Car Buying 101
7/14/05, 10:02 AM
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We seem to be getting a LOT of questions on different threads about buyin a car and a lot of times they are the same questions over and over.
This is the 1st in a series of Car Buying topics and definitions. I will post additional topics as I can get them written. Whether you are a 1st time buyer or a seasoned veteran I hope you will get something out of these topics. Any comments can be posted in the Ask A Salesperson thread.
Car Buying 101
We seem to get the same questions over and over again so I decided to write this thread to hopefully address a lot of the questions and requests that are posted on a daily basis.
Car / truck buying can be one of the more stressful things that a lot of people go through on a daily basis. The biggest complaints I hear from consumers all the time is that they absolutely hate the game playing by salespersons and the lack of product knowledge by salespersons.
Before even setting foot into a dealership, do your research. All of the manufacturers have websites that you can obtain information on the vehicle you wish to purchase. You can even spec out a vehicle on line and print it off. At http://www.fordvehicles.com you can price out a vehicle and get both MSRP and dealer invoice. The only flaw is that the invoice price does NOT include regional advertising assessments that appear on every vehicle and varies by region and type of vehicle. Just because you have the invoice or a close estimate of invoice does not mean that a dealer will sell the vehicle for that and usually the negotiation process at a dealership starts at MSRP and works downward. What you want to do, armed with the invoice price is work from invoice plus whatever profit over invoice that you feel is reasonable. For a “hot” hard to get vehicle like what is currently going on with the Mustang, the negotiation process will be at MSRP or so. For a high volume seller you should be able to agree on a price around invoice. Up until the final price is negotiated upon, keep any trade-in talk out of it otherwise any advantage you had will be eroded. Once you agree on a final selling price, then you can bring up the trade in.
Regarding the trade in vehicle, several things that you should do prior to setting foot into the dealership are as follows:
1. If you have a loan on the trade, call and get a current payoff good for at least
10 days.
2. Have your vehicle cleaned and all the clutter and garbage cleaned out. If you can take it to one of those full service car washes and get “the works” done to it including a buff and wax if needed. A nice, clean, well taken care of car will bring more money. This also includes degreasing the engine if needed.
3. Make sure the oil has been recently changed and all fluids are topped off as some appraisers are very thorough. A vehicle that appears to have been taken care of will bring more money.
4. Go to http://www.kbb.com [Kelly Blue Book] to research your trade in vehicles value. The two biggest items that affect value are miles and condition. If you have a high mileage vehicle, do not expect anywhere near book value for it as its marketability is affected quite a bit. Remember, dealers do not set used car values, the buying public does. A dealer can only sell a vehicle for what the market will bear. Physical and mechanical condition also affects the value considerably. For older vehicles especially with high miles or minor body and mechanical problems, most dealers will either “wholesale” the vehicle to a used car dealer or run it to an auction so he will value it as to what he thinks it will bring at the sale.
Now that you have gotten a good price on the new vehicle you are buying and top dollar for your trade, do not let your guard down. Again most dealers are in the business to make money and they have a very high monthly overhead to pay so they will attempt to make a profit wherever they can. Aftermarket sales are a big area where dealers also make money which is acceptable just so they are competitive on the pricing of the products they are selling. These prices are usually negotiable.
Financing: Unless you are in the position to write out a check, the dealer will be more than willing to assist you with financing the vehicle. Again before you ever step into the dealership, do your homework. If you know your credit score all the better. The better your credit score, the better the rate you will receive. Talk to your bank or credit union and find out rates and terms. You might even want to become pre-qualified. If the manufacturer of the vehicle you are purchasing offers a low financing rate as an alternative to any rebates, compare the payments both ways especially if you are not financing a lot. It may surprise you that the payment at the standard interest rate with the rebate deducted may be lower than the payment at the low rate but no rebate. If you allow the dealer to handle financing [and there is nothing wrong with this], make sure they are offering a competitive rate to which you have already researched. A lot of times the dealer is already set up to write the loan through your bank or credit union. By doing your homework and knowing your credit score you are better equipped to walk out of the dealership knowing you did all you could to have a good purchase experience.
Extended Warranties: Many people choose to add an extended warranty to their purchase. I am not going to debate the pros and cons of whether a person should or shouldn’t but what I am going to do is lay out the facts pertaining to Ford ESP and let you decide. Most new vehicles come with a 36 month / 36,000 mile bumper to bumper warranty which excludes most maintenance and wear items. Ford offers coverage for up to 7 years [4 additional years] or a total of 100,000 miles. The coverage ranges from powertrain only to premium care which covers most items. Usually when you are in the business office [or finance office as some places call it], the manager will talk to you about a warranty. The only warranty I would ever purchase on a Ford vehicle is the Ford ESP. I have heard horror stories on some aftermarket warranties. If you drive average miles and trade every 3 years then don’t buy one. If you drive a lot of miles or are leasing with a lot of miles then by all means put a warranty on it to alleviate the headaches. Ford usually has some type of bonus program or trip for selling warranties so you can negotiate on them just like you can the vehicle. I have had vehicles with them and without them. On the ones I purchased the warranty I got more than my money back in repairs. The nice thing about buying it when you get the vehicle is you can include it in your financing plus you then have the ESP rental reimbursement from day one as some dealers do not give out loaners especially if you did not buy the vehicle from them. At least this way you get rental car coverage.
To Be Continued
This is the 1st in a series of Car Buying topics and definitions. I will post additional topics as I can get them written. Whether you are a 1st time buyer or a seasoned veteran I hope you will get something out of these topics. Any comments can be posted in the Ask A Salesperson thread.
Car Buying 101
We seem to get the same questions over and over again so I decided to write this thread to hopefully address a lot of the questions and requests that are posted on a daily basis.
Car / truck buying can be one of the more stressful things that a lot of people go through on a daily basis. The biggest complaints I hear from consumers all the time is that they absolutely hate the game playing by salespersons and the lack of product knowledge by salespersons.
Before even setting foot into a dealership, do your research. All of the manufacturers have websites that you can obtain information on the vehicle you wish to purchase. You can even spec out a vehicle on line and print it off. At http://www.fordvehicles.com you can price out a vehicle and get both MSRP and dealer invoice. The only flaw is that the invoice price does NOT include regional advertising assessments that appear on every vehicle and varies by region and type of vehicle. Just because you have the invoice or a close estimate of invoice does not mean that a dealer will sell the vehicle for that and usually the negotiation process at a dealership starts at MSRP and works downward. What you want to do, armed with the invoice price is work from invoice plus whatever profit over invoice that you feel is reasonable. For a “hot” hard to get vehicle like what is currently going on with the Mustang, the negotiation process will be at MSRP or so. For a high volume seller you should be able to agree on a price around invoice. Up until the final price is negotiated upon, keep any trade-in talk out of it otherwise any advantage you had will be eroded. Once you agree on a final selling price, then you can bring up the trade in.
Regarding the trade in vehicle, several things that you should do prior to setting foot into the dealership are as follows:
1. If you have a loan on the trade, call and get a current payoff good for at least
10 days.
2. Have your vehicle cleaned and all the clutter and garbage cleaned out. If you can take it to one of those full service car washes and get “the works” done to it including a buff and wax if needed. A nice, clean, well taken care of car will bring more money. This also includes degreasing the engine if needed.
3. Make sure the oil has been recently changed and all fluids are topped off as some appraisers are very thorough. A vehicle that appears to have been taken care of will bring more money.
4. Go to http://www.kbb.com [Kelly Blue Book] to research your trade in vehicles value. The two biggest items that affect value are miles and condition. If you have a high mileage vehicle, do not expect anywhere near book value for it as its marketability is affected quite a bit. Remember, dealers do not set used car values, the buying public does. A dealer can only sell a vehicle for what the market will bear. Physical and mechanical condition also affects the value considerably. For older vehicles especially with high miles or minor body and mechanical problems, most dealers will either “wholesale” the vehicle to a used car dealer or run it to an auction so he will value it as to what he thinks it will bring at the sale.
Now that you have gotten a good price on the new vehicle you are buying and top dollar for your trade, do not let your guard down. Again most dealers are in the business to make money and they have a very high monthly overhead to pay so they will attempt to make a profit wherever they can. Aftermarket sales are a big area where dealers also make money which is acceptable just so they are competitive on the pricing of the products they are selling. These prices are usually negotiable.
Financing: Unless you are in the position to write out a check, the dealer will be more than willing to assist you with financing the vehicle. Again before you ever step into the dealership, do your homework. If you know your credit score all the better. The better your credit score, the better the rate you will receive. Talk to your bank or credit union and find out rates and terms. You might even want to become pre-qualified. If the manufacturer of the vehicle you are purchasing offers a low financing rate as an alternative to any rebates, compare the payments both ways especially if you are not financing a lot. It may surprise you that the payment at the standard interest rate with the rebate deducted may be lower than the payment at the low rate but no rebate. If you allow the dealer to handle financing [and there is nothing wrong with this], make sure they are offering a competitive rate to which you have already researched. A lot of times the dealer is already set up to write the loan through your bank or credit union. By doing your homework and knowing your credit score you are better equipped to walk out of the dealership knowing you did all you could to have a good purchase experience.
Extended Warranties: Many people choose to add an extended warranty to their purchase. I am not going to debate the pros and cons of whether a person should or shouldn’t but what I am going to do is lay out the facts pertaining to Ford ESP and let you decide. Most new vehicles come with a 36 month / 36,000 mile bumper to bumper warranty which excludes most maintenance and wear items. Ford offers coverage for up to 7 years [4 additional years] or a total of 100,000 miles. The coverage ranges from powertrain only to premium care which covers most items. Usually when you are in the business office [or finance office as some places call it], the manager will talk to you about a warranty. The only warranty I would ever purchase on a Ford vehicle is the Ford ESP. I have heard horror stories on some aftermarket warranties. If you drive average miles and trade every 3 years then don’t buy one. If you drive a lot of miles or are leasing with a lot of miles then by all means put a warranty on it to alleviate the headaches. Ford usually has some type of bonus program or trip for selling warranties so you can negotiate on them just like you can the vehicle. I have had vehicles with them and without them. On the ones I purchased the warranty I got more than my money back in repairs. The nice thing about buying it when you get the vehicle is you can include it in your financing plus you then have the ESP rental reimbursement from day one as some dealers do not give out loaners especially if you did not buy the vehicle from them. At least this way you get rental car coverage.
To Be Continued
7/14/05, 11:10 AM
#2
Thanks Ed, look forward to more. Btw, closed this per request so that the thread wont fill up with comments. If you have a question regarding anything in this, please create a seperate thread.
Thanks
Scott
Thanks
Scott
8/26/23, 04:38 PM
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