When a consumer shops at a dealership there are certain things they should expect. They should be treated with respect, obtain honest and candid answers to their questions, and have things explained to them which they might not understand. Additionally they should be given various options throughout the buying process. Consumers buy cars only once every three to five years and salespeople sell cars every day; so do not hesitate to ask “a dumb question.”

If at any time you feel you are not being treated properly I suggest you leave and visit another dealership. You also have the right to ask for another salesperson to help you, if you feel your original sales person is not meeting your needs. Sometimes people just don’t click, so speak with a manager and politely ask to work with another team member. If the salesperson did something specific to offend you, inform the manager of that too, so they can address the issue.

1. Let the salesman know if you love the car

Why pretend you could care less about a vehicle if you really want the vehicle. The fact that you like the vehicle is a good thing. If there are functionality issues the salesperson can provide information that can validate your love of the vehicle or point out potential issues and steer you to a better solution. You might love a little two door coupe, but you shared you are getting married in three months and that may mean a family is coming soon. The salesman can point you to some sporty sedans that are fun to drive but have more room for car seats. To think they will boost the price of a vehicle just because you like it is silly. Most dealerships mark the price on the vehicles. Don’t be afraid to ask the price and how it compares to the market values.

Some folks mistakenly think cars you’re not in love with are a lot cheaper. That usually isn’t the case. If you want to buy an unloved car there are often odd colors and cars that have been sitting on the dealers lot for awhile; and dealers will be happy to show you them and provide more aggressive pricing.

2. Tell them if you need a car by tomorrow

Let’s bust this myth right now. Just because you need to buy a car right away doesn’t mean a consumer will pay ridiculous money for the vehicle. If you need a car quickly let the salesperson know so they can make sure title work and all the purchase documents can be prepared in your time frame. If financing has to be arranged the dealership can expedite that too. Consumers still need to be aware of vehicle values, budgets and their credit standing. If a consumer feels they are being rushed or pressured into a purchase, they can always leave the dealership, rent or borrow a vehicle for a few days, and look for other alternatives.

Believe it or not dealers can be sensitive to your time frame and some dealers even have return policies which let you select another vehicle if you feel the first one you chose is not the right vehicle for you. Ask about their policies upfront.

3. Share your monthly budget

Uninformed consumers fear if you share the monthly payment that is acceptable you will be oversold a vehicle for an extended loan term and the dealer will make a fat profit. For as long as I can remember customers have been asking for a payment of $250 a month. Today, $250 a month will finance an $11,000 car for 48 months at a 5% interest rate. Not a realistic payment if you are looking for a new car selling for $18,000 with no money down.

Before going to the dealership, consumers should use online loan calculators and figure out the most they can finance, and remember to include the down payment (and/or trade in equity) and taxes in your calculations. You can also call any bank branch or credit union and they will quickly calculate loan payments for you. Your sales person or a manager at the Dealership can also provide generic payment information from their managers to keep focused on vehicles within your budget. Remember your credit worthiness will also impact the interest rate on a loan.

4. Talk about your trade-in up front

So called experts often mis-advise people and say, never tell the salesman you have a trade. This is a big mistake and also makes you a liar. You don’t want to start any relationship by lying. If you have a trade-in and still have a balance due to the bank or credit union, you need to call and get a payoff quote. You need to know whether you have equity in your trade-in or negative equity. Negative equity means you owe the bank more than the vehicle is worth in the market. Obviously this is not good unless you have lots of cash around to make up for the negative equity.

The challenge comes when trying to figure out what your vehicle is worth. Well it’s worth exactly what someone will pay you for it. Also, please don’t tell the dealer that the book says your car is worth $$$$. Books do not buy cars. That’s why they are called guides. Do not expect a dealer to pay you the retail book value for your trade-in. If they pay you retail how can they mark it up and sell it on their lot for more than retail?

There are certain realities in the marketplace and that means some vehicles depreciate more than others. Do not be insulted by the value a dealer puts on your trade-in. You can certainly negotiate the value, but if you have a vehicle with a V8 engine or large SUV  and gas prices are high, be prepared to deal with a valuation below market value as these units might not be desirable in the market. Remember if you don’t like the deal you can always shop elsewhere. By being realistic about your trade-in value and the monthly payment, dealers can try to help you reach your goal of buying a new or quality pre-owned vehicle.

5. Ask whether you should consider leasing

Leasing is a great option for some consumers. First off understand a lease is nothing more than a long term rental. You agree to lease (rent) the car for a specific term, not exceed the allowable mileage and return it in good condition. Ask yourself these three questions to see if you are a good lease prospect.

1. Do you like to trade in your vehicles every four years or less?
2. Do you take very good care of your vehicles?
3. Do you drive less than 18,000 miles a year?

If you answered yes to these three questions you are a good lease prospect and should inquire about lease programs on the vehicles you are considering buying.  You will also want to check the insurance regulations in your state. Some states require higher limits of liability insurance when you lease a vehicle.

6. Discuss your credit situation up front

In our current environment over 50% of consumers have some credit issues showing on their credit reports. The good news is most dealers work with a number of banks to help shoppers with varying degrees of current or past credit problems. Here is another case of doing some preliminary work to understand your credit score and to calculate a debt ratio (this is the portion of your monthly debt/obligations versus your monthly income). Lenders look at your past credit, your ability to pay based on your current obligations and the amount of equity you have in the vehicle.

If you put no money down the lender is taking a greater risk on the loan and this may impact the loan term or interest rate tier. Most finance and lease ads from dealers or vehicle manufacturers always indicate the loan payment shown in the ad is reserved for those that qualify.

You may want to call your local bank or credit union and ask what their current loan rates are for new and used vehicles and take that info with you. Dealerships work with a variety of lenders and can usually match or provide a lower loan rate than what you may have been quoted.

 

Mark R. Dubis is a writer and auto retail expert with over 25 years working in the automotive and financial arenas. He was a vice president for the automotive finance divisions of KeyBank USA and National City Bank in Cleveland, Ohio and a co-founder of Carfolks.com.   His office phone number: 216-712-6712

Auto dealers may copy this article in its entirety and post it on their websites or blogs to inform their customers and prospects about the shopping and auto buying process.  

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