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Car Buying 101: Volume 5

This is the fifth article in the series of the "How to" of car buying.

Youíre at the dealer and you have written down what youíre willing to pay for the car. The salesman reluctantly takes your written offer to the closures office. Usually the salesmen will say something like, "they're going to kill me when I bring them this offer." I usually respond with "donít worry, if they do, I can find another salesman!"

The next ting that happens is the salesmen comes back with his sales manager; the manager is there to show you the light!

The sales manager will now try and explain how ridiculous your offer is. I always laugh and throw the same numbers back at him. If the sales manager canít persuade you to think his way, he will either try to sell you a different car or hand you back your keys and send you on your way. Iím always ready to walk away, and you should be too.

They will let you start to leave, but before you get to your car they will come back and try to renegotiate the deal again.

If you want the car and your numbers are fair? Then go ahead and try and continue to deal with them.

Remember they will only deal with you the second time if you are a serious, qualified buyer. If you are serious and qualified they will work with you until they either close the deal or you leave.

If you decide to renegotiate, then sit back down and use the same numbers you gave them in your last offer. If they start to complain then have them justify their numbers. They wonít! They will however try to make you justify yours! Then they will make another offer that will be lower than their first offer, and closer to your numbers!

Their second offer will be lower than there first, just give them the same numbers that you gave them the first time. Do you think you're getting close to the deal? That means the game has switched to your side, and you are now in control. Hereís where you can get those little extras. If the numbers are close, the salesmen will ask, "How can we earn your business?" Try adding either a CD player or an alarm with your offer. If they ask just tell them that you really want this car but youíve got to have a CD player or whatever the car is missing (Alarm, GPS system, TV, etc.). Remember if you add something you will have to increase your offer to cover the cost. But the dealer will work with you to make the deal happen!

Remember: The dealer doesnít give anything away! They have to pay for those aftermarket items. And they will charge you a premium for those items. (Only add these items of you are very close to a deal and you really want those extras). The aftermarket items are big profit for the dealers, but in some cases they are deal closers. If thereís enough profit in the car they will though those items in just to close a deal.

The dealer will go back and forth about three times before they stop dealing! Iíve had the dealer come back with an offer that stated, ďOK you win!!!Ē in bold green letters, even though they were still way off from my offer. I crossed it off and wrote my offer again. They finally accepted it! Even though the dealer accepted my offer the deal wasnít done yet! You still have to go to the finance office.

If the dealer accepts your offer the next step is the finance office. You will then have to wait some more. Then the salesmen will ask you to follow him to the finance office.

Now the next phase of the car buying process begins. The finance officer will try and sell you the following items

  • A variety of loan packages
  • Extended Warranties
  • Paint care
  • Alarm Systems
  • Etc.

If youíve done your homework you already have a loan from you bank or credit union! They will have you sign a loan agreement and give you 10 days to get a loan, if you havenít already got one. Remember: cash deals are not the best deals. Dealers make profit off the loan packages. They really donít want cash!

Pick the finance option that fits your needs, and remember to check the numbers when you get your loan statements from the bank. I have found discrepancies in the loan interests rates. Remember: nobody cares about your wallet more than you!

My suggestion is forget about purchasing the warranties or the other items the dealer offers you. You can always go and buy them later! (Did you know that the extended Warranty is a negotiable item? Yes itís true you can negotiate the price of the warranty!)

There are a few types of warranties: Hereís where you need to be careful! The first extended warranty is offered by the manufacturer (In my opinion this is the best warranty). All participating dealers in the USA will honor the Manufacturer's Extended Warranty with little or no out of pocket expense. You can purchase this warranty later on, as long as you have some of the original warranty left. (Check with the dealer on the exact terms)

The next type of warranty is an aftermarket insurance company extended warranty. These are different. You usually pay for the work in advance and then get reimbursed at a later date. The dealer is usually involved in the insurance program in some way or another.

You will need to make a decision about which warranty you may want. Be sure to understand differences before buying. There are many differences besides price. Be sure to read the small print before you make your decision.

The protective paint coating is an option I personally donít buy, but itís your choice. (most car detailers offer the same protection at a much cheaper price)

You can get any or all of these aftermarket items at a later date, at a much cheaper price if you shop around.

Now that you have read through my car buying techniques, I hope you learned something! This is just a taste of what can happen and how to handle car buying. I hope you enjoyed my techniques of car buying and will use some of what you have read, the next time you need to buy a car, and save yourself some money on your next purchase!

This page was last updated on 05/28/01 by Redshift

                           

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