | | Institution to another. |
| bought others. Dealerships have to pay taxes and | | | | So, what should you really expect? Given what I've |
| other overhead items to keep the vehicle in inventory. | | | | said above anything under invoice (Dealer cost) really |
| The longer it sits the more it costs the Dealership to | | | | and you should be getting a good deal. Obviously the |
| keep it there. These can be great bargains. It may not | | | | lower under this figure the better but they don't have |
| be the color you want or even have all the bells and | | | | much room beyond that. 1% under invoice is a good |
| whistles you planned on (sometimes they have more) | | | | target figure but occasionally you can get lower - like |
| but if you can be what we called "color blind" or "option | | | | for an older stock vehicle. |
| flexible" in the business they can be a steal. I've seen | | | | Be prepared to walk away at any time if things "just |
| some vehicles marked down 10 -12 thousand and | | | | don't seem right". Many Dealers will let you walk all the |
| more just to move them. | | | | way out to the parking lot or even call your cell phone |
| After you're pretty sure of what vehicle you'd like, | | | | as your driving away to say "OK". Keep in mind though |
| flexible or not, it's time to go to the Dealership. Expect | | | | that all the Dealers pay the same for the cars and |
| to spend at least a couple of hours to narrow down | | | | they all have the same manufacturer's discounts. You |
| which one you'd like, test drive it, and get the numbers | | | | might save a couple of dollars more at another Dealer |
| on it. The average time from arrival at a Dealership to | | | | but do you really want to go through that whole 3-5 |
| driving your new car away is 2.5 to 5 hours so allow | | | | hour process again? |
| that and you won't get as frustrated. | | | | To summarize: |
| O.K. let's get to the numbers... | | | | - Pick a reputable Dealer |
| You've picked out the car you want and now the | | | | - Check the invoice |
| salesperson walks over to you with a long sheet that | | | | - Shoot for an "under Dealer cost" figure |
| has numbers on it he and the manager put together. | | | | - Be prepared to walk away and go somewhere else |
| Never, ever, accept what we called in the business | | | | if you have the time and inclination |
| "first pencil". These are the figures that you'll be | | | | I hope all this helps on your next trip out to buy that |
| presented with at first and I can assure you they are | | | | new car of your dreams! |
| what the dealer hopes to get - not what he can live | | | | |