Car Buying Tips From an Ex-Salesman part 3

First I would like to apologize for not posting this Friday. I was at my parents, and could not find the time.

Tonight I am going to give you a step by step process to get a great deal on a specifically a NEW car. With that said some of this will be repeated from previous posts. But since I don't have a huge following yet it will probably be more beneficial this way.

The STEPS to get a great deal on a NEW car.

1. Internet research. You need to research cars that you are interested in. Go to manufacturers websites(http://www.ford.com/ or http://www.dodge.com/, etc.) to do so. Find 1 you are interested in. While there make notes of pricing and features. Be aware that dealerships do not always carry the exact car you look at so pricing may be off a little. Also dealers can trade cars with other dealers to get the exact one you want, however if this is done dealers lose markup and will not give you as much of a deal. Now, you know the car you want, the features you want and the pricing on the specific vehicle. Also make sure and note what kind of rebates are available and Bonus Cash. Your thinking the dealer has that info. Well they do but they do not have to disclose Bonus cash to you. Most dealers do but some will no mention it and keep it for profit. Now what?
2. Call the a local dealership and ask to speak to the New Car Sales Manager. If he is not available either tell them you will call back or ask him to call you. This is an important step. Once you get him on the phone tell him that you are interested in setting up an appointment to test drive a vehicle. He will most likely hand you to a salesman to set up a time(only set up a time when you are 100% ready to buy and tell the Sales manager that too) but the point of this is to let him know you are ready to buy. This makes him aware of you, pay special attention to you and he will think you have already been sold on the product. So when you come in, negotiate price and act tough with the salesman. He will assume they did something wrong. And try fixing it with bigger discounts. Now if you drive the car and don't like it, leave. Do not look at other stuff. No research means no control (you lose power when you let a salesman sale you something. If you want you can research several vehicles before you go to the dealership in the event you dislike the ride or something else. Just make it clear you are there to see a few vehicles. Now what?
3. So you just drove the car and you love it. You want to buy it. Tell the salesman you want to see what kind of price they can do. They will sit you down and fill out some paperwork. They will ask to run your credit, allow them at this point. Again you are letting them know that you are ready to buy by doing this. When the numbers come back he will go over them with you. Most likely you will see a discount, rebates and bonus cash, depending on availability. Lets say he put a rebate on there but no discount or bonus cash. Immediately following the presentation of numbers ask, wheres the discount? He may respond by pointing out the rebate or he may say at this time he cant do any better. If its the first say the rebate comes from the manufacturer what are you going to do for me. If its the second say well I'm sorry I wasted your time (start to stand) and tell him that you will have to wait. This will scare him because remember his boss gave him you and thinks this will be an easy sale. So he will respond to both of these by saying let me check with my manager and see what we can do. He may try to negotiate price with you him self, tell him to get a discount approved and you will go from there. Now He will leave for a few come back and make another offer. At this point if its not where you want it. Ask him for the price you want. Keeping in mind base model markup is around $900 middle of the road markup is $1500, and loaded markup is 3000. These are round numbers could be more or less. He will say ok or go and check with a manager. They may or may not accept your offer. If you don't you can try and leave and see if they change their mind. But this is very hard to do. Lets say they accept your offer. Now if their was bonus cash shown online mention that to them. Ask when they show the Bonus cash in the numbers? That's how you get the price you want. Now what?
4. Tell them your ready to see interest rates. It will take around 30 minutes most times to do this if they are busy you could be their awhile. When they are ready either the finance manager will come to you or the you will go to him. He will be the nicest and the best salesman they have. Why, because he sales you stuff you don't need with incredible markup. Warranty- I always buy warranty. Normally they will show you a price of $2400 dollars for it with a 600 dollar discount. Problem is they only pay around $1000 for it. Mention it seems a lot higher than you remember, ask for the discount. Gap- I also always buy gap. Normally gap sales for $600 dollars. There is not a lot of markup but you should be able to get $150 off, just by asking. Most pay $300 for it. Life- I never buy it. Its just expensive really expensive insurance. Turn the offer down every time. You don't want this. A&H- Another really expensive insurance. Turn it down. You don't want this either. If that negotiating went well you will move on to the note and interest. If you got all the discounts I have spoke about they will try and bump the interest. They have to make money some how. Consider rates on your credit card, they should be higher than your car rate. However rates do go up and down through out the year. An easy way to check rates is to apply for an auto lone online. This will give you an idea of rate. If its a little higher mention that you were offered a lower rate online and tell them the lender. Some times the finance manager will not send your credit to all lenders and may not have tried it yet and most will give it a try. If its lower take it. Now what?
5. SIGN THE PAPERWORK and drive it home. Then?
6. Come back to my blog and tell me about your experience.

I Hope this helps you all. If you have any questions post them in the comments. Thanks for Reading.

-RIGHTTTT

Just Do It!

CAR BUYING TIPS FROM AN EX-SALESMAN part 2

Tonight rather than talk about procedure in purchasing a car, I am going to talk about things you should never do while purchasing a car.

1. Never buy A&H or life. A&H and life are basically insurance. When you go into the finance office, the finance manager (a.k.a best salesman) will generally offer you 4 products. Life, A&H, gap, and warranty. I suggest always buying gap and warranty. Now A&H protects your credit. If you were to fall ill or injure yourself. A&H would pay your monthly note for 3 to 6 months. While this prevents repossession it just cost to much, thousands of dollars. They will show you a small increase in payment and say something like this. What if you get cancer? The finance managers are the toughest to deal with in the car business. After asking you a what if with a possibly deadly end. They will mention Life. Now this is also an insurance, which protects your family. If you were to die the day after you bought the car, the insurance would pay the car off completely. While this sounds good it also can be very expensive. So what does the cost matter for peace of mind. How about this. Lets say a couple walk in the finance managers office. They are relieved they know its about over. However this is where most people get screwed in the car business. The finance manager will be very pleasant. The couple has picked out a Minivan(so all there cute kids could fit). At this point the couple think they are going to pay $425 a month for 60 months (a base model or maybe a used one for that price). They are presented numbers at this point, and they both notice the note is $505 for 72 months for a $20000 van(too high unless you have credit problems). So they say no. But the finance manager wont let them leave till they hear his proposal. So 30 minutes later. The couple leave exhausted, but relieved and excited about their new van. What happened in the finance office? They were sold. Sold Life, A&H, gap and warranty. Now they are paying 80 dollars more a month and for a year longer than they expected. What does this mean for their future. They will not be able to trade this vehicle in until its payed off at which point the van will be worth maybe $1000. Why? The stuff they were sold in the finance office costs around $6000. Which means they are $8000 up side down when they pull off the lot. So take my advice and don't buy Life and A&H. There is only one exception, you are already extremely sick and could possibly die.
2. Super Sale! Have you ever gotten one of those fliers in the mail that says You Won! come to blank blank dealership to collect the prize. Throw it away. Or go with this knowledge in mind. These fliers will offer a check for $4000 off or at least $3600 for your trade. They will have cars for 500 dollars and cars with low monthly notes of $199 a month. Last but not least they will guarantee you financing bad credit, no credit etc. The first thing you need to know about these sales is that the salesman working are not from the area well not all of them, the regular staff will be there but the Super Sale team will be running the show. These salesmen are the best in the business. They get a week to make enough to cover hotel, food, plane, and regular monthly expenses. They are good. 2nd They don't care what they have to promise because they will be not be there next week. 3rd These sales are for used cars, claiming to be a liquidation event. Not true. 4th While you think the cars are marked down they are actually marked up at minimum $6000 over cost. My first sell in a super sale I made 2300 dollars on one car. 5th The big prize you think you won is a 5 dollar Wal-Mart gift card and to get it you will have to register at which point they will run your credit. Now there is a big prize and you can win it but no one ever does. Why? Because the team sends out around 60,000 fliers, the odds of that winner walking in the door are extremely low. 6th When you they show you the numbers and take the $4000 off they will first mark the price up again $4000 dollars so they don't lose money. Basically if you buy a car without negotiating at one of these events you will pay at minimum 6k over cost and don't feel safe looking at a new car. These salesmen can even get you on them. So I will leave you with this: If you have all day, enjoy playing the car game, don't have a problem saying no, feel you understand the car business and the salesmen, and know you can walk out at any time. Go to all the super sales you want, and collect the gift cards. Maybe you will get lucky and win the prize.
3. Never mention down payment until you are in the finance office. Pretend you forgot you had it. If you mention it before you agree on numbers they can make it disappear in the numbers by bumping the cost, making up charges, and bumping interest rate.
4. Never mention a trade/how much you want for it till you see a price on the car you want. Why? They can show you as much as you want for your trade by simply subtracting price from the car you want. For example lets say you want $2000 for your paid for Neon. You want to buy a Stratus for $10000. Now the Neon is only worth $1000 and the Stratus is only worth $6000. So they say they will give you 2000, for the Neon. They just lost $1000. To supplement this loss they will say with a discount $567 on the Stratus, and 2000, for your trade, you are out the door at $7433. Looks good. doesn't it. What you don't realize is that they actually gave you $1000 fro your car and a $1567 discount. Still sound good? Well if it does, your wrong. Your 1st goal is to get the discount. As much as you can. From part 1 of this series you should know that used cars are on average marked up $4000. Which means with the $1500 you got off they still made close to $2500. So first get a discount of at least $2000 dollars. 2nd mention your trade. You will always want more than what they offer. So if you get the 2k off and they show you another thousand in your trade you end up getting 3000 off rather than 1500. Its kinda complicated, I hope I explained it well enough

Things to remeber.

1. Don't buy A&H or life unless you are sick.
2. The finance manager is where the struggle begins.
3. Super sales are bad news.
4. Never mention a trade until you get the price you want.
5. Never mention what you want for your car till you get the price you want
6. Never mention down payment until you get ready to sign the papers.
7. Super Salesmen are really that, Super slalesmen, without the knowledge you will be taken advantage of.

Anyway that concludes part 2. Feel free to ask Questions. Remember there are no dumb questions in the car business.

-RIGHTTTT

 Just Do It!

CAR BUYING TIPS FROM AN EX-SALESMAN part 1

I sold cars for 5 months, made 25,000.00 dollars (which was very far from the top) and learned a whole lot. Since I will never do it again I have decided to give away my knowledge on the subject.

1st I would like to acknowledge that 5 months is not long but I will teach you what I know. I have helped my mom get an interest rate 5 points below what she was initially offered, she got gap and warranty for less than was initially offered, and she bought the car for less than invoice (which is almost unheard of). Oh and it was a Honda one of the highest rated cars out there.

2nd I cannot teach everything I know in one post. So this will be a series. However if you have questions before I mention something please just comment to the topic and I will respond A.S.A.P.

3rd It may be possible to help you specifically via email. No charge of course. Just because I like to mess with car salesmen...

Now, the first thing you need to know is that you don't know more than the car salesman. Thinking you do only complicates matters and causes problems in the long run. I have had many people not play ball and end up not getting the car. You must realize that your on their turf and nothing can change that.
The second thing you need to know is that buying a car is a game. Have fun with it but don't let the salesman know you know it is a game. The salesman must think he's in control at all times. 3rd Everything is negotiable, car price, warranty, gap, A and H, and yes interest rate is negotiable also. Now before everybody gets excited about the interest rate and starts turning down offers, there is a specific way to do this any other way will most likely cause you to leave with out a car. With that said I will now talk about how you go about picking a car.

NEW CARS
Do not I repeat do not go to the car lot until you are ready to buy a car, a specific car. Now there is an exception. Some people need to test drive the car first to see if they like it. This is the only acceptable exception. Make it clear that you are only here to drive and demo the car. Most salesman will respond well to this but do not get frustrated if the he/she attempts to sale it to you that day, it's his/her job. I suggest Internet research or maybe just cruising the lot at night to pick something out. Now if you are someone that must drive the car first and want to look at several at different lots then do so. But keep what I said in mind. Also do not tell the salesman that you want to look around at other lots. This will release the super salesman that you want to avoid. Why does the salesman become so aggressive when you tell them this? Because statistics show that people searching lots buy at the 3rd dealership they visit. So they will do anything you want to get you to buy today. Now this seems like a good position for you but its not. As soon as you say show me what you have to offer, they know they have you. So tell them that you just haven't decided if you are ready to buy yet. This shows them that you can leave even when offered the world. Most will attempt to change your mind but remember its their job, you may even have to meet with a manager or even another salesman but I stress remember that's there job.

New car mark up from my experience
base models- 900-1500
middle of the road- 900-2000
top of the line- 2000-3500
Keep in mind that I have seen some with lower mark up like 500 dollars and that not all new cars are marked up this way.

USED CARS
This is a whole new ball game. Used car salesman are the best, they make the most money, and they can be a bit abrasive. Do not be offended by them because by the end of the day they will lose. Why, because you have me... First when looking for a used car decide what you want, whether it be a specific make, a cheap car, or a demo/program. Now if its a specific make then look around online at either cars.com or autotrader. Check prices, mileage, and features. Find the one you want. Then find as many others as you can that are similar in mileage and features. Once you have done this. Compare prices seeing where yours falls, in the upper range or lower range. If it falls in the upper range then you know that other dealers can sale the same car cheaper, so the one you want can be sold cheaper also. If it is in the lower range then it might be a good deal already. Now that you know what they are selling for, make some mental notes or just print them out and take them when you go to the dealership of your choice. Only take them if your car is in the upper range. Now the cheap car, your looking for a basic car with simple amenities, no real preference just not a junker. 1st I suggest if your credit is good enough to finance at a big dealership, go there. Used car lots are not reputable or trustworthy plus most do not have a service department. Again I suggest cars.com and autotrader. Search for your price range, check millage and features. Pick a few cars, then check them out at night. Find the one you want. Call and make an appointment with the used car manager, to demo the car. This is really important, it will show that you are truly interested and he will not be super aggressive with you. If you like how it drives. Start negotiations. Oh and always get a CARFAX REPORT on used cars. The dealer will do it for you for free, if your willing to buy it. This will show wrecks, water damage, fire damage etc...Now to the Demo/Program care. First I will define these too you. Demo, a car that has been used by management only and never titled. This is very Rare, the car will be in exceptional condition and well maintained. Prices will be close to new. Program, this means the car was sold to a company for example Ford May buy cars for there upper level employee's. Also car rental companies will buy cars like this in bulk and then some where between 15-49000 miles they are sold at auction to car lots. These cars will look like used cars and they will be fairly well maintained. However a carfax is strongly recommend especially if it was a rental car. Most used car lots at major dealers have both of these types of cars. Demo's like I said are hard to come by and even harder to negotiate price. Why? because the dealer took the car off the lot and let someone drive it regularly. By doing that he took a loss. Normally you will be able to get it for invoice, sometimes its a good deal sometimes its not. You have to consider millage in this. To find one I suggest calling around asking the New Car manager's if they have any, making the point that you do not want a program vehicle but a DEMO(an untitled car). Now if your looking for a program again I suggest cars.com or autotrader. Pick the type and check prices of similar cars. With this knowledge you should be able to decide on the one you want. Remember that program cars are just used cars. I also want to note that allot of times you can get a program vehicle at a very good price compared to new. Also Call ahead of time and speak to the Used car manager about a good time for you to come by and take a look at it.

Used car markup from my experience.
The average is 4000 dollars. However some lots do not put a price on any of their used cars. Instead they tell the salesman what the dealer owns them for and says sell them for what you can. Most salesman will not start lower than 2000 over what its owned for. And keep in mind that some used cars are marked up as much as 6000 dollars, and I've also seen worse. I know its surprising but its true.


Things to remember

1. Always call ahead, speak to a manager.
2. Remember its a game but don't let it show.
3. Let the salesman think hes in control.
4. Research is the key to any good deal.
5. Everything is negotiable.
6. You do not know more than the car salesman. He does this everyday of his life.
7. Do not go to a car lot until you are ready to buy
8. Its the salesman's job to sell you the car don't get agitated.
9. Program does not equal Demo.

While I have given you some great ammo for buying a car. I have not even scratched the surface of what I learned in those 5 months. If you are considering buying soon, subscribe to this, I will attempt to add a new topic daily. However I am in the process of moving so the next few days I may not update. I truly hope I can help some people out with this info. And don't hesitate to ask there are no dumb questions in the car business.

3. Myths about buying cars, debunked.

1. There is no 3 day return policy at any dealership, once it has been driven off the lot its yours. Now someone might have gotten out of a deal but that doesn't mean this is true.
2. Telling the salesman the note you want is not a bad thing. People think that the salesman will raise the note to what you want no matter what it is. 99.9% of the time the note whether you tell them or not will be higher than what you want. Occasionally it will be lower and some salesmen not many will try and raise it to what you asked for, with interest rate. I will discuss this at a later date this can be avoided also.
3. Large dealers do not buy the cars cheaper than small dealers, everyone pays the same. however large dealers make more bonus's because they can sell more cars, which means sometimes and I stress sometimes you can find a better deal. But it really doesn't matter where you buy it. Just what you know.

-RIGHTTTT

 Just Do It!