In this video I show you how to prepare for the car dealership. If you’re a first time car buyer and don’t know how to buy a car or just want to avoid dealer scams and get the best price, this video will cover what you need to know before going to the car dealership.
How to Prepare for the Car Dealership
Know and understand these 8 steps before you visit a car dealership.
- Do Your Research
- Common problems for cars can change from year to year or even by trim level. One model year might have paint chip problems while the next one has a leaky sun roof.
- Someone has owned what you want to buy next. A quick Google search can save you years of time by discovering common problems before you buy.
- For example: A Jeep Wrangler forum told me my 1994 Jeep Wrangler YJ transmission would fail around 100,000 miles. And in fact it did at 105,000 miles. But the same forum also said the pricier 6 cylinder engine had a different transmission even though it was the same make and model year. And that transmission lasted at least twice as long.
- Know Your Comps
- Your ability to negotiate is proportional to your ability to walk away.
- Be current with common pricing for the car your want to buy as well as the common prices for alternative cars that other people might be interested. This will give you a reason to walk away in car price negotiation with the dealer.
- For example: If you’re shopping for a Ford Escape also inform yourself of what a Chevy Equinox is selling for right now.
- Time Your Purchase
- When’s the best time to buy a car? The slowest day of the week on the last day of the month, last day of the quarter, and last day of the year
- Also be aware of how the car you want to buy loses value over time.
- For example: A Mercedes E Class loses 50% of it’s value in 3 years while a Jeep Wrangle loses 50% of it’s value in 8 years.
- Know the Lot Time
- Know how long a car has been on the dealership lot by using a website like cargurus.com.
- Car dealers are much less likely give a big discount on a car that just got on their lot and much more likely to give a discount on a car that has been on the dealership lot for 60-90+ days.
- For example: The biggest discount I gave as a former Mercedes Benz car salesman was on a car that had been on the lot for 90 days.
- Shop Your Trade-In
- Request quotes for the value of your trade-in from multiple car dealers.
- The easiest place for a dealer to move $500 around is between your trade in and your purchase
- For example: A car buyer might be getting the most for their trade from one dealer, but that same dealer is selling them their next car for more than anyone else.
- Shop Your Financing
- Request financing rate quotes from at least two sources. Here are the latest car loan rate trends for new and used car buyers by credit score.
- Sometimes the dealer has promotional rates that can’t be beat. But other times a local credit union has the best rates for new and used cars.
- For example: Car dealers can sometime get a kickback if they sell the car buyer on a higher rate, even though the buyer has been approved by the lender for a lower rate.
- Shop Your Warranty
- Car warranty price can vary significantly so always request a quote from multiple dealers.
- Car warranties can be as much as 50% commission for the sales person or finance manager.
- For example: In my life, I’ve purchased a new Ford Escape without a warranty and a new Ford Transit van without a warranty.
- Come With a Purpose
- Car dealers are more likely to give a discount to buyers that are ready to buy.
- Give your visit context by explain the alternatives you are also going to look at next.
- For example: On the test drive tell the salesperson the car you’re going to look at next at another dealer has features you miss in this one. This creates points of leverage at the negotiating table.