How to find the best deals on buying your next car or truck!
Monday, May 24th, 2010Are you in the market for a new car or truck? Are you thinking of replacing one of your vehicles with either a new or used vehicle? Well there are some things that you need to know if you want to save some money and not make the dealer rich. There is a reason why car dealers are all millionaires – they know how to get as much profit and as much money out of your pocket as possible.
Car dealers don’t just sell you a vehicle – that was the way it was back in the 60s and 70s. Nowadays they sell you the vehicle, the financing to go with the vehicle (which most of the time makes them more money than selling the vehicle in the first place), extended warranties (which they always double the price on), and numerous other gizmos and things you’ve never heard of before to help supposedly protect your car that you’ve purchased.
Are any of these things were what you would pay for it the dealer had his way and you paid top dollar – absolutely not. Some of the things dealers have sold in the past and that still continue to sell today are actually borderline fraud. So don’t let your dealer befriend you because that is their whole mission and then they can fleece you blind. So how do you best prepare to go into a car dealership and get the best deal possible?
Do you have cloudy or worn headlight lenses?
First, do your homework, you would be amazed what you can find in just a few minutes reading a half an hour on the Internet. You can easily find the invoice prices, the true cost of extended warranties and even pull your credit and get preapproved for a car loan with a great rate (be sure and avoid any financing through eBay for car purchases as whatever the company was last time I checked on their they were charging flat rate to everybody regardless of how good your credit is at 16% – which is a flat-out ripoff). So with the Internet is so available and all this information so easy to access, there is no excuse for you not to know what the dealer’s true cost is and where he should be targeting for your car purchase price. If you take the invoice price and at a few hundred dollars to it – you can buy almost any car at this price if you stick to your guns and you have the proof to show that you know what the price and costs are.
Now some dealers and their management staff will lie to you and tell you that the invoice price does not include transportation costs or that it doesn’t include cleaning and caring for the vehicle – this is all hogwash and lies as it will tell you that on the window sticker of the car that this is all taken care of by the car manufacturer. If you really want to have fun with the car dealer looked up dealer hold back. This is what the car dealer is paid by the manufacturer to help with advertising and other various costs so the car dealer doesn’t even pay the invoice price. It is true cost is the invoice price minus the dealer hold back and then minus any other rebates to the dealer or sales incentives. So even if the car dealer sold you the vehicle at the dealer hold back price he still making a profit. But a fair price to target and never waver from is take the invoice price and add $300 to it.
That is a very fair price and the dealer makes a healthy profit there. Besides if the idiot sales manager doesn’t want to take your offer you can rest assured that his competition will. Also be sure and check out your local credit unions as many of them offer some really great used car financing rates that none of the car dealers can touch. And you will feel much better going to the car dealer having already been approved and knowing what your rate is. Because then the car dealer can only beat your rate. They can’t give you a higher rate because you won’t take that. And you’ll feel great being armed with the true cost of the extended warranties. So when the finance manager shows your price of $2500 tell them no and that you wanted for the same price they would pay from their own car which is $1200. Why should you pay a $1300 profit for an extended warranty? Oh but millions do because they don’t do a little bit of simple homework on the Internet.
Next, take your used car trade in out of the picture. You are always better off selling it on your own. Especially with craigslist being free and having far better results than your local newspaper classifieds you have no excuse not to try and sell your vehicle on your own. Just by selling your vehicle on your own you’ll put another, on average, $3000 in your pocket. Is it worth it to sell your vehicle to get that extra $3000? Well the average American family makes $42,000 a year. If you take out both state and federal taxes because it’s not your money, and let’s assume just a 30% total tax rate (your tax rate might be hire and upwards of 35% but weare just going to use 30% here for simplicity sake), you are left with $29,400 a year. Now the average family spends one third of their income on their housing so that leaves $19,404 a year. The average family spends around $5000 a year on food and another $2500 on gas. That leaves $11,904 a year. $3000 is a little over 1/4th of the average family’s real budget! And unless you’re in the group of people that makes well over what the average family makes then you definitely should give some serious consideration to selling your vehicle rather than trading it in!
So if you do a little homework on the Internet you can literally save yourself an easy $5,000-$10,000 on your next car purchase. All it takes is a little bit of time on the Internet and it isn’t hard to find the invoice prices, the true cost of the extended warranties and all the other items the car dealer’s staff is going to try and sell you on. Plus you’ll save money by having your financing already in hand and knowing what your credit score is so the car dealers finance manager can’t play games with you to make it sound like your credit is worse than it really is – and yes they really do do this every time! It’s exactly what they’re told to do and taught to do in their classes that they have to attend a become a finance manager in the first place, plus their compensation plan requires them to do this.
So take some time, go on the Internet and Google keywords and search terms like invoice price and true cost of extended warranty. Stop paying for the car dealers expensive country clubs, million-dollar mansions, Ferraris and Bentleys and their private jets. Keep your money in your own pocket you work hard for it and you and your family deserve to keep as much of it as you can!
