People often joke about a car salesperson’s trustworthiness but lack to give good advice on actually how to buy your first car. Ads can be misleading, sales associates can be pushy, and it can feel like everyone just wants your big bucks.
Making smart moves when it comes to a car
purchase doesn’t have to drive you insane. Knowing what to look for and
understanding the market will help you get on the road with less stress and
more cash in your pockets.
What are the best car buying
options?
Anyone who has inquired about an auto deal based on an advertisement probably had the dealer read them the fine print. Ads can make anything sound like a great offer, but dealership digital marketing trends are designed to get you in the door, not necessarily to help you be informed.
Marketing makes base models look luxurious and
top models affordable, but going in with commercial expectations will end up
costing you more than you wanted.
There’s no such thing as a good deal for
something you don’t want. It can be embarrassing to admit you don’t understand
all of the options, but the more you know, the easier negotiating the right
deal becomes.
Buying a Car in Cash
Although Hollywood makes walking in with a briefcase of money look good, boasting about what’s in your pocket will not play in your favor when talking to dealerships.
Dealers make more significant profits when buyers finance, making cash buyouts less desirable deals to make. Telling a dealer that you’re paying in cash will give them less incentive to offer you an economical deal.
If you’re planning on buying a vehicle outright, keep that bit to yourself until you are ready to close. The upside to being a cash buyer is you can qualify for specific tax deductions and avoid worrying about car value depreciation before your car is paid off.
The best time for someone to buy outright is:
●
When you need to avoid monthly
payments
●
When you have had time to save or
have an immediate need to save
●
When buying a car for the first
time or as a gift
●
When you are working on repairing
your credit
Leasing a Car
People warn against leasing because you have no equity in the vehicle’s value, making your money as fleeting as the lease term. However, if you have to lease a car, you should keep in mind that the higher your credit is, the better your offer incentives will be.
Those who find leasing the most beneficial are:
●
Those building their credit score
●
Those who frequently travel or
have idle vehicles
●
Those who want low monthly
payments
●
Those worried about paying
maintenance fees
Who do auto loans benefit?
Qualifying for an auto loan can put you in a good financial situation because loan agreements spread payments over a more extended time than leasing. A typical lease term is three years, whereas a loan agreement usually is six.
Buyers typically spend more when taking the auto loan route, but they gain equity in the vehicle. Auto loans have the appeal of putting you in a better position later on, which is why there’s no shortage of offers.
Buyers who benefit the most from an auto loan include:
●
Buyers with low credit or improving credit
●
Buyers looking for a specific
vehicle
●
Buyers who want control over their
monthly payment
● Buyers who wish to avoid multiple credit checks
COVID-19 has put a strain on the car industry, but finding a good deal isn’t impossible. Standard leasing and loan interest rates are between two and a half to slightly over four percent. If your lender falls within that range, chances are the deal is fair.
No matter what you choose, having your credit score and financing checked and secured before meeting with a dealer will put you at an advantage. You also need to make sure you look at what you need as insurance for a leased car, as well.
To be a strong negotiator, you have to know
what’s at your disposal. Otherwise, every deal will seem to have limited
options. Just like changing a tire, you need the right
tools, and in this case, knowing what you need is your jack and lug wrench.
How to Tell if You Can Trust Your
Dealership
When shopping with a dealer makes you uncomfortable, it can be hard to tell if you’re dealing with one bad sales rep or a bad dealership. You won’t be spending money where you feel you’re being taken advantage of, but don’t let the stereotypes get in the way of you and a good deal.
The majority of auto salespeople don’t deserve the sleazy reputation and are honest people making a living in the sales industry. However, individual sales representatives, dealerships, and deals all have tells that can alert you if you should reach for a pen or your wallet.
Tricks of the auto sales trade are designed to predict human behavior in order to gain the most as a seller. To perfect the art of sales, learning how to read a customer’s emotions and even steer them in the direction you want is a mandatory skill.
There’s nothing wrong with applying a little
psychology to a sale, but certain tricks are just ways to cover up bad business
and flat-out manipulative.
If you feel like you’re becoming a cliche at a car dealership, your instinct probably isn’t wrong. It is in your best interest to promptly leave a dealership that’s making you uncomfortable, or doing any of the following:
● You’re greeted at the door: This dirty trick
masks itself as prompt customer service but starving, desperate salespeople are
never a good sign.
● You feel rushed: If the car you’re interested
in had a confirmed offer, it wouldn’t be available. Creating a sense of urgency
is an old sales tactic with buyer remorse rates higher than the interest.
● Bait and switch: The special you saw or a
promise made before you came suddenly changes when you arrive in person; kindly
let them know you’re not interested.
● Everyone is a helper: You shouldn’t need to
meet the entire office when dealing with a sales representative. This tactic is
designed to make you buy out of frustration.
● Limbo sales tricks: When a salesperson keeps
raising the bar on what you said you’re able to pay, your inner voice should be
shouting “Leave!”
● Wasting time: Granted, no car buying experience
is instant, but wasting time is an old dealer’s tool. Dealerships make you wait
to make you feel as though your time is invested, so you’re more likely to
close that day.
● Bad online reviews: Everything online has
haters, but if you notice multiple people mentioning the same grievances,
you’re probably better off elsewhere.
● They distract you: Getting transparency is
crucial when buying a vehicle, especially if it’s used. Having to pry to see
the Carfax report or to get the fine details of the deal reiterated the
salesperson is hiding the deal’s weak points.
What to Expect When Buying a Car
Knowing what traits to be aware of when searching the auto market doesn’t mean you should fear the process. Do your research and prepare yourself by asking a lot of questions. You may feel silly or repetitive, but seriously, the more questions you ask, the better.
Read the fine print when signing a deal, and don’t be afraid to walk off the lot if you don’t like where things are going. Remember they need your business, and as the buyer, you are in control.
