Buying Tips
 
 
BUYING TIPS

Regardless of the decision you have made of purchasing a new or a previously owned vehicle, foremost in mind is receiving a good quality vehicle at a reasonable price. Perhaps this is your first vehicle purchase or you simply don’t enjoy the process of purchasing. It is our intent to enable you to become an educated and relaxed shopper by reading the tips provided. Always remember that supply & demand are the two factors that most generally influence pricing and, on occasion, some vehicles will not be discounted.

We can’t offer you a script to follow when visiting the dealership but we do encourage you do write down the questions that are important and have each answered by the sales representative or a member of management. Women, by the way, are far superior to men in this area (please see item #22, Women Shoppers). When you visit the supermarket you take a list of items to purchase. If you miss something you can pick it up on your next visit. Not quite so with a vehicle because statistics show that it will be years before you purchase another vehicle. Do it right the first time and start now by jotting down items or questions that are important to you.

  1. Being honest.
    According to Frank Phillips, President of FCP/SalesMasters a national sales recruiting and training company for the automobile industry, the most common misconception of new people entering the auto sales field is that honesty has little importance. He teaches just the opposite to new hires and seasoned sales representatives. From the beginning of the sale to the closing and delivery, he encourages honesty as the only practice to observe. And, yes, his research reveals that honesty is important for the buyer as well. Many buyers feel that giving false information to the sales person is fair and will, somehow, allow them to receive a lower price. The deceptive practice of saying “no, I’m not trading my car” and then later thinking that you can “spring the trade” on the sales person is perhaps at the top of the list. More on this later.
  2. Communicate.
    Contrary to what you might think, automotive sales people do receive training and hopefully you will be working with one that has received instructions on how to be a good listener. Why communicate? What happens when you visit your doctor, dentist, attorney, tax consultant or financial advisor? Don’t they ask you questions to evaluate your situation? Aren’t they asking in your best interest? How can they assist without correct input from you? Sure we know that these are professional people and you’re entrusting them with your savings or health. But aren’t you putting trust in the sales person to make a commitment to purchase a 10, 20, 30, 40 or $50,000 automobile? For instance, the sales person tells you that the service department is outstanding. Why don’t you walk back and ask to meet the service manager and learn for your self what the policy is on a loaner vehicle or rental vehicle if there is a problem covered under manufacturer warranty. What if you drop the vehicle off in the morning, do they have a shuttle service or can someone drop you off at work?
  3. Prepare.
    Read about the vehicle you have in mind by visiting a local dealer and picking up a brochure or by visiting the manufacturer’s Web site. You can also visit the Recalls/Safety page on the site you are viewing now and find information that might be useful. Some dealerships have inventory that be can be viewed during the hours that they are closed. This is an ideal time to browse and look at exterior/interior color combinations, equipment packages, engine sizes and more.
  4. Calculate.
    On this Web site you can use Calculators that will assist you in determining what type of payment you can afford within your budget. Try doing it like the professionals by jotting down how many monthly payments you have on one side and then jotting down how much income you have on the other. Be completely thorough and allow for clothing, rent or mortgage payment, food and household expenses, utilities, gas, entertainment, charge cards, vacations, insurance, and all other monthly expenses. Deduct these expenses from the total income and this should provide a “ball park” figure of what you can afford monthly for a vehicle loan.
  5. Rebates or 0% financing.
    Most rebate programs offer you the choice of taking the cash, applying as a down payment or 0% financing on your loan. You make that decision, not the dealer. Be cautious and don’t be surprised if you can’t resist applying for the 0% financing but find that you don’t qualify (more than 9 out of 10 applicants fail to qualify) and a higher rate is quoted. This is the point where you should finance with your credit union and utilize the rebate as the down payment.
  6. Test Drive (new).
    Loosen up and don’t resist the opportunity to drive the vehicle you very well might purchase. Looking at and driving an automobile are not the same. Don’t use the lame excuse of not testing because “its a new car and nothing is wrong with it.” You are correct, mechanically nothing is wrong with the car but how about room for your head, shoulders, legs and any other drivers/passengers of the vehicle. Be honest with yourself and don’t try to buy on price alone. There are to many competitive makes and models to settle on something that you will dislike from day one. Go ahead, take the keys and drive the vehicle. Believe this, new car dealers are concerned with CSI (Customer Satisfaction Index) and absolutely want you to drive the vehicle. It is not necessary to have a sales person riding with you. More on CSI later.
  7. Test Drive (used).
    This is your opportunity to drive in the city, country, freeway and at high speeds and low speeds and in stop and go traffic. Does the vehicle handle the way you expected? Does the cruise control work? How about the sound system, power brakes, tilt wheel, power door locks and are there funny sounds that might indicate something could be mechanically wrong? Once you have made the purchase it will be more difficult to negotiate the repair of defective items so do it upfront before signing on the dotted line and owning the car. Waiting an extra day for delivery will not hinder but certainly could help in the long run.
  8. Sticker Price (new).
    Prior to visiting the dealer you should be reviewing the Black Book pricing page found under Car Prices on the left hand menu of this Web site. Black Book provides new car MSRP (manufacturers suggested retail price) that is commonly referred to as sticker and also dealer invoice including transportation and the percent of markup from dealer invoice to retail. It does not show dealer hold back. Hold back is a percentage of the cost of the vehicle that the manufacturer retains. This amount is generally 2% to 3%. Many helpful hints that are posted on Web sites will encourage buyers to negotiate down to invoice and then start negotiating to have the sales person reduce even more or part of the hold back. First, you must under-stand that the hold back is only refunded to the dealer quarterly or annually. Secondly, do some math. If the dealer paid the manufacturer $20,000 (cost or invoice) for a vehicle the hold back would be 2% or $400. Third, if negotiations reach this point it will be stressful and what could be a pleasant buying experience could turn sour quickly. We suggest that the less said about dealer hold back the better. When reviewing Black Book new car prices be sure to utilize the upper right hand corner where it will give you a choice of Vehicle Base, Interior /Exterior Colors, Major Changes (from the previous year model), Optional Equipment, Price Includes, Residual Adds and Deducts and Standard Equipment.
  9. Addendum Sticker.
    This is a sticker that is added when the dealer installs items such as “window etching” or aftermarket items. It does increase the cost of that particular vehicle and is open for negotiation. If it is something that you do not want or need, have the sales person locate or order (usually only domestic) one from the manufacturer if the model year is in production.
  10. Used Car Pricing.
    The prices you see under Used Cars for Black Book are averages for many vehicles and are not necessarily the price of your car. All to often buyers feel that they should be receiving retail for their trade-in. It can’t be done. The basic business principle of wholesale to retail is standard in all industries, not just the automobile business. Regardless, of where you work (or retired from) your business must make a profit. No profit, no job. If you are trading your vehicle, look at Black Book Trade In Value and compare to what the dealer is offering you. Remember there are different levels of value for vehicles such as clean, average and rough. Look at your vehicle with the dealer to determine the value of your trade-in. Pricing with Black Book is done on a state-by-state basis so scroll down and click on your state and then enter the correct mileage. Black Book pricing is the most accurate and current pricing found in the marketplace. Unlike guide books that publish once a month and are some times week old, Black Book is updating constantly and the prices you find on this Web site are reliable and current.
  11. Buyer’s Guide.
    A Federal law requires that dealers display a Buyer’s Guide on used vehicles. This guide will indicate if the vehicle is being sold “as is” or if a warranty is included. If the warranty is included there should not be an additional charge. Do not confuse warranty (which is included in the purchase price) with an extended service contract. An extended service contract is purchased separately and normally the expiration date, in either time or mileage, is longer than the warranty. A copy of the Buyer’s Guide should be given to you
  12. Trade-in.
    This is a personal choice. Thousands of people sell or attempt to sell vehicles on their own. Some have success and sell their used vehicle without problems while others find it to be a difficult, time-consuming and unpleasant task. If you are attempting to sell on your own, use the Black Book pricing provided on this Web site and price your vehicle accordingly. If you have dents, dings, scratches, burns or torn upholstery, chipped or broken glass, worn or mis-matched tires or a combination of all, don’t price your vehicle as extra clean or clean. You should be looking at average or rough. Do a AutoCheck VIN search to show the history of your automobile. There are numerous articles written about getting a price from a salesperson and telling them that you will not be trading your car. Then, after getting the price, you tell them “that you have decided that you will trade” and that by doing this you will get a higher price for your trade-in. This is not true! Why would a trade-in be worth more by doing this? Did the wholesale price change? Did the trade-in increase in value within a few short minutes? The answer to all these questions is no, absolutely not. Be up-front with the representative that you are working with from the beginning and they will do anything within their control to get you the best price on your trade-in. There are some steps to follow before visiting a dealer and having the used car or wholesale manager evaluating your trade. Wash and waxing is an easy process and cosmetically will offer a more presentable vehicle. Cleaning the interior upholstery and emptying and discarding trash is helpful. Clean the trunk and remove all items that clutter. Clean the interior glass and remove any stickers that aren’t required by law. Usually the oil is checked when the used car manager is pricing a trade-in so have your oil changed before trading.
  13. Recalls.
    Click on the side bar menu for Recalls/Safety and find the most updated information available provided by National Highway Traffic Safety Administration (United States Department of Transportation).
  14. AutoCheck.
    A VIN Search allows buyers to do a vehicle history report on a used vehicle. Visit AutoCheck by clicking on VIN Search on the side bar menu of this Web site for more detail.
  15. CSI.
    Dealers are rated in several categories according to the Customer Satisfaction Index (CSI). Periodically, when purchasing a new vehicle you will receive questionnaires regarding your purchase. Sometimes you will receive what appears to be a duplicate mailing, one from the dealer and another from an independent company that gathers data, sorts and rates vehicles and dealerships for the manufacturers. It is important to complete the questionnaire and return for several reasons. Mainly, it has been instrumental in providing feed back to dealers that was sorely needed to upgrade and improve their business. How, for example, would a buyer evaluate the ride of a vehicle if a test drive wasn’t offered. How would a manufacturer know that it was difficult to operate the cruise control or adjust the seat or a multitude of items if the consumer didn’t response?
  16. Upside Down.
    This is a term used in the industry that simply means that the balance owing on a trade-in is greater than the current value. The correct terminology is “negative equity” or “value of a property less debt.” With a good credit rating many buyers are able to trade and secure financing on another vehicle. Remember, as stated before, be cautious when purchasing because you could have the vehicle for a long time.
  17. Inspection.
    If you are purchasing a used vehicle, it is essential that you have it inspected by a repair shop of your choice prior to the purchase. It isn’t very expensive and most national franchises (brake, muffler, tune up shops) have a checklist of items that will be inspected. For a sample of that listing go to Car Prices on this Web site and click on Used Car Guidelines. If an item is faulty you must have the dealer do the repair prior to delivery. Some states require annual inspections or inspection at time of purchase of all vehicles. If this is applicable to the state where you reside, insist that the dealer will guarantee that the vehicle you are purchasing will pass inspection or that the dealer will repair, at their expense, any item failing inspection.
  18. Options.
    This is truly a personal choice. Some buyers want cars loaded (all the options available) while others want only the essentials. You might find that from one trim level to the next higher, you receive more options at a reasonable or packaged price. That is why we encourage shopping at your leisure and comparing prices of one model to the next. Many options do not hold their value so don’t be surprised that at time of trade-in that the used car manager doesn’t offer extra. We reviewed one model new that had a power sunroof, power seats and leather interior. Cost of these options when new is $1300 but 5 years later at trade-in the value is $400.
  19. Aftermarket or Menu.
    After the sale transaction is completed the business manager at more and more dealerships will offer a menu of items that can be purchased. Extended service contracts, credit insurance and GAP insurance to just name a few. This, again, is a personal choice. You review with the business manager and determine the merit of each item. You are not obligated to purchase any of these items. If the item has already been installed, look for another vehicle or negotiate the price of the option.
  20. Best Time to Buy.
    Dealers usually sell about 50% of the total number sold for the month between the first and twentieth. The remaining 50% are sold during the last one-third of the month. Dealers have quotas and sales people have quotas to attain. Traditionally, the “push” to achieve these quotas is toward the end of the month. This should result in a better price for you. However, you might find a better selection earlier in the month before inventory is depleted from the month end push. You can negotiate just as aggressively at the beginning of the month if you are prepared with the information from this Web site. Do not shop when you are busy, tired, rushed, late, or any other time that you are not comfortable? You will not be as sharp mentally as when you are well rested and time is not a concern.
  21. Fair Price.
    When you have completed your purchase and you believe the sales person has worked to uphold his part, and you feel that you have received adequate and honest attention, this then should be fair. If a vehicle has an addendum sticker loaded with dealer-installed options, we suggest you move on to another car or another dealer. This is sometimes a distraction in that the dealer wants you to negotiate on the addendum sticker not the MSRP. If you are buying or selling a house there is a listed price and a selling price, which is not always what it is listed for. The MSRP determines the “listed or asking” price of a new vehicle and you, through negotiating should receive a price better than the asking price.
  22. Women Shoppers.
    Women make up 51% of the U.S. population, almost half of the adult female population is single and about 57% of single women are homeowners. Women own 38% of the businesses and 43% of individuals with assets over $500,000 are women. A current book is available that provides information of this nature to auto sales people. Why? Statistics show that women either make directly or influence 80% of all automotive purchases. Sales people cannot assume that a woman shopper is simply looking for a pretty color and nothing else is important. Women buyers want to know about reliability, safety and security. Keep this information in mind while you are shopping and if the sales person doesn’t respect you as a buyer, find one that does.
  23. Automobile Purchase Plan.
    This Web site provides information that is extremely valuable for vehicle purchasers. Our company does not offer a buying service nor do we arrange for dealers to pre-set prices. A buying service, although sometimes seemingly free of any fee, is a middle person and increases the price of a vehicle. Pre-set pricing can also increase the price at various times. What if this price is set when supply of a model is limited but not adjusted when inventories are high? You could pay more. In our opinion a shopper should be presented with the most accurate and current information available. Once the research has been completed, visit the dealer of your choice and prepare to negotiate until you arrive at what you feel is a comfortable business decision. If you have a copy of Black Book pricing (new or used) and rebate information available while conducting the transaction you have leveled the playing field to some extent. Under no circumstances should you feel pressured. If you are uncomfortable and not 100% satisfied, end the discussion and simply say “thank you” and “good bye” and take time to review. Remember, purchasing a vehicle should make you “feel good” and it can be done successfully.
  24. Financing.
    We encourage you to discuss financing arrangements with your credit union prior to signing any retail installment agreement. The only exceptions are those credit unions that have business agreements with select dealerships that provide the convenience of completing the credit union contract at the dealership. Since the on-set of zero percent financing, buyers are confused about the special interest rate or cash rebate. The confusion should be eliminated and a credit union loan officer will assist you with the decision that is in your best interest.
  25. Intimidation.
    Many of us remember a book titled Winning Through Intimidation. Intimidation was a result of preparation. When you visit a dealer be prepared. Have your questions ready, know what type of vehicle you have in mind, review pricing prior to your visit, test drive, and read all the details pertaining to any additional add-ons (do you actually need and what benefit will it serve). Call or visit your credit union prior to the purchase or call your credit union from the dealership to discuss financing. If you feel you are being pushed or rushed to purchase, then step back and excuse yourself until you feel you have reached the correct decision. Buying a car should be a pleasant experience. After all, next to purchasing a home, what larger purchase will you make? Frank Phillips, President of FCP/SalesMasters, encourages sales people to assist the buyer by making them “feel good” throughout the vehicle buying process. Why, he reminds sales people, would a buyer spend their money with you if they didn’t feel good? Therefore, don’t be intimidated but do “feel good” about what you are doing.

 


 
 

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