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10 tips for car buyers

1. Negotiate everything - negotiate the price of the vehicle but do not stop when you get a good price for the car.  Negotiate the cost of the financing, extended warrantees, gap insurance, credit insurance (which you should not buy anyway).  The one thing you cannot negotiate is the sales tax.  Everything else - bargain hard.  It's your money.

 

2. Don't buy garbage.  The dealer will try to sell you aftermarket stuff like overpriced security systems, window etching, undercoating, it goes on and on.  These are ways for the dealer to make huge profits selling you junk.  Simply say no.  If you want a security system make sure you are getting the best deal or get it somewhere else..  

 

3. 0% financing is not 0% financing.  If you read the small print, which you should always do, check if the dealer keeps any rebates when you go 0% financing.  Depending on the amount of the rebate and the price of the vehicle, zero percent could really be 7%.  You may be better off taking the rebate and financing the car through your credit union.  The difference over five years could be significant.

 

4. Document preparation fees - negotiate these away. They are made up.  Why is it that one dealer charges $200, another $400 in these phony fees?  Does one dealer only produce half the forms of the other?  Or does one dealer pay their document preparer twice as much as the other?  Nonsense.  These are pointless add ons to increase dealer profit while delivering nothing.  Doc prep fees started out at $49 years ago and have skyrocketed when dealers found out people will pay them without a whimper.  If you are a good negotiator you should not have to pay these junk fees. 

 

5. Credit insurance - This is the most overpriced insurance on the market.  If you need insurance contact an insurance agent not a car dealership.  Because this is so overpriced, the dealer pockets most of the premiums you will pay.  There is also a possibility that the dealer will keep the entire premium and never buy the insurance for you.  Chances are slim that you will ever find out.  Leave this dog in the kennel.

 

6. Beware the infamous yo-yo sale.  You have signed all the documents and have driven the car off the lot.  Two weeks later the dealer calls and said the financing fell through but he can arrange a loan at a higher interest rate.  Your choice is to either return the car to the dealer or sign up for a higher rate, i.e. monthly payment.  Are you really going to take back your old car after driving this brand new one for two weeks?  Highly unlikely.  Hello higher monthly payment. 

 

7. Do not give them access to your trade in until you have selected and negotiated a price on a vehicle.  Do not even discuss your trade in.  They will, of course, ask you about it early on.  Do not answer their questions, make them answer yours. 

 

8. Do not give them access to any information about you that they can use to pull a credit report until you have selected a new vehicle and have negotiated the price.  If your driver's license has your social security number on it, as some do, do not give it to a salesman until the new car has been selected and the price negotiated. 

 

9. Understand that the dealer makes money on the financing. A lot of money.  In most cases the dealer will make more profit selling your financing that on the vehicle itself.  This is why you must negotiate the financing amount.  Even if it is zero!!  If you read the small print on the contract you will find a sentence that tells you that the dealer will inflate the finance charge to increase his profit.  Negotiate this profit out.  Or find your own financing and cut the dealer out of the loop.  If you go for the zero financing then negotiate a part or all of the rebate for yourself.  Do not let the dealer take the whole rebate.

 

10. If the dealer tells you that a specific charge is either required by the government or required by the finance company, demand that he put that in writing on the contract.  It could be as simple as a written annotation to the contract initialed by the dealer's representative.     

Consumer Protection Lawyers

Law Office of Arthur L. Weiss, P.C.