Unfortunately, car salespeople don’t have the best reputation. They’re often stereotyped as pushy and crooked.
While this is generally a misconception, it’s still a good idea to remain skeptical when making a large purchase, and to make sure you’re not getting taken advantage of.
If you’re looking to purchase a car through a dealership, here are some tips on how you can ensure you are getting the best deal.
1) The internet and smart phone are your best friends
Show up to the dealership as prepared as possible. Why? Because a knowledgeable consumer is a less gullible consumer. Prior to visiting any lots, contact several dealers asking for a quote. You can even mention that you're shopping around with the competition. Chances are that dealers will try to give you a better deal just to beat the competition's quotes. Essentially, you're creating a bidding war for your business before you even step foot on a lot.
Bring the cheapest quotes with you to the lot for extra leverage in negotiations. Find the original invoice price of the car and how it compares to the sticker price. Search online to see reviews of the car and what others have paid for it in the past.
Once you’re in negotiations, don’t hesitate to pull out your smart phone in front of the salesperson to double check the figures.
2) Take your time and carefully read over your contract
It’s incredibly important to read your contract before signing. Double check the math to ensure it checks out. Sometimes, your monthly rate doesn't add up to the total price that you had agreed upon. Make sure that you understand and agree to every word in your contract before signing anything. There may be expensive and unnecessary add-ons that weren’t mentioned or were glossed over (see #3).
Many salespeople, regardless of the industry, want to close a deal as quickly as possible. Take your time and ask questions. Don’t let yourself feel rushed into making any decisions. You are in charge of this negotiation. If you have a trade-in, keep your keys until the deal is done.
3) Car insurance, add-ons, and extended warranties
Most of the time, any add-ons such as rims, pin striping, spoilers, tinted windows, alarms, and stereo systems are marked up by the dealership. With a little research, you can find more affordable options elsewhere.
You’ll also need to consider the cost of car insurance for your new vehicle. A monthly payment is one thing, but shop around and compare car insurance quotes so you have an idea of what you’ll pay for insurance for this particular vehicle. Add that to your monthly car payment amount and you’ll have a clearer picture of your total monthly vehicle costs.
4) Ask more questions than you answer
Car dealers will try to ask you as many questions as possible to gauge exactly what you can afford. Good dealers will use this information to help you find an appropriate car and plan. However, this information can also be used to gauge what unnecessary extras and add-ons you can afford. Car dealerships can get exclusive factory-to-dealer incentives, customer rebates, and other discounts. So they could have more wiggle room in their negotiations than they’re letting on.
One common sales tactic is to focus on monthly payments rather than the overall price of the vehicle. This is an effective way to make your payments seem lower but in reality, you could be paying more than you think. Before signing on the dotted line, you should know both the total price of your car and your monthly payments.
5) Getting the best deal on used cars
When purchasing a used car, it’s even more important to do your research and ask as many questions as possible. When you’re trading in a car, the dealer will ask you a lot of questions to determine the worth of your vehicle. If buying a used car from a dealer, some questions you should ask include:
- How many people have owned the car?
- Has the vehicle been in any accidents?
- Has there been any minor or major repairs to the car and were they done by a licensed mechanic?
- What is the overall condition of the car?
- How fuel efficient is the car?
- How many kilometres are on the odometer?
- Are there service records available?
These are all questions that will ensure you’re getting a good price on a durable vehicle. If you’re looking into trading in your car or buying a used car, check out the value of the car on Canadian Black Book. This site (along with additional research) will give you a good idea of the car's worth so you can negotiate the best deal possible from the dealer.
Anyone looking to purchase a car should do their homework beforehand and not sign anything without taking the time to consider every aspect of the deal.
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