When Buying a Car From a Dealership Know What You Are Going To Buy Before Meeting A Sales Person
posted in General Information |The first profit center you will meet when entering a dealership is the sales department. The word “profit center” is not an accident. Yes, they exist to make money and secondly inform the customer about the inventory available. To this end, it is important to first learn the motives of the employees of the sales department. They are generally paid base plus commission. This means they will push the units which will provide either the most profit or special bonus. Their goal is the get the customer to agree to the highest price possible on the unit. They also will receive bonuses for selling select units (usually vehicles which are difficult to move or have been in inventory for a long time).Know what you are going to buy before meeting a sales person. If you do not know, use the sales person to show you around, but do not buy on the first day. You may ultimately buy from this person, but go see others (on different days) before buying your vehicle. They will push you to buy a vehicle today, but the longer you take the more the price of the vehicle will magically drop. The key to getting a good price is time. Visit other dealerships, and make sure to tell the dealers you are visiting other dealerships. You might even want to discuss the price the other dealers are giving you. Play one against the other.Once a price is agreed upon buy the customer and the sales team, the next profit center to visit is the F & I (Finance & Insurance) office. These employees are the most well paid individuals in the dealership, and there is a good reason for it. They make their money on selling financing contracts, extended warranty agreements, and insurance. Before entering the F & I profit center, have your financing secured (bank contract or cash in hand). If you can receive 0% financing (available for 720 credit bureau score and higher), then the dealership would be the only place you can receive this. This should be the only reason a customer should let the dealership run their credit score for financing. Do not tell the sales team you already have financing or are going to pay cash for the unit. They have no need to know this and will sometimes take a lower vehicle price on the car if they believe they will make money on the financing.Extended warranty agreements and insurance can be purchased after you leave the dealership. There are many different types of warranty products and insurance available and they should be researched for best that meets your needs. The F & I office offers these products at cost plus. The plus part of the product cost at the dealership can be up to 300% of the cost of the vehicle. If financing a new vehicle, do consider a rarely used product called gap insurance. This covers the purchaser for the difference between the insured value of the vehicle and the loan value remaining if the unit is totaled. Gap insurance can also be purchased outside the dealership.