8 Tips and Tricks to Avoid Getting Ripped Off at the Dealership
The time has come…. you need a new car.
Your car is spluttering. You’re no longer get excited about the idea of hopping in the car for a quick drive. The car has accumulated smells you can’t un-smell. You have started to stare longingly at other vehicles wishing you were behind that wheel. It’s time for a change.
You are now on a mission to pick, from that sea of cars, the new car for your household… but, that requires stepping foot onto a dealership. Or, you could just call us to get three quotes without leaving your chair, but, that doesn’t really work in this article. So, instead for some unknown reason, you have decided to go forth on your own, and search out a deal for your intended car.
Well, let’s cover a few tricks that dealers use to make sure that you leave feeling you got a better deal, than you actually did.
1. Paying cash doesn’t get you the deals you expect.
The story always goes that you should walk into the shop and wave around some cash. As you loudly proclaim that you are ‘here to buy a car, right now, in cash’. The dealers seeing dollar signs, falls over themselves to get the sale. Or, the modern equivalent is to talk about your huge bank balance, it’s just so heavy, all of that digital money is weighing your card down, there is so much money in your bank account that you need to spend it all, now!
Those days are gone – if they ever really existed in the first place. Remember as flush with cash as you feel, almost everyone that steps into that dealership is able to afford a car there. All foot traffic is a potential sale for a dealership. Unless you’re expecting to buy several cars, offering to buy outright is not a ground-breaking experience to the salesperson, they sell cars every day.
Also, the salespersons at your local dealer are commissioned mainly on financing a sale. So buying that car outright is often not an attractive offer to the dealership or the salesperson. You may feel like they urgently want to sell you that car off the lot, but that car lures in customers and closes sales, they would much prefer to you to sign up for financing and get your car later – with far less hassle of moving around stock and some small extra profits through financing the deal.
When it comes to buying a car, being well researched can save you thousands. Buying a car isn’t like impulse buying a TV, you’ll own this car for several years, it’s not just about getting the right price, it’s about the right car to suit your lifestyle. A car is your means to and from work, your social life, your hobbies, shopping, and tote more consumer goods back to your home. The wrong car can not only blow out your fuel costs, but also potentially limits your lifestyle. Can you fit in your bike for a trip away? Is there room to fit the dogs for a trip to the beach? Are you going to be able to fit in those flat packed furniture boxes from your next Ikea run? Is it too big to comfortably park on your street? Is it going to guzzle fuel on your long commute?
So it’s important once you have an idea of your car, or a shortlist of cars, do a comparison check and know what to expect before you set foot at the dealership. We also recommend checking out the ANCAP safety rating, but we’ll go further into that in another article. Riveting stuff!
3. Don’t Trust the Advertising
Now you’ve done your research, you’ll notice not to trust the advertising. It turns out that sometimes the sales advertised, often aren’t really sales after all. It’s like the shop that is forever “closing down” or the store that always has a “10% off” discount. Just because sign says that it is a good deal, doesn’t mean it always is. Dealerships need attract customers, and as part of competing in a saturated marketplace, they all tend to run sales around the same time. So do you’re research, and verify that the bargain they are advertising is as good as they make it out to be.
Also, if they’re advertising a good bargain, it’s likely their competitors are as well. Is the bargain really dealer specific or across the whole manufacturer? This loops us back to the earlier point – RESEARCH! Just look it up on your phone at least.
4. They Expect a Haggle… and it’s Worth It
There is the expectation you are going to spend time haggling the price, and the dealer will often gradually give way so you can get an addition $1k discount and feel like you earned it – rather than offering it up front. The problem is, it may take an hour or more to get that discount, but $1000 for an hours worth of work, is a good return for your time if you’re willing to do it. If this isn’t for you, remember there are other options than going direct to dealer, you can get three quotes from us. Dealing with a dealership and get good value means getting ready for a haggle, so prepare!
A good haggle can often include a bit of a dance between different members of the dealership, because…
5. Good Sales Teams are Trained to Work Together
To get a deal, you may still need to do ‘let me check with my manager’ dance. Yes, they still do that.
Most of the time there is already an acceptable discount in mind, but to increase the perceived value of the discount, you may hear they need to confer with their manager to get it approved. This isn’t always the case, sometimes a manager is required to approve a deal, but often, this is a way to set a hard limit on the price and establish you got a big discount and that it is as far as they can go. It develops a conspiratorial relationship between you and the agent, and they are working with you, against the business to get you the best price. That is not the case, but it can feel like it, and make you more likely to buy.
It also makes it harder to push on the price of the car, as they have set a limit with the unseen manager. Yet, to an experienced haggler, this could just be the opportunity to see if there is a bit more wiggle room on that price, and what can give them the room is by inflating the trade-in value of your car…
6. False Trade-in Values
Another tactic to win you into a sale, is to bump up the price on your trade-in value. As part of your research, if you’re trading in a car, research it’s resale value. A way to get you over the line for a sale is to make it feel like you’re getting a great price for the car you are trading-in. Actually, you got an alright discount on the purchase price of the new car, but by increasing the value of something you already own, it makes you more likely to feel flush with cash and in the mood to spend, spend, spend!
Though you can use this to your advantage to hone those haggling skills, once they have gone to the manager or you feel your not getting much budge on the purchase price, you can use the same tactic to negotiate a higher trade-in price for your car, locking in greater discounts off the new model without revisiting the same discussion.
7. Call Other Dealerships Once You Get a Price
Once you have a price, don’t feel pressured to make the decision then and there. You can step away and then call other dealerships to see if they can beat the price you’ve been offered, or provide perks or bonuses. Can you get the same price with additional optional extras? Take a breath, remind yourself it’s acceptable to step away and compare prices.
Late in the negotiation, if you look likely to buy, you may find yourself in a private room, or deeper in the dealership to look over the offer. It’s a great tactic, it is a way to increase the pressure on the sale without having to engage in a hard sell. At this point, you are close to spending a fair chunk of change on a large consumer purchase, step away, call another dealer, to make sure that you are getting the right price.
8. What Signals Are You Sending?
Arriving with a significant other usually will signify you are a lot closer to making a sale. Having a full tank can signify that you are researching your options, and not as likely to buy on the day. If you’re playing loud music through your speakers on the way in, you may be shown models with a beefy sound systems. Arriving with a small child in a pram would rule out the likelihood of a two-door sports car.
The clothes, the car, how you present yourself can send signals on how willing you are to buy and what cars they should show you – but you can also use that to your advantage. By showing signals that you are ready to buy you can force an urgency to the sale, so the agent feels pressured to discount and close the sale. Use this to negotiate a bigger discount. In other words, if you can, bring a significant other, or for those without, bring someone along who could look like a significant other. They can also step away to Google any information you get, and price compare with other dealers.
[Bonus Point] Or… get someone else to do all the work
You are now armed with some good advice to lock in a good deal for your desired car.
Yet, we will get a better price, at least 99% of the time. We do this for a living, we get fleet discounts, and we have a reverse bidding system so dealers have to bid for your business. Instead of negotiating, they have one opportunity to submit a price and we pick the best one, it bypasses the long negotiation process and locks in a really good deal.
No pressure. We are just giving you the option. If you feel like it, you can go to our calculator page, put in the car you want, and request a quote. Then go back to procrastinating at work.