Did you recently take on (or consider) a loan of 84 months or longer on a car purchase?
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Dealer's Tricks - bait & switch, etc.
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Jeep is very soft...our used car dept doesn't want them, so they will hit them really low.
It's june, and most of the rental co's have been droppin since right after Easter and the majority through August... it' been that way, for a lot of years, but the #'s are greatly exgagerated.
Keep in mind , if you want to see your potential purchase early --- go rent a 2002 -- rentals are on the ground before the dealers get them as a rule -- and that is across the board...
But the programs that - Isell - is talking about is on "any" of the big hitter SUV's..not just Chrysler -- want to see a few knock out's -- check the Edmunds incentive programs --- Land Rovers, it's like lemmings leaving to the sea.. --- Lexus, Infiniti etc, so again, it is across the board...and the passports (Isuzu's) --- So Isell, do you get paid on the dealer cash on that, at your store..?
Just some food for thought...
Terry.
But I agree, if everyone at the dealership acted like they never heard of their own ad, then this is a dealership to avoid.
Thanks
Shawn
Dealer appears to be wanting to make about $1,200.
I often wondered just how much my customers knew about the inside tricks in the car business. There were always a few that had heard of certain tricks, but consumers are taken advantage of every day and I know some things that may save your hide. And your wallet. I now work in consumer fraud and consumer law and one of my favorites was the "leg" (short for legroom) built into a payment. This only applies if you're financing at the dealer. Let's say the car your negotiating on is $15,000. Just using round numbers, a payment (with money and interest only) is $300. The salesman shows you $400. You go back and forth and "close" on $360. When you go into the finance office, the F&I guy has at least $2700-2800 worth of warranties, credit life, disability, mop and glow, fabric sealant, etc to include in the payment. Let's say he does $3500 worth of aftermarket stuff - he can offer you all this protection for only $20 month and your payment is $380. The catch is, you haven't been bumped $20, you've been bumped $80! It happens more than you can imagine.
Can you tell I didn't enjoy a large part of the car business?
he deserves what he gets.
To avoid the "leg" payment scam, simply ask for the "stripped" payment, shown in long-form, and the sales manager will HAVE to drop his shorts, knowing disclosure at this point is mandatory.
Usually, depending on the dealer and if they sell vehicle protection products like undercoating, paint sealant (referred to as "mop and glow"), fabric protectant, alarm systems, window tint, lojack, etc, the buyer will go for SOMETHING and you can do the "Wizard of Oz" magic behind your screen.
There have been many occasions where I've been given too much "leg" and the customer bit on the first "pencil". After everything I had to sell was sold and the rate marked all the way up, I still had too much payment (that the customer had agreed on) to meet the actual number. My question is at that point - you don't mind if your payment is lower, do you? I think the sales manager made a mistake to your favor!
Anyone who negotiates a car based on a monthly payment is obviously fair game for someone wanting to make a profit.
Car dealers target payment buyers and like I said before, 95% of all car buyers are payment buyers. All salespeople are trained to get you off price, trade value and interest rate and keep you off those things an ON PAYMENT because that's where the money is.
If this discussion doesn't apply to you, good! You've done your research and I can try to "big brother" someone else. I'm just trying to help - jeeze!
Of course, there are people that are going to be aggravating, inconsiderate, etc, and that's a different story. Just too often I hear stuff like "anybody that doesn't do their research deserves to get ripped off". Nobody knows everything, and we're all going to be uninformed when it comes to something.
Andre:
You know what I hear most often? "It's not my fault."
If dealer will only negotiate on payments... Walk out.
Dealers who use negotiating tactics like this, in my experience, are generally not the kind that you want to do business with.
I think that over the past several years consumers are getting a lot more informed, and that dealers are getting a lot better, but a ton of them still deserve the stereotype. That being said, from where I sit at the moment, a lot more than 5% of the customers are informed.
Bill
And, I doubt if even 5% of my customers are "payment buyers". The few that are usually have bad credit and can't qualify anyway.
I'm sure places this exist. I would like to believe they are becoming extinct.
I mean, I'm sure a lot of people are leasing Jaguar S-Type 3.0s ($500-550/mo x 36mos x $2,500 or so out of pocket) who otherwise might have gone with a cheaper buy price car.
That being said, I don't meet very many customers who only care about what their payment is. Evenpeople who are leasing are generally quite curious about what the cap cost is.
Bill
Honda is advertising a 5.9% interest rate for 5-years. I imagine that there is a good chance I will qualify for this lower rate.
Any advice to keeping the 'discussions' focused on the ultimate sellnig price, and not getting lost in the monthly payment?
Unless you've already been talking to someone there, I'd walk in, when you meet the salesman say "I saw that you have CRVs advertised for 3% over invoice, I want to pick one out, take it for a drive, finance it at Honda's 5.9% and drive it home this AM".
Just stay focused on buying the CRV at that price and let them know that you want a CRV at that price NOW. That's what will get a dealer's attention.
Bill
TRON
When I'm sure I want to buy the car and I'm trying to get the right price, I first ask the salesman, "Suppose I buy a car from you, and we agree that a fair price is $10,000, just to pick a number, what will I have to pay to drive it away?"
That's a fair question, and the answer will include any "dealer prep" charges, DOC fee, advertising fee, taxes, etc. Just take notes, then go from there.
On the argument over payment buyers; if you know that $10k cash cost $200 a month over 60 months and $300 for 36 months (get exact numbers from a finance calculator), it's hard to get confused over total $$ vs. monthly payment. Talk lump sum with the dealer, and do the monthly payment numbers in your head so you know where you're headed.
It's not rocket science, but a good grip of algebra helps.. bring a note pad and do it at your own speed. Salesmen like people who are ready to buy...
Happy hunting!
Rebate Scam; Chrysler dealer in Goldsboro, NC brags about this shell game to rid their customers of the rebate. When closing, the sales manager adds the rebate to the price of the vehicle so the customer can pay taxes on the rebate (you don't tax the rebate!!). The rebate is removed at the bottom line; the trick is the rebate was never deducted from the price, just added and subtracted. You not only lose the rebate to dealer's gross profit, you lose the tax amount on the rebate (i.e. $2000 rebate @ 6% is $120). You not only lost the rebate, you lost $2120!!
Yield Spread: Most financial lenders allow the finance contract to be written at an interest rate up to 3 percentage points over the buy rate. Ford Credit's Ford Fairlane, in some cases, allows up to 5 points. For reference, the approximate difference between 9% and 12% on $20000 in a 60-month payment is $140! ($360 vs $500)
Bait and Switch: This is the oldest trick in the book. A vehicle is advertised at a killer price, payment, etc. It goes like this: 2001 Brand X Extended Cab 4-Wheel drive with Air Conditioning and Cassette Stereo for $19995 or $299 a month! Two problems here: This truck has a manual transmission ($1000 less than an automatic), no carpeting, roll-up windows, vinyl seat and no super cab rear seats. The one you want with carpeting, cloth seats, power windows, cruise control, etc is $28000 and the $3000 rebate that applied to the ad truck doesn't apply. The fine print says $299 per month based on 72-month lease with $3000 rebate to dealer, $3000 cash or trade down and 750 beacon score or above. The average Joe can't qualify and the rich guy that can doesn't want a truck without carpeting.
Public Notice Sale: Usually involves "due to a computer error, we've got too many cars! Bunk. Dealers have to work so incredibly hard for allocation and manufacturers are so stingy, no one is going to make an error and put 50 extra cars on the lot. That's as probable as a bank error in your favor. Watch lines like "only through Saturday", factory authorized liquidation (of course the factory allows you to sell cars) if you check with the manufacturers web sites or consumer publications, you'll find most rebates and finance incentives last for several months or all year.
Extended Warranties: I only recommend manufacturer-sponsored warranties and these are useful if you get a low deductible and pay the right price. These warranties, unless dictated by state statutes, are negotiable!! As an F&I guy, I usually averaged between $800 and $1000 profit on each one; negotiate or don't buy it. Aftermarket warranties are not "warranties" at all, just an insurance policy. Each service department goes through a great deal of trouble to get claims authorized; on big claims, an adjuster or inspector will come out to try to deny the claim; the biggest trick is finding a dealer or mechanic shop that will honor the policy; most won't because they aren't set up to direct-bill and don't want the hassle of non-payment. Many smaller service contract companies have gone bankrupt, leaving the vehicle owner with a worthless contract he may have paid thousands for!
Aftermarket Products: Undercoating, Paint Sealant, Fabric Protection, Alarm Systems, Window Tint and Pin Striping are products often sold at delivery for several hundred dollars each since they only make a "few dollars" difference in your payment ($10 X 60 months is $600!). Undercoating can be purchased for $5 a can and sprayed on in your garage; Paint sealant is a joke, but you can buy sealing waxes at department or auto store for less than $10; 3 cans of Scotchguard or other fabric treatment can be purchased for less than $20 and will cover all the fabric and carpeting in a full-size SUV or van. Window tint and alarm systems are usually marked up 200-300% - have them installed by a private shop. Pin striping for $99.95? Enough said. Have your brother-in-law with the steady hands buy a $5 roll of striping and have him spend 15 minutes on your new car. If he makes a mistake, he can peel it off and start over! The 12-pack of beer and listening to his boring stories certainly cost less than $100!
great stuff, zueslewis!
...it's a marathon, not a 50 yard dash, keep up the good work.
I.E. Car: $20,000
Trade: ($ 5,000)
Total: $15,000
Tax 5% $ 750
rebate: (1,000)
And, I think that you need to avoid dealers that use those advertising methods. I have yet to see anyone who dealt with a store like that have a pleasant experience.
carbuyingtips.com has some good advice, but I noticed a couple of things... It seems to be virtually nonstop revenue generating links, and, gee, he didnt get a very good deal on either of his cars...
Bill
Have not researched if a rebate is taxable however, if a dealer (or anyone else for that matter) keeps money collected as sales tax he can serve time in the big house. A business collecting sales tax is an agent of the state and pocketing cash collected, as sales tax is the same as embezzling from the state and is treated as such.
If a business discovers it has inappropriately collected sales tax before remittance to the state he must refund it to the customer or remit it to the state. Keeping it is not a legal option.
Then, being smart enough to brag to me about it!
It amazes me, especially after working for two very good, ethical, upstanding dealer groups, that there's guys out there doing this kind of stuff that are brazen enough to think someone isn't going to say something.
However, if a customer has a bill incorrectly charging sales tax on a non-chargeable item and the dealer refuses to do anything about it contact the states attorney generals office or the states department of revenue and send a copy of the bill.
What often works better is get a local paper involved.
The customer is entitled to a rebate from the state for the incorrectly collected sales tax.
The dealer is the states agent not the car buyers and thus it is the states responsibility to decide on recourse against the dealer.
Do not be surprised if the state proceeds cautiously as they often receive calls from disgruntled customers engaging in get back at a dealer.
My only point here was a less than reputable dealership can do many things and get away with it but stealing sales tax is dicey business even for them. People just need to report it. The proof is on the invoice.
I had not realized you started the forum. I guess your point is it happens and no one reports it.
I just found the sales tax commentary interesting because it is fairly easy to document and report and has some real downside to the dealership.
On most of these customers, there's also an issue of the sales manager lying about a "lease to purchase" plan and completely misleading the consumers. Most would not have taken "his great deal" had they known the truth.
I agree with almost all of what you say, but the difference in payments on a 5-year, $20,000 loan at 9% vs. 12% is a little less than $30 ($415.17 vs. $444.89), NOT $120. Still, over 60 months, that $29.72/month difference adds up to $1783.20, not an inconsiderable difference.
For all: If you have a PALM device, there are several loan calculator programs you can get for it to calculate payments, etc. Car salesmen and sales managers find these very intimidating! And you can cross the bridge between "total price" buying and "payment" buying with no problem. Careful use can help you get a very straight deal...
Payment buyers that don't do much research would probably not buy a palm device.
You're probably right about those payment buyers. I usually AM one, but only in reasonable terms (for example, I just bought an 01 Pathfinder that I would NOT have bought without the 3.9% APR, which in that case did indeed make about a $65/mo. difference (vs. 8.5%), which would have put the car over my monthly payment limit...but I still did the deal on the total cost/trade/etc.)
Cheers.
Just thought I'd tell you that formally--and there are also plenty of other ethical dealer type folks who have participated here (hey Brentwood
Just a bit *irritated* tonight because we went to look at two Avalons at two different dealerships this evening and one of them tried a bait-and-switch and the other one kept us waiting for over 10 minutes when there was *no one* else there. With a child with us. We walked out, of course. Makes me want never to step inside another dealership ever. Probably was fate, because we're not too sold on the Avalon's reliability anyway. Guess we're back to Maximas/new Altimas. The Nissan salesman has been decent so far. But hey, there's always tomorrow...
Please keep the faith and follow through on your plan, zues (do you love how someone symbolically misspelled your name zeus?
ajacat aka Carolyn
And, that "tired old V-6" that dates back to '92 is actually a VERY good engine!
For lease payments a $5 calculator works fine as long as you know the formula which has been explained many times in Edmunds.
Anyway, padding the interest has to be the hardest thing to pick up on of the things brought out here. I mean, how do you know what the dealer's buy rate is? If the manufacturer is offering the dealer a really cheap buy rate, the dealership can pad it and still offer a market rate, right? For this reason, it makes sense to whittle down what you pay to get as close to zero profit as you can...the dealer always has the interest spread. I don't think the salesman shares in it, though.