7 Things You Shouldn't Do in a Car Dealership
Many people give tips on what to do at the dealership when it's time to buy a car. And tips on test drives, negotiating, and financing are valuable. But the road to buying a car is so full of rocks that if you're not careful, you could stub a toe or even, metaphorically speaking, break a leg. Buying a car can be such a complicated process that knowing what not to do at the dealership can be even more important than knowing what to do.
If you do one or more
of these seven things we advise against, you will have a hard time getting a
good deal. Don't make it harder for yourself. You want to get the right vehicle
at the best possible price. That's why you should avoid the following when
visiting the dealer :
1. Do not enter the
car dealership without a plan
You can stroll into a
restaurant not knowing what you want to eat and get a good meal. You can stroll
into a big box store just to kill some time and come out with a decent
microwave or a button-down shirt. But if you stroll into a car dealership
without a plan, there's a good chance you'll come out with a crater-sized hole
in your bank account. Not only that, your wasted Saturday morning could haunt
you for years to come. Buying a car shouldn't be an impulse purchase. Know—not
guess, but know —what your current car is worth, what the car you want
to buy will sell for, how much money you can put down, and how much money you
can spend on a monthly car payment. Knowing all of this up front will put you
way ahead of most car buyers.
You can be
in and out of the car dealership in less than an hour
2. Don’t let the
seller pressure you into a vehicle you don’t want
Typically, a
dealership always tries to sell the vehicles it has in stock, Fuller told us.
And that's not always in the customer's best interest. "If the salesperson
really knows the inventory, he or she will try to get the customer something
that can be sold today," Fuller said. If you don't specify exactly and
clearly what you want, the dealership will try to sell you a vehicle it wants
to get rid of, even if it's not the best for you. Don't let them talk you into
a car.
Should you
order your next car or buy from the dealer's inventory?
3. Don’t discuss your
trade-in too early
It's almost always
possible—with time and effort—to sell an old car privately for more than the
dealer is offering at trade-in. Still, many buyers find it tempting to just
sell their old car and drive away with their new one. If that's your goal,
research the value of your trade-in car beforehand, but decline offers or
pressure to talk about it until you've priced the new car. If it turns out
you're "in the red" on the old car—that is, you owe more money on it
than you'll get at trade-in—you probably don't belong at a new-car dealership
yet. At the very least, the car
should be sold privately to pay off the debt. Yes, the dealer will offer to roll your old debt
into a new loan. But that's not a good idea.
4. Do not give the
dealer your car keys or your driver's license
It's almost as
anachronistic as a pocket watch, but some dealers -- thankfully fewer than
ever, according to Christopher Sutton, vice president of automotive sales at JD
Power -- still use tactics designed to keep you in the showroom until a deal is
made. Some of the tried and tested and not-so-tried tactics revolve around test
driving vehicles. Before a test drive, the salesperson may ask for your car
keys and/or driver's license "as collateral." Then, when you want to
come back and leave without buying anything, the car keys or driver's license
are gone. "We don't see that as much anymore," Sutton told us,
referring to abusive dealer tactics. "And I think the advent of ratings
and reviews online ... has contributed to that."
Yes, a smart dealer
will need to make sure you have a valid driver's license before allowing you to
take a test drive, but they don't need to take your license and hold it as a
kind of deposit. Knowing your identity and address should be enough. Since you
usually parked your car at the dealership yourself, there's a good chance
you'll come back. And of course, it's a good idea to have your license with you
when you take the test drive.
5. Don’t let the car
dealership perform a credit check
If you finance your
new car with a loan, the dealer will eventually have to run a credit check .
But don't agree to one before you're well on your way to making a purchase. A
comprehensive credit check, also called a "hard pull," can negatively
affect your credit score. There's no point in agreeing to a credit check and
risking a drop in your credit score when you're still a long way from making a
purchase.
6. Don’t negotiate
monthly payments
Remember, you're at
the dealer to buy a vehicle, not to squeeze a vehicle payment into your monthly
budget. If you started with a plan that includes the maximum price you'll pay
for the vehicle based on your own payment limits, the monthly payments should
be a byproduct of the negotiation. "Problems arise when the customer is
cornered because he or she wants more vehicle than he or she can reasonably and
legally afford," Fuller said. "To make the deal work, a typical
solution is to dramatically increase the length of the payment plan. Maybe the
customer can afford $500 a month, but at 60 months, that rate is no longer
feasible. So the dealer increases it to 72 or 84 months. That's a really bad
idea for the customer."
How to
negotiate leasing payments
7. You don't have to
buy immediately
For many people,
buying a new car is a stressful affair, so they try to get it over with as
quickly as possible, which can lead to negative results. In their eagerness to
get it over with, they don't carefully consider their options or negotiate
skillfully. (For example, walking away is an excellent negotiating tactic that
you may be hesitant to use if all you care about is getting the deal over
with.) Although dealership personnel will often pressure you to buy now by
using tricks like, "I can only give you that price today," you're
wise to take your time. Today's new car market is hotly contested. There's
absolutely no reason to be pressured by a limited-time offer; chances are, an
equally good or better deal will be available tomorrow.
Heed these warnings,
and your car-buying journey should be far less stressful. And you'll be in a
better financial and maybe even emotional position when the deal closes.
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