My Store Uncategorized A Consumer’s Survival Guide For New Car Buyers

A Consumer’s Survival Guide For New Car Buyers

My Uncle Julius was a wise man. He drove a taxi in New York City for more than 30 years and before I could even apply for a learner’s permit he would caution me with these words, “When you buy a used car you’re buying someone else’s problem.” How right he was! But financial considerations often dictated that a new car purchase was out of the question and Uncle Julius’ admonition invariably proved true.

Around 1973 I bought my first new car, a Dodge Dart Sport, painted taxicab yellow. I was a relatively inexperienced driver and wanted to be seen. More importantly I followed the findings in the April issue of Consumer Reports which gave that car its highest rating. It was great advice for the time. Ralph Nader’s consumer campaigns for safer autos and quality built Japanese cars were emerging from their infancy while the Big Three auto makers reigned supreme. But even with CR’s recommendation my Dodge was a dog mostly because of the inferior technology and standards of the time. Fortunately, times have changed and cars have significantly improved thanks in large measure to the combined efforts of consumer activist Ralph Nader, the influential Consumer Reports, and the competition waged by the Japanese auto industry. What hasn’t changed is the selling practices of new car dealerships and for this reason alone a Survival Guide becomes necessary for serious consumers looking to purchase a new car. This writer has been through the ringer with new car purchases and the maintenance that follows so it’s with more than 30 years experience, like my beloved Uncle Julius, that I share what I’ve learned. Be prepared to be shocked.

Automobile dealerships exist to make a profit, they should, I don’t begrudge them at all for that. It’s a very tough retail business. Markups on car sales are particularly low in contrast to retail sales of other goods. For example, a dealership buys its cars from manufacturers for several thousands of dollars less than the Manufacturer’s Suggested Retail Price (MSRP), less confidential bonuses, incentives etc. The smaller the passenger car the smaller the profit margin. I worked in the fine jewelry business right out of high school and soon learned that the markup on fine jewelry was at least 100% with merchandise moving much faster than new cars in an automobile showroom. So the bottom line is this, dealerships are going to squeeze every dime from customers to meet their exorbitant overhead, payroll, taxes etc. but they must sell cars to stay in business while consumers want the best deal possible.

My first rule of thumb is take charge of your new car purchase before you need to buy a new car. What would you do if you suddenly found yourself without your trusted wheels? If you walk into a dealership the next morning unprepared, they GOTCHYA! Today, right now, decide what size car you need should that scenario happen and do whatever is necessary to improve your credit worthiness. Forget the televised “car ad hype” and the bosomy girls at car shows. This is serious business. It’s true that the best independent researcher of any model year car is Consumer Reports. If you’re not a CR subscriber go down to your local library and seek out their latest April issue and the April issue of previous years, the annual Auto Buyer’s issue. When CR’s April issue “hits the newsstand” in early March buy and save it as a reference. It’s their most widely circulated issue and for good reason, you’ll learn which car is the most reliable, cost effective and safest in its class. Whether you like its styling or not, ego aside, this is the car you may well give preferential thought to purchasing. The safety of you and your passengers should always be your primary concern as well as the vehicle’s reliability and predicted repair record.

Never, ever, walk into a showroom and volunteer answers to questions that haven’t been asked! The less you talk, the better your negotiating position. And don’t expect to finance the car through the dealership! That’s a major GOTCHYA that will cost you dearly. ARRANGE YOUR FINANCING IN ADVANCE! COMPARISON SHOP!! Your credit score will determine your best deal. If you’re a serviceman, veteran or immediate family member contact the Pentagon Federal Credit Union and if you’re service connected contact the Navy Federal Credit Union for quotes. If you don’t qualify for either and even if you do, obtain a baseline quote from neighborhood credit unions before checking with banks, and that quote must never exceed 36 months. Credit unions are very customer friendly in the event of unexpected financial problems. Timely communications with the local credit union can prevent a repossession which is more likely to occur if you finance through the dealership or bank. For rate comparisons click on the AUTO section in before making your final decision. NEVER talk “trade-in.” Plan to either keep the old car or sell it privately for maximum return.

There are several different plans and schemes that purport to offer good car deals. However, only two merit your consideration. The reason others aren’t worth much is that dealers don’t compete for your business or if they “COMPETE” they set the rules to assure their best outcome. An ingenious marketing partnership today combines Costco with area dealerships and the placement of a brand new car at the entrance to Costco with a sign that reads, “Ignore the sticker price. Members pay less.” The dealer sets all the terms, especially price. In addition to this scheme a car buyer’s magazine, “Costco Auto Program” awaits customers as they exit the warehouse. No competition here, its just another version of dealerships’ showroom but psychologically the car and magazine display are in an environment where prices are consumer oriented and the subconscious suggestion is that this deal is a worthwhile purchase. It ain’t!

Consumer Reports offers the second best technique to car buying. But beware, unless you, the consumer, are adept at handling price negotiations, (most of us aren’t) this technique probably isn’t for you. Basically, for a fee they help the consumer discover the price the dealership pays for a car (Dealer Invoice). From that starting point you, the consumer, “work up” to the price you’re willing to pay. This is a great technique but unless you’re experienced at handling negotiations of this sort the dealership will have a major advantage. The salesperson will try to “work down” from the MSRP to optimize their maximum return.

My favorite car buying technique costs upwards of $250, can save you as much as $5,000.00 (less than the MSRP), is available throughout the continental United States and is run by the online nonprofit To start the process you MUST know exactly what make and model you want to buy (including the number of cylinders, options, and accessories, see Consumer Reports) and forget about the color. Then, CarBargains obtains several commitments by phone from area dealers for your specific car. The dealers independently bid against each other for your business for the same car and you never waste time comparison shopping. So let’s say the lowest quote for your car “A” comes from a dealer 50 miles away but your nearest bidding dealership has the highest price. The strategy is this: call the local Sales Manager, the name is furnished by CarBargains, and set up an appointment to meet him or her and ONLY him or her! That person isn’t on commission whereas the salesperson works on commission and whose time is valuable when you take a test drive and don’t know enough about the car you want to buy.

When is the best time to meet the sales manager? ALWAYS between 8:15 P.M. and 8:30 P.M. – these folks have been at it all day and are itching to go home, they’re ready to close the deal (SELL) so take your sweet time! If possible, plan to buy the last week of the month so the dealership can meet its monthly quota. Of course if you need the car at the beginning of the month, you need the car at the beginning of the month! You MUST photocopy the lowest quote and bring at least two photocopies of the original (not the original) with you. Again, be prepared to have your Credit Union’s financing commitment in order and each person must have his or her own calculator to verify and understand ALL figures that go into the Sales Contract and don’t hesitate to challenge any dollar amount you want removed. It is not uncommon that the Sales Contract dollar figure will be higher than the verbally agreed upon price, so BE VIGILANT!! Any dollar figure that doesn’t make sense can be removed. If you’re a single female buyer enter the showroom with at least one male, calculator in hand. Sorry, no offense, but it’s the very nature of the beast. Only when asked, do you let the Finance Person know “This Is A Cash Sale” and decline ALL dealer attempts to finance through the dealership. Never exhibit “GaGa” emotions of buying a new car (pretend you’re buying asparagus) and don’t let yourself get talked into the seemingly endless options that will be thrown in your direction. Any option can always be added later by an independent at a fraction of the dealership’s price. Even the most basic cars today are factory equipped with necessary options, including air conditioning. All you want the dealership to do is match the lowest quote but its OK if you have to pay upwards of $300.00 to $500.00 for the convenience of a local dealership. Enter the showroom at 10:00 A.M. and you’ll be shanghaied all day with a salesperson running back and forth to the sales manager and both will be waving arms, shaking heads, grimacing in pain and looking to the ceiling for divine intervention. Guaranteed! It’s just “An Act” and nothing more than just “An Act”. The following paragraph will reveal the nonsensical nature of all sticker prices that as a car buying society we were programmed to believe had to be negotiated.

Consider this documented example of a consumer who purchased a new car using the CarBargains technique after relying on Consumer Reports for due diligence. Every brand new car has a federally mandated factory sticker measuring approximately 16″x9.5″ with predominantly blue and white colors and affixed to the side window. Its most important features include a listing of the standard equipment, mileage estimates, crash test ratings, and the facetious MSRP Holy Grail. The MSRP for this car is listed at $24,250.00, special edition discount less $900.00 or $23,350.00, destination and handling add $595.00 for a TOTAL VEHICLE PRICE of $23,945.00! Right next to this federally mandated sticker the dealer placed a much smaller DEALER’S STICKER boldly entitled, “SUPPLEMENTAL INFORMATION” in the same color design as the factory sticker and showing the “New” $23,945.00 MSRP with ADDED charges of $695.00 for APPEARANCE PACKAGE (whatever THAT is!), and an ADJUSTED MARKET VALUE of $995.00 (whatever THAT is!) for a new grand TOTAL PRICE of $25,635.00, Destination and Handling Included, which now costs $1,690.00 MORE than the Original “discounted” factory sticker price. Immediately below this NEW $25,635.00 price tag bold letters proclaim “This PROTECTING-THE-CONSUMER label is not an official factory or government sticker.” HUH?? YES, it is really written, “PROTECTING-THE-CONSUMER!” Unsophisticated buyers (and there are many) will pay this amount or one close to this figure. Using the CarBargains technique the consumer actually paid the  skup aut ruda śląska TOTAL PURCHASE PRICE of $20,762.10 or $4,872.90 less than the dealer hoped to realize. The car was a 2007 upgrade six cylinder sedan purchased in mid December, 2006 and based on the April, 2007 CR recommendation. This sale was a “win-win” proposition. The buyer paid a reasonable price and the dealer made a profit based on the CarBargains referral with less time expended on just “An Act.” I hasten to note with this new and realistic Total Purchase Price the consumer is still responsible for the state title tax, which now costs less money, and “nickel and dime” fees that might be negotiated. The tax isn’t negotiable, but the fees amounting to less than $500.00 weren’t challenged by this consumer. For the sake of clarity the terms TOTAL VEHICLE PRICE, TOTAL PRICE, and TOTAL PURCHASE PRICE are interchangeable and synonymous depending solely on the paper they’re printed on and represent the all-inclusive bottom line price for the vehicle.

As an aside, if your car purchase takes place between model years, consider buying the CR-reviewed model. While the few extra dollars you spend for the newer model might be worth more later when you eventually sell the car, there’s no guarantee the quality will be as good as the previous year. Followers of the Toyota Camry saga know that the 2006 V6 was one of their highest (CR) rated models, but the ’07 model was redesigned and downgraded to average. By 2010 this once great car was further downgraded to worse than average. In contrast, the ’07 Honda Accord V6 lead the field in this class but was also redesigned the following year and like the Camry was similarly downgraded to average status.

This article came to be written out of anger that resulted from being treated like a chump whenever I bought a new car. There’s nothing simple about new car buying. In many respects it’s a demeaning and demoralizing experience. Although it may seem that the dealership has the upper hand by controlling and exhausting the buyer in the negotiations, it’s the consumer who wields the real power by simply standing up, making a scene and walking toward the door (the buyer’s version of just “An Act”). This strategy usually sobers the sales staff to its senses and responsibility to sell the vehicle regardless if the vehicle is a basic sub compact, high end luxury or performance car, minivan, SUV or pickup truck.

Manufacturers are fond of claiming that their cars retain their resale value. That sort of advertising is only true if the consumer purchased the car for a reasonable price and financed it for no more than three years through a neighborhood credit union. Like the sign in the new car at Costco says, “Ignore the sticker price… ”

What about the dealership itself? Google the following term: CAR DEALERSHIP RATINGS. Several respected sites, including EDMUNDS.COM, post consumer comments regarding the Sales and Service Departments of individual dealerships and Edmunds also provides “MUST READ” articles under the heading “INSIDER SECRETS.” Know your dealership! These sites are worth their weight in gold. This is especially true when a dealership has many unfavorable reviews then suspiciously receives “five star” reviews. Caveat Emptor. Let The Buyer Beware. Don’t hesitate to post your own experience with your dealership on one or more websites devoted to this purpose. Your honest input is guidance to fellow consumers and might conceivably serve as a motivation to the unsavory operations to “clean up their act.” Now that we live in the Internet Age, it’s time for the auto industry to rethink its decades-old stale business model of retail auto sales with better quality cars that are more affordable and sold without resorting to high pressure and deceptive sales and service gimmicks. The technology exists.


Leave a Reply

Your email address will not be published. Required fields are marked *

Related Post

These types involving on-line gambling gambling dens normally offer unconventional and repayment

Casino invariably is a web version regarding conventional casinos. Casinos an individual go to be able to, to learn black plug or cleanly slot machine game devices. Online gambling dens

Most Slot machine games Internet casino – One of several Most significant On-line Casinos

Most Slot machine games can be perhaps the renowned Jackpot Manufacturer class and is also entirely qualified with the Kahnawake Games Power. The web page has been in lifetime considering

The Differences Between Online Poker and Offline Poker

Online poker you can play anytime you want — 24/7 365. You can play it in total comfort, right from your own home, wearing whatever you like (or nothing at