On the plus side, the coffee is usually free.
It may
be a tired cliché, but car showroom deal making has most often been
likened to a game of skill.
And, like many athletes before the big match, some consumers view the carhopping
experience with trepidation and even
stomach churning fear. Every game has its time-honored practices to help
the pros win time and time again.
Here are some tips to arm yourself with before entering a car dealership.
If at all possible, rent the model you want before you commit
Can
you really base your crabbing decision on a 10 minute drive around the block
in a demonstrator?
Especially for people contemplating a move into a new segment, such as
an SUV, a brief drive may not be enough.
Fortunately, auto rental firms today offer all kinds of vehicles. Airport
rental counters will give you the widest selection.
Some smaller firms specialize in nothing but imports (some with clutches,
too).
Driving
a rented SUV up to the cottage may reveal the "Grand" model really isn't
all that spacious, or that it uses far
more gas than you're accustomed to paying for
Use the Internet to research your purchase
The
Internet is a fount of information about models, options and pricing, found
on the manufacturers' sites.
But don't stop there: Lemonaid and other consumer advice sites ( like this
one) will give you a more balanced view of
what's good & what's not.
By becoming familiar with the facts before stepping into a dealership,
the informed consumer is better equipped
to cut a deal without becoming confused or sidetracked.
Ask your friends for their recommendations.
Nearly
every adult has bought a car, so they ought to be able to recommend a reputable
dealer.
For many people, the buying experience rates as important as the actual
automobile they settled for, so there's no shortage
of opinions.
If you
do go to a dealership based on a personal recommendation, mention it to
the sales rep.
Chances are, you'll be treated better because you're telegraphing to the
dealer that you're predisposed to buying your car there.
Get ready to be pampered and, with a bit of luck, fed.
Clip the ads and bring them with you.
We're
living in the golden age of grabbing incentives.
As tired as it sounds, there's never been a better time to buy.
And dealers are hungry for your business.
Take advantage of this competitive spirit by clipping particularly attractive
pricing out of the newspaper and carry the ads
with you to your local dealership.
Ask the dealer to match the price or, if not, to explain why they can't
deliver the same promise.
If the
price looks too good to be true, it probably is, and a competing dealer
will be the first one to tell you why.
Deep discounts are usually applied to unpopular models or stripped fleet
cars.
Sometimes
you get tagged in the service department for "special attention" when it's
the service mangers job to get back
the money they "gave away". Of course, you can buy at one place and service
it elsewhere.
Good
honest independents are your best bet for low cost, fully legal, routine
servicing.
Read
the fine print; some vehicles may be used cars returned by bankrupt firms.
Insist
on a factory fresh model
A former
salesperson and sales manager with 13 seen-it-all years under his belt suggests
a buyer can always negotiate a
better deal on a factory order rather than buying off the dealer's lot.
Here's
why: dealers have to start paying for their inventory the moment the vehicles
are loaded onto the transporter at the factory or,
at best, 10 to 15 days later. And interest accrues on the "floor plan loan"
as
long as the cars languish on the lot.
Typically,
a dealer tries to have a 30- to 45 day inventory on hand, but sometimes
stock can be 60 or
70 days
old, which amounts to plenty of carrying costs. Insist on a factory order
and the dealer has
more
room to negotiate a discount, unfettered by interest charges.
Scrutinize
the administration fee
A common
misconception is that the extra charges listed on the sales contract are
padded to provide dealers with additional revenue.
Good dealers don't mark up the freight and delivery charges. They are pass
through costs, just like the (federal) air conditioning tax.
In other words, the costs are set by the manufacturer and the dealer should
present them unaltered.
The one
exception is the administration fee, an amalgam of smaller charges, such
as the cost of registering the loan documents.
When comparison shopping, note how this fee differs at various dealerships.
In some cases, it may be excessive and you could
push to have it reduced or dropped altogether.
A
cash deal is the worst deal
If you
had $30,000 in cash, which is the better investment: a new car or an RRSP?
After five years, if you chose correctly, you'd likely have a $55,000 nest
egg instead of a $ 10,000 beater.
A car
is just about the worst depreciating asset one can think of (Enron and Bre-X
investors excepted).
Take advantage of the richest incentive packages in the history of humankind
and finance or lease your car purchase,
and put your hard earned cash in a tax sheltered investment vehicle.
Lose
the George Costanza attitude
The new
car showroom is not the profit centre it used to be. The real money is being
made in the service garage out back
and by the used car sales operation. The typical markup on a new Saturn
is $ 2100; $ 4,300 on an Audi.
Or about 10% of the MSRP. And that's before the overhead costs (advertising,
utilities, carrying charges) are deducted.
In other words, believe the sales reps when they say they're barely
making anything on the deal (they personally earn an average $300 commission
on a transaction).
Accept
the notion that the dealer deserves to make $1,200 on your vehicle purchase,
instead of trying to shout down the rep
at every line item on the sales contract, and you'd be surprised how much
more candid and accommodating your salesperson can be.
One of the first rules of any game is showing your opponent the respect he or she deserves.