Re
ay in the Car Business
As an added foot note:
In a new car dealership, the sales department is divided into three seperate depts. New cars, used cars, finance. Each Dept has a manager that is responsible for making money in that department. You have to combat each department one at a time to be sucessfull.
Most people want to buy there new car for what the dealer paid. Sell there car for it's reatail value, and reap the benifits. You've even heard dealers say, "I can't sell you my car for wholesale and trade with you retail." I have to give you wholesale for your car too. Wholesale to wholesale or retail to retail.
Most people don't know what wholesale values are therfore, they get into a fight with very little to fight with other than an idea. I say fight with facts and come out on top. Use the dealers facts against them.
Buying new cars is simple. The formulat is: Retail to Retail minus rebates:
1. Go to any website like
www.kbb.com (Kelly Blue Book) or edmonds ect. and find the RETAIL value of your car. Be honest as to condition and print the page. *What you owe on a vehicle has nothing to do with value*
2. At this point decide wheather you are in a position to trade. Compare retail value of your car verses payoff (if any). If you owe more than what your car is worth, be prepared. You already owe that money. If less than, you have equity ;D
3. Decide on make and model of the new vehicle you would like to purchase with all options you would like to have.
4. Locate a dealer with desired vehicle and say the majic words to your salesperson, "I will buy today, If all figures are agreeable." This saves time. The salesman will demo you in the vehicle and you can verify that this is the new vehicle you would like to own. If this isn't the right one, tell the saleperson and maybe they can help you find the right one. Remember, the saleman don't get paid until you buy, so at this point, they want to help. If this is or you find the right vehicle based only on vehicle and options (not price) repeat those majic words.
5. This part will floor you and the salesman: Tell the saleman when he asks "Where do you want your payments?", "We are not to that part yet. I'll buy your car today for STICKER, if you buy mine for STICKER too." And give him a copy of that Retail value you printed out on your computer. The saleman will look at you funny, get the keys to your car and have the "Used Car manager" look at you car. The used car manager looks at your car as if he is looking at this at an auction, and will only put a value he believes he could buy it for if he were the only person at that auction. You probably won't ever see this value because he will write it down on a secret piece of paper and pass it to the "Desk (New Car) Manager" (this is the guy that will structure you deal). The desk manager will look at and roll his eyes and try to beat up the used car manager for more money on the spot. If the deal happens then the used car manager will own your car for the value that is on that paper. To make money for the "Used car Dept," he will try to keep this figure as low as possible. The "Desk Manager or (New car manager)," in an attempt to make money for his department will try to get the Used Car manager to inflate the value given. All of this is going on while you wait patently. The salesperson eventually comes back to you with four peices of information: 1) Sticker for new car minus any rebates, 2) Very low trade value for your car, 3) Very high Down payment, 4) Very high monthly payments. This is designed to send you to the roof. Did it work? How many of have walked out at this point? Waiting for the best deal only to be shown a deal that the dealership would like to have. SOBs should be shot. Most folks blow up on the salesperson, and then a "Floor Manager" comes out and tries to close the deal.
6. Maintain control and remove you emotions. Wheather your talking to the sales person or a manager doesn't matter. Simply repeat those majic words, "I don't have a problem with paying sticker for your car, but we won't be able to do business today if you won't pay sticker for mine too. As far as payments and down payments go, I'd rather discuss that with your finance manager, or my bank." A statement like that will send the "Floor manager" or salesperson running back to the "Desk Manager." While they are in conferance behind closed doors, stand up. This will put a sense of urgency in the managers to make a decision. The management team will likely try to infate the value of your trade by using the rebates. Rebates are yours, given to you by the manufacturer, not the dealer. Don't let them use the rebate to inflate the value of you car. If the management team is unwilling to trade with you retail to retail minus rebates, find another dealer who is. If they agree to your terms, they will send you to the finance office to discuss payments and monthly payments.
It is alway a good idea for you to sit down with your bank prior to shopping, and get an idea of exactly what you will qualify for. Have your bankers phone number handy.
7. The Finance manager will try to sell you everything under the sun from credit life ins, GAP ins, maintenance plans, and extended warrenties. You have to decide for yourself which products you could use or not. Since I personally finance most new cars with very little down payment, I prefer GAP ins, in the event I total the car prior to obtaining equity. Don't buy into the more products you buy, the lower your intest rate will be. That is a scam.
8. The finance manager will be very ambiguis about what your payments and interest rate will be especially after hours because he has no approvals from any bank yet. He will try to structure a deal based on guidlines he/she has from these banks with HIM making the most money. What do you do? Buy cars during business hours.
9. Interests rate do vary based on the amount of down payment. Putting money down is not a bad thing and often times helps you obtain interest rates better than you thought. Tell the finance manager how much money you want to put down if any. Obtain the exact amount to be financed and excuss yourself from his office and call your banker. You banker will work for you and tell you what they can do based on the money you are willing to put down effects the overall amount to be financed.
10. Go back to the finance manager and tell him what your bank says they can do. Whenever he gives you a payment and a rate, ask to see the approval and the BUY RATE from that bank. This might even make him mad, because the buy rate is exactly that. This is the rate that bank will buy the loan from the dealer for. This is the rate you want to pay. It's ok if the finance manager gets mad, this is your money. If he is competitive with your bank, you decide what to do. If he is unwilling to compete with your back, have him fax your banker the "Buyers Order," and they will work out the details of exchanging the funds. Or you can take a copy of the buyers order to you banker and get the funds yourself.
The end. "Coffee is for Closers"
John-
This formula also works on used cars too.