Tips for Purchasing a New Car from a Dealership: Avoiding Common Pitfalls

When it's time to purchase a new car, many people feel overwhelmed by the process. However, with some careful preparation and understanding of the common pitfalls, you can make the process smoother and even avoid getting ripped off by dealerships. This guide provides tips to help you navigate the car buying journey.

Understanding Price Add-ons and Avoiding Being Upsold

The key to avoiding being upsold at a dealership is awareness. Many dealerships will offer special service/maintenance packages, additional warranties, delivery fees, and destination fees that you may have already paid for. Here are some steps to take:

Avoid being sold additional services: Be cautious of offered special service/maintenance packages, additional warranties, and gap insurance. These may be things you have already included in your total price. Understand all the fees: Read the fine print regarding delivery, destination, and dealer-installed accessories to ensure you are not paying for the same thing twice. Know your budget: Ensure you have a clear understanding of what you can afford, including all related costs, before you start negotiating. Do not let the salesperson distract you: Avoid going back and forth with the salesperson to the sales manager. They often push additional services and add-ons.

Buying Over the Phone for the Best Experience

Many experienced car buyers rely on the convenience of buying a car over the phone. This approach can save you a lot of time and hassle. Here are some steps to follow:

Call the Fleet Manager: Reach out to the fleet manager at the dealership and request a no-haggle rate. Be Prepared: Aim for a price that is either at or just above the factory invoice, often around $400 over the MSRP (Manufacturers Suggested Retail Price). Ask for Delivery: Request that the dealership can deliver the car to your home. This can be especially helpful if the car is located at another dealership. Compare Prices: Inform the dealership of the prices from other dealerships, as they compete on price.

If you are particularly fortunate, you may only need to pay an extra fee for special services, rarely more than a couple of hundred dollars.

Demonstrate Your Knowledge and Preapproved Financing

Being well-prepared can significantly reduce the pressure during the car-buying process. Here are some steps to follow:

Get Pre-approved for a Car Loan: Applying for a pre-approved loan from a credit union, bank, or credit card company can give you a clear understanding of your spending limit, interest rates, and monthly payments. Keep Your Plan Private: Don't flaunt your preapproval or knowledge while on the lot. This can give the dealership an incentive to offer better terms. Compare Offers: After receiving offers, you can decide whether to go with the dealership's financing, your preapproved loan, or seek better terms elsewhere. Take Advantage of Lowest Rates: If you find a better rate elsewhere, you can pay off the loan early with a 0% interest charge or clear the loan at any time for a lower rate.

Choosing the Right Companion for the Purchase

Bringing a friend or relative who believes they know everything about car buying can be counterproductive. Often, they might have an agenda or may complicate the negotiations. Therefore, it's best to buy on your own or seek the advice of a trusted professional.

Conclusion

With the right preparation and knowledge, buying a new car from a dealership can be a seamless process. By following these tips, you can understand the pricing structure, avoid unfair practices, and ensure you get the best deal for your budget. Remember, being prepared and staying informed are your best allies in this journey.