If you’re thinking of buying a new car, you should be aware that a salesperson isn’t going to tell you everything.
A Salesperson Will Not Tell You the Best Way to Buy a Car
A salesperson wants to sell you a car. The salesperson is not there to tell you whether or not you can afford the payments. If you really want to know if a new car is within your budget, see an expert. That could be a financial planner, a bank loan officer, or even a friend who knows a lot about how to manage money.
You Need a Checklist
If you’re buying a car, you need to decide what you have to have, what you can live without, and how much you’re willing to pay for things that you might want but don’t really need. A dealer will try to sell you add-ons and extended warranties, which you might not need at all.
When you make your checklist, do it at home where you can be calm, rational and sensible. Don’t do it at the dealership, where a salesperson is trying to convince you of the benefits of the additional features.
Know When to Bail
Don’t let yourself be pressured by the salesperson. If they suggest that you talk to the dealership’s financial manager, leave.
This might sound odd, as a car is a huge purchase that you might not be able to afford it otherwise.
Here’s the problem with financing. Your salesperson is never going to ask you what you want to pay for a vehicle. Instead, you are going to be asked what monthly payments you are looking for.
This is a strategy used to convince you to buy extra features by adding small amounts to your monthly payments. In the end, you may be paying a lot more for your car in total than you had planned for.
However, you can actually get a new car without having to finance. There are all kinds of new vehicles available at auction. You don’t have to be a dealer to buy. You can work with a third party bidder – a proxy company that will bid on a new vehicle for you, using their dealer license. They’ll charge you a small fee, but with the money you’ll save on the purchase of your new vehicle, you’ll still save money.
Never Pay Dealer Invoice
The “dealer invoice price” is nothing more than a way for the dealer to start negotiating. Anything above the supposed “dealer invoice price” is profit for the dealer. If you’re going to buy from a dealer (and we still think you’ll do better with an online auction), you should tell the dealer straight up that you know this is meaningless, and move on from there.
You Will Never Get a Great Deal on a Popular Car
The usual rule of thumb here is that the more popular the car the less likely you’ll get a good deal. It’s supply and demand, pure and simple.
That said, if you are lucky enough to find a repo vehicle at an online auction, you might get a good deal. You can also avoid financing pitfalls by buying a car at auction.
There are companies that will bid for you under their dealer license. All you have to do is allow them to handle your funds and bid on your behalf. You could get a really good deal on a new or nearly-new car.