Have a friend who thinks they know everything about buying a car?
They might not be as savvy as they think!
Here are 5 common car buying myths that trip up many consumers.
1. Tell the salesperson that you have found another car to buy if they don’t offer you a better deal.
This hardball tactic will sometimes pay off. But it can also easily lead you to miss out on a good buy for the sake of keeping up appearances. Salespeople have seen it all when it comes to negotiation tactics, and can often call your bluff. Quickly, you can find yourself in a stalemate, where they are refusing to go any lower and you feel forced to turn down the deal in order to save face. Rather than basing your negotiation off an imaginary second car, you will get the best result by making your argument on the premise of quality, capability and market value.
2. Buy on a rainy day
The logic behind this strategy is that in bad weather, buyers will stay away from the dealership – who wants to get wet while car shopping?! An empty lot means that the salesperson will give you extra attention and be more desperate to make a sale.
The problem with this tactic is that it’s not new. In addition, a rainy day can mean that tradesmen are off work and outdoor events are cancelled, freeing up more buyers to go car shopping. As a result, lot of people attend a dealership in a bad weather expecting to be alone, only to find that it’s packed.
While a rainy day won’t guarantee you a good deal, there are still certain good times to buy:
Toward the end of the month. Dealerships have monthly quotas to meet to ensure that they hit their profit margins. Salespeople earn commission and want to stay in the good books with their boss! As the end of the month approaches, a salesperson who is a couple of cars off their quote will be eager to close a deal.
Just before a model redesign. Manufacturers reinvent their products every three to five years. As new models are released, the desirability of earlier models immediately drop. This drop is reflected in pricing.
At the end of the model year. Dealerships don’t like to hang on to old models. This means that buying a 2013 car just as the 2014 models are released usually translates to a saving.
3. I found the same vehicle advertised cheaper online. If I take a printout to the dealership I’ll get a better price.
If Bunnings sold cars, your logic would be flawless. Unfortunately, the dealership world doesn’t work that way. Instead, car prices are dependent on supply and demand.
Say you have found a car at a dealership for $20 000 – but that same car is advertised elsewhere for $18 500. Even if you approach the salesman and ask them to match it, they are under no obligation to do so. Particularly if another buyer is interested in the vehicle, they will see no reason to oblige to your request. In the end, why sell a car at a cheaper rate when another buyer is willing to pay the ticket price?
You will have more luck negotiating the price of a car that is in low demand, whether or not you have a price point to compare it to.
4. All warranties offered by the dealership are a waste of money.
It’s true that dealers try to throw multiple extras to milk the most out of a sale, and many warranties are sold at highly inflated prices. At EAI, we recently had a customer who paid $500 for a warranty that didn’t even cover the most basic of repairs.
However, this doesn’t mean that all warranties are a waste of money. At the right price and level of cover, an extended warranty will usually pay for itself. The key considerations are:
What is protected by the warranty
Under what conditions
Who the warranty is through
For peace of mind, be sure that the warranty is either supplied by the manufacturer itself or is supported by a large company with a strong reputation.
Remember that you can always negotiate the warranty price as well as the cost of the vehicle itself – don’t be afraid to ask!
5. The dealership that I buy my from will service my car at a better price.
Many cars bought from dealers come with a servicing package. However, the price they offer is often incomparable to independent workshops.
Why?
Dealerships are made up of multiple departments: sales, servicing and repairs. This means that they have a lot of staff and overheads to pay – a cost they pass on to customers through an inflated labour rate. In addition, dealerships will only use genuine parts, whereas an independent mechanic can usually source parts of comparable quality that maintain your warranty for a cheaper price. The end result is a higher price for the same service.
Still confused by these common car buying myths? Contact us for a professional opinion!
