Not so Good Advice on How to Buy a Car
Robert Menard
Certified Purchasing Professional,
Certified Professional Purchasing Consultant, Certified Green Purchasing Professional, Certified Professional Purchasing Manager
Not every advice column in newspapers have good advice. Such was the case in a recent story taken from a blogger at GoBankingRates.com. It cited 3 things to never say at a car dealership (sic, the infinitive was split in the title), only one of which was valid.
When you buy a car, you are negotiating. As such, preparation is your most important obligation. You should never set foot on a dealership unless you have studied the market, models, and prices via the plethora of online resources.
A flawed suggestion
The story says that “price discrimination” is perfectly legal technique. This is odd because the Robinson-Patman law specifically outlaws discriminatory pricing. The larger point trying to be made, albeit clumsily, is that this is a game of poker so keep your poker face; do not let your enthusiasm betray your wallet.
Instead, recognize the reality of what you are doing, buying transportation via a depreciating asset. Let that by your attitude rather than taking the trite, obvious, and transparent tactic of finding things wrong with the car and offering to pay 10% less than what you actually expect to pay.
This is a fool’s errand. You buy a car every few years; the salesman sells cars for a living, often closing several deals a week. He is the pro, you are an amateur ingénue on his turf.
The story is correct about doing price research. Even so, different dealers are willing to offer a vehicle with identical equipment for substantially different prices. Sometimes, it is the identical vehicle as they trade inventory to make a sale. There are back end deals, manufacturer bonus offers to dealers, and so much more that you just do not know.
Once you know the car you want, look for it online, obtain pricing information from a variety of sources and solicit online offers from dealers.
Two points were good advice
The story speaks of monthly payment buyers. I agree, never say how much you want to spend either in lump sum total or monthly amounts. This opens you to all kinds of games and manipulation. It is also far better to obtain financing ahead of time from a financial institution rather than endure the Finance and Insurance or the so called, “Business Manager” at the dealership.
Lastly, recognize that extended warranties are largely a waste of money.
Happy car buying experience.