Dealing With A Car Dealer

Negotiating, haggling, horse trading, whatever you like calling it, is essential when it comes to buying a car. If you don’t partake, for any reason, then you’ll pay more for the car than you had to. And don’t forget, you’ll be paying interest throughout the life of your loan on an amount that could have been lower.

Negotiating the price of a car puts a lot of people into their uncomfortable zone. But, it really should not; especially today with all of the information available to the consumer. The key to confidence and a higher level of comfort comes in the form of knowledge and research.

Let’s get a bit of a jump start on your research with some key points to keep in mind when you have decided that it’s about time to change your ride.

Since there is so much information available to you, don’t try to commit your research to memory; even if you are only considering a couple of choices of vehicles. Take the time to organize your notes into a car buying possibilities folder. Make sure that you take your folder with you to the car dealer. Don’t be embarrassed or self conscious about doing this; this is a business transaction and you should treat it as such.

As a rule of thumb, car dealers have a profit margin of about 10 to 20 percent. The 20% is theirs if you pay the sticker price and it’s 10% for the car dealer if you get closer to the dealer invoice price. Keep in mind if you want a specific car with specific options that you can’t find on a dealer’s lot and you order the car; you’ll get exactly what you want, but your ability to negotiate the selling price will be greatly diminished.

Don’t let emotions or car shopping fatigue get the best of you. If you find the exact car that you want and are ready to become a buyer, keep you thinking and your emotions close to the vest. If you find yourself getting tired and mentally beaten down to where you ‘just want to get this over with’ take a break or come back another time. Remember, emotionally buying a car or buying when tired and fatigued will probably cost you money. It’s important to remember that you have the ultimate trump card. You can always walk out of the dealership at any time. Without you there is no deal and car dealers certainly know this.

The early part of the car buying process is getting competitive prices. This may not be as easy for you as it sounds on the surface. Selling cars is an extremely competitive business for car dealers. They don’t like to give out their ‘very best price’ over the phone or with just a short visit to their lot. They know that no matter what price they quote you, if you take that price a few blocks down the road to the next dealer; of course they’ll beat that price (if even by just a few dollars) just to get your business. So, you can’t blame them for being a bit protective of what their actual bottom line figure to you may be.

But remember, you control the negotiations. At some point during the car buying process, if you are serious about getting your best deal, you will have to sit down and tell the salesperson straight out that you are a buyer and if they will work with you to put the deal together then a deal may very well come together. Be very serious about this. Get the car salesperson and the dealer excited about selling you car not you getting excited about buying a car from them.

Once the negotiating sleeves are rolled up, you’ll want to negotiate from the dealer invoice price up. Never, never, negotiate from the sticker price down. And never, never, never (notice the 3 nevers!) negotiate, buy, or otherwise discuss or reveal what you’d like your monthly payments to be. DON’T even discuss a monthly payment range! You’ve done your research. You know the numbers. You know that if you get this car for that price; you’ll be in budget. Don’t discuss this with ANYONE!

And finally as you move closer to closing the car negotiating, don’t pay for things you don’t need. Everyone at a car dealership is tasked with selling and making profit for the dealer. You will, of course, have to pay for taxes, registration fees, and destination charges. But don’t pay for additional delivery charges, handling, marketing, promotional, floor charges, administrative fees, or any other dealer verbiage for things they are trying to add on to the deal. And be sure to say “thanks, but not thanks” to extras like pin stripping, rust proofing, fabric protection, paint sealant, or any thing else. These are just 99.44 percent pure profit for the dealer. And you sure don’t want them in your financial contract where you’ll even be paying interest on them.

In summary, do your research and put your findings in a folder and use it. Knowledge is confidence and comfort level. Negotiate honestly and reasonably. Don’t toss out ridiculous numbers and expect to be taken seriously. You want to be taken as a serious buyer. Don’t get emotional or fatigued. If you do, take a break and come back later. Be prepared to spend some time and work getting your best car deal and a good deal you will get.

The Truth About Car Maintenance Costs

If you walked into your local car dealer and requested a 30,000-mile maintenance service, is it safe to assume that the dealer will follow manufacturer guidelines when servicing your car? Should the dealer “only” follow manufacturer guidelines? Can they bend the guidelines…?

Here’s a recent and very common scenario that occurred at a local Toyota dealership….

A service customer called the dealer to schedule the manufacturer’s recommended 30,000-mile service for his 2005 4-Cylinder Camry. However, the dealer added several services NOT included in the guidelines.

The additional services included a coolant flush (drain and refill), automatic transmission service (drain and refill), and a power steering fluid change.

According to the manufacturer, the coolant does not need to be replaced until 100,000 miles. The automatic transmission fluid can last until 120,000 miles. And there is no specific maintenance interval for the power steering fluid.

Now, before we throw the dealer under the bus, which, don’t get me wrong, is always a blast to do, is there any legitimacy in recommending these extra services? Are there any circumstances where one may want to consider performing a coolant or transmission service 70,000 to 90,000 miles sooner than recommended by the manufacturer of the car? If we assume that we’re not driving the vehicle beyond its limits, such as racing, off-road, or a high-speed police chase, the answer is no – not in this case.

There are times, however, when it is ok to venture outside manufacturer guidelines. The conditions include, but are not limited to: maintenance neglect, abuse, vehicle age, poor manufacturer design, and poor quality of fuel.

While each of the exceptions above are fun to explore, we should highlight fuel quality concerns. Poor gas quality often leads to carbon build up, which can be remedied by a professional fuel injection service. Aside from this fuel cleaning service (which no manufacturer recommends during regular maintenance), there is no service outside of the manufacturer guidelines that offers any real or lasting benefit.

So how can a dealer recommend services outside of the guidelines set by the manufacturer of the product that they sell and service?

The answer is that car dealerships (the majority anyway) are independent of the manufacturer. In other words, they’re not bound to adhere to set guidelines. In fact, many dealers create there own maintenance schedules. This creative practice is increasing as manufacturers continue to extend maintenance services, stripping dealers of there usual high and comfortable profit margins.

Interestingly, in terms of service, a manufacturer and a dealer are in opposition of one another. Manufacturer’s set vehicle maintenance schedules to keep vehicles maintained according to their standards; however, one of those standards is “low cost.” Low maintenance costs net a positive image to the manufacturer. The service center in a dealership on the other hand, wants cars to be as “high cost” as possible to maintain.

Despite all this, there is another possibility worth exploring in this dealer versus manufacturer scenario. Given that the client called the dealer it’s likely that he spoke with an untrained and under-qualified customer service representative. The representative may have misled the client, providing outdated maintenance recommendations, as the older Toyota’s did in fact require the coolant and transmission services mentioned above.

In larger dealerships, telephones are usually answered by Call Centers. This is a group of people who know little about cars, but are generally pleasant on the phone. Call Center representatives are famous for providing misinformation and miss-reading a detailed automotive service menu, such as a 30,000-mile service on a 2005 4-Cylinder Camry. In other words, one of these representatives may have listed services which are NOT actually part of the service. This happens every day! Few notice…who actually remembers anything after: the service includes and oil and filter change, check fluids, belts, hoses, replace the air filter, set tire pressures….blah, blah, blah…

The owner of the Camry was quoted $450 – which - if the dealer was actually going to perform all that it stated, and the car actually needed it – would actually be a good deal.

The real and fair price according to manufacturer guidelines for a 30,000-mile service on a 2005 4-Cylinder Toyota Camry is $272.03 @ $100 per hour. To see the break down of the FAIR charges, cut and paste the following URL into your browser:

http://www.repairtrust.com/auto_repair_estimate_toyota_camry_4cyl_auto_2005_30k_serv.html

The service includes the following:

Inspections:

Inspect ball joints and dust covers

Inspect brake hoses/lines

Inspect brakes, pads/discs/runout

Inspect and test traction control

Inspect CV joints and boots

Inspect coolant

Inspect automatic transmission fluid

Inspect differential fluid (A/T trans)

Inspect radiator/hoses

Inspect steering system

Inspect exhaust

Inspect fuel system/lines/hoses/gas cap/induction system

The only items that actually get or require replacement:

Engine oil and filter

Cabin filter

Air filter

Transmission fluid (manual transmissions only)

Other services:

Reset maintenance reminder light

Rotate tires

Tighten nuts and bolts on chassis

The frequency of manipulating the guidelines with extra services is astounding. And it’s only one tactic of hundreds. Stretching pre-determined guidelines expands across all makes, models – foreign and domestic, and occurs at dealers, local shops and franchises. It occurs because the automotive service industry has zero accountability in any tangible sense.

Thus the service customer has no true advocate, information, or resources in which to turn, that can provide sound, fair, and reasonable prices and advice. For this reason alone, rests the foundation of RepairTrust.