How to Avoid Car Dealership Pitfalls Designed to Take Your Money |
Posted: December 24, 2017 |
Car salespeople don’t really have a great reputation. While warranted or not, they are sometimes referred to as scammers. This isn’t literally true of course. Car dealerships don’t break the law in how they sell vehicles. However, you do need to have good negotiating skills and knowledge of the buying process. If you don’t, you may end up paying a whole lot more for your car and feeling ripped off. Below are some tips you can use to not get scammed by car dealerships. Repair Your Credit If you intend to pay for your car with a loan, one thing you should certainly do before you even start car shopping is attempting to repair your credit. While it can take a long time to improve your credit score, putting off a big purchase like a car for several months before you see some improvement is probably good idea if you want to get a good interest rate. You should also look over your credit report for errors and have them fixed immediately. You can get a free credit report every 12 months from each of the three major credit reporting bureaus. Never Pay the Sticker Price If you have ever been to a dealership lot before, you’ve probably seen large stickers with prices printed on them. What you need to know is that most people never pay this price. If you do, you’ve made a horrible mistake. Edmunds explains that the sticker price is actually something called the MSRP, short for manufacturer’s suggested retail price. What you should be paying instead should be closer to the car’s true market value. This is a price that is calculated by examining the market and what the same model actually sold for in your area. You can determine this figure by examining online resources like Edmunds and TrueCar. Insure Your Car Through a Third Party When buying a car, the dealer will offer you a number of services provided by the dealership and affiliated companies. However, more often than not, you’ll find a better deal by purchasing these services from an independent third party. This is certainly the case for car insurance the dealership may offer. This is different from dealership insurance that the dealer purchases. Instead, it is coverage offered through an insurer contracted by the dealership. They both share the profits, and you may end up paying more as a result. In fact, it may be a better idea to purchase car insurance before you even buy the vehicle. That way, you can avoid the temptation of different insurance policies that the salesperson may try to tack onto the purchase price. Obtain an insurance quote from multiple different companies to find the best coverage at the best price. Avoid Dealer Add-Ons You will also be offered something known as dealer add-ons during the buying process. These include things like rust proofing, fabric protection, VIN etching and a lot more. These are designed to increase the price of the vehicle and thus the profit made by the dealership. Truth be told, you don’t really need most or any dealer add-ons. Avoiding them entirely is one good way to ensure that you do save money on your purchase. If you do want specific add-ons, you should also be aware that you can probably purchase them from third parties for a whole lot less. Dealer add-ons also usually include ridiculous markups. Fabric protection, for example, only costs the dealer a few dollars. However, if you choose to purchase fabric protection from the dealer, you may be charged hundreds for it. It’s obviously not worth the price. Overall, the goal of dealerships is to make as much money as possible. If you want to get a fair price, you need to be knowledgeable about all the ways that dealers try to increase the purchase price of vehicles. Only then will you be able to negotiate a fair price.
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