Guest post: How to beat the dealership at their own game
Buying a new car is an exciting time. There is such a vast array of options and dealerships to choose from that it’s easy to become overwhelmed by an overly pushy car dealer. Unless you’re friends with the dealer, there is a legitimate chance they’ll try to take advantage of your trusting nature. The average dealer marks up interest rates by 2.7% — one of many mark-ups new car buyers can avoid by simply doing a bit of research before arriving at the dealership.
A car purchase is a big expensive for just about any budget. In fact, buying a new car is one of the most expensive purchases most of us will make in our lifetime. Around 90% of prospective car buyers conduct an online search before buying a vehicle, while around 48% of people spend 1-3 months browsing and researching before making a purchasing decision.
Car dealers benefit from each vehicle they sell via a commission. They will often do anything to get that commission, especially if it involves persuading an impulsive buyer. About 38% of consumers make a purchase within four hours when buying a car, which is the type of buyer car dealers crave for each day — the type who doesn’t have the time or patience to research a car or its offered price.
Car dealers are able to manipulate impulsive buyers, either by raising the price or even initiating some popular car salesman scams. One of the most popular scams is the bait and switch, where the dealer advertises a too-good-to-be-true price, purely as a way to get prospective customers to the car lot. Upon learning that the price is different, many customers will leave – but the more impulsive buyers will remain.
Other scams include the aforementioned dealership financing, which can result in significant interest, as well as fake fees and yo-yo financing, where buyers drive off the lot in their new car before financing comes through, only to be told by the dealer a day or two later that their financing fell through and they have to finance with a different lender at a 5% higher rate.
Clearly, dealing with car salesman can be stressful and financially complicated, but simply being an informed customer will go a long way toward getting you a car at a fair price. For a more detailed look at how to get a fair price at the dealership, check out the infographic video below, courtesy of CJ Pony Parts.
