A savvy, well informed and well prepared shopper is often a car dealer’s worst nightmare. If you’re in the market for a used car and have seen a great sounding offer online that you like, the biggest mistake you can make is to immediately respond by visiting the dealership on your next day off.
That is exactly what the dealer wants you to do, and buying a car in this manner could easily cost you thousands. Unfortunately, this is the mistake a lot of unassuming car buyers make when purchasing their car.
The dealership’s singular goal is to draw you in using powerful incentives such as “0% interest” or “no money down”. Whilst at the dealership, you’ll be dealing with slick, expertly trained salesmen who will use every trick in the book to get you to spend as much money as possible. You need to be educated, informed and well prepared before you even think about making your way to the dealership or you may end up losing your shirt in the process.
Perform online car research.
When you have narrowed down your choice of used car to a specific model that has all of the features you want and you’re happy with its reliability and safety, the next step in the buying process is to perform online research. Your ultimate objective is to get the cheapest cost possible for the car. It is important however, that you are comparing apples to apples when researching price.
Consider other elements of the sale that you’ll be interested in: extras, interest rate, service contracts, etc. Get a quote from several free, objective and reliable internet sources so that when you walk into the dealership, you have a good idea of what a good deal would be for the car. In addition, check out reviews on consumerreports.org to find out what previous buyers are saying. Keep in mind that around 10% of car owners will want to change the car they already have just for the variety.
However, if over 80% of polled owners say they would never buy the same car again, you’ll want to search for an alternative. On the flip side, if there has been a large purchase of a particular model and more than 70% of the polled owners say they would buy the same model again with their hard-earned cash, you have yourself a winner.
Use the following sites to do complete your research:
- Kelley Blue Book
- The Black Book
- Car and Driver
- Sam’s Club:
- National Automobile Dealers Association (NADA)
Choose the right dealership.
If the car has great reviews, search for three to five dealerships closest to you that have that car. It is important to be very selective when choosing a dealer to do business with. Research the dealers to focus on dealerships with the best reviews.
Stick to dealers that have been in business for at least five years. Check out what previous customers are saying about the company on Yelp, Trust Pilot and other review sites. Contact your local consumer protection agency, state Attorney General (AG), Citizens Advice Bureau (UK) and the Better Business Bureau (BBB).
Anything short of an A rating and you should look closely at the complaint section to find out if there have been any unresolved complaints. However, you should also keep in mind that there will always be people who complain about anything and everything, and are never satisfied no matter what. So don’t dismiss a particular dealer just because they have an unresolved complaint. Read the complaint to get a sense of what type of company it is.
Buy at the right time.
Some of the best deals can be had by buying a car at a time when dealers are ready to make great deals. If possible, wait until the end of the year before you buy, as there will be greater incentives for dealerships to negotiate. Most dealerships work on a bonus system. In December, car companies and car dealers are trying to sell as many vehicles as possible to boost sales and revenue numbers for the year that is coming to a close. If you can wait to buy a new car at the end of the year, you should have no trouble getting a great deal.
- The end of summer is the best time to take advantage of extra rebates and incentives as car companies are switching production from current model year vehicles to next year’s cars, truck and SUVs.
- End of the month – Sales people and dealers are trying to move as many vehicles off the lot as possible to qualify for bonuses from the auto manufacturer and to maximize their pay checks. These are great times to strike a good deal.
- When visiting the dealership, be sure to go there around one hour before closing time when everyone wants to go home.
- The worst time of the year to buy a car, particularly a used one, might be spring. This is because there are more buyers which means more opportunities for dealers to sell without offering big discounts.
Take the right documents with you.
When you go into the dealership to discuss financing, you need to bring along your paperwork that will allow a dealership to establish who you are and confirm that you have a job, that you have a history of making monthly payments on time and have friends or family the dealership can contact to find you if you stop making payments.
Be sure to bring in your credit report and credit scores from all three agencies, in case the dealership insists on using their preferred credit agency. This strategy will allow you to shop around for the best deal, but without lowering your chances for approval and better rates in the process.
Let the dealership know straight off that you’re ready to buy if they can offer you the deal you are looking for. Provide a print-out of the report given by the credit bureau to the finance manager at a dealership, and don’t let them do a credit check until you’ve struck a deal. They should be able to evaluate whether or not you’ll qualify for financing from them based on the score you show them. Take the following items with you:
- Your credit reports from all three reporting agencies.
- Your credit scores.
- Proof of auto insurance
- Social security number (U.S.)
- The most recent pay stub from your job
- Proof of address – your utility bill (gas, water, electricity)
- Your driver license
- Three personal references