For the past year, I have been employed at a small used car dealership in Allston, MA which means two things: 1) dog(eat)dog cards hasn't exploded yet and 2) I'm a used car salesman. Yes, that's right, a used car salesman. In terms of respect, I would guess that I rank just below "politician" and just above - but only slightly - "lawyer." But how, and why, did I get here?
Believe it or not, I have been fascinated by cars since I was a kid. I had a Lamborghini Diablo poster as a child and when Cameron kicked his dad's Ferrari 250GT into the woods, I nearly cried. (FYI: No real Ferrari was hurt making that film. They used a modified MG instead. Phew.) I even applied for a job at Saturn in 1993 because I really liked the way they handled their customers. Of course, the way they built cars left a lot to be desired.
So I was filled with both pride and excitement when I landed this job. I would be selling Mercedes, BMW, Porsche and Range Rover to name a few. And my trepidation as being labeled a "used car salesman" were temporarily alleviated when I realized that people really liked to talk about cars. When they find out I work at a dealership, the next question is always "What type of cars do you sell?" Naturally, I always start with the 2005 Bentley GT that I sold and then I follow it up with a couple of Porsche 911s. This always brings some oohs and ahhs.
But let's face it, I'm a used car salesman. And I've learned some things along the way that you might find helpful if you are in the market for a new-to-you car.
1) Decide on a car first. I'm amazed that people walk onto a lot not knowing what they want. In fact, some people don't even know what I have in inventory. Big mistake. If you walk onto the lot and I know that you haven't checked my website, I am automatically going to add $2000 to the price. Why? Because I know that you're going to think it's too high and then you're going to haggle anyway. At least I have some play.
2) Get your own financing. Unless your credit is terrible (and if it is, should you be financing a car anyway?) get your own financing. Dealerships get a "kick-back" from most banks called a reserve. If the bank approves you for 8%, we might charge you 10.5% and say "well, your credit isn't all that great and it's an older car." The extra 2.5% goes to the dealer. If your credit is terrible, banks don't allow the reserve and will charge you a higher rate anyway.
3) Hire a mechanic. Before you drive the car off the lot, have an independent mechanic look at the car. In Massachusetts, you are somewhat protected by the Lemon Law but the law doesn't protect you against bad tires, brakes, and other parts that may fail in the first few weeks. If the mechanic finds some things wrong with the car, use it to negotiate the price.
4) Trades. It used to be said that if you have a trade, keep it a secret until you've negotiated the price of the car. This necessarily isn't true because if you have negotiated the price of the car you are buying, chances are the dealer is going to low-ball your trade anyway. If you have a car to trade in, go to KBB.com and NADA.com before you go to the lot and get trade-in values for your car. Make sure you add the options your car has and mark down the mileage. Print it out. Bring it with you. When the dealer tries to low ball you (and they will), you have ammunition. Of course, be realistic: if your car needs $2000 in repairs and you're trying to dump it, be fair.
5) Carfax and Autocheck. Many dealers offer free Carfax's and some offer Autochecks's. Autocheck is used exclusively by eBay motors and we use it because it's a lot cheaper than Carfax. Both of them are good to a point. They will show you the number of wners, any accidents, and if the title is good. But don't rely on either one exclusively because I've seen mistakes on both. We had a 2007 Mercedes S550 with a "bad Carfax" and even the Mercedes dealer couldn't tell where the car was hit. Anything over $1000 gets reported and in that car, it could have been a broken head light.
6) Extended warranties and GAP Insurance. If a car is out of factory warranty, the dealer will probably try to sell you an extended warranty. In principal, I think extended warranties are a good idea. I've seen them come in very handy and save customer's thousands of dollars. But you don't have to buy it at the dealership. We have a huge mark-up on our warranties (about $1000 per policy) and there is no negotiating the price (usually). GAP insurance is also a good idea if you don't have any equity in your car. GAP works like this: if your car is totaled in an accident and you owe more than the car is worth, GAP covers the difference. If you are buying a car with no money down, get GAP insurance. If you have at least 15-20% equity, don't worry about it.
7) Money back warranties. Some dealerships offer 7 day, 10 day or even 30 day money-back guarantees. Check the fine print on these. Some dealers will charge you per mile driven so if you drive the car 1000 miles in the 30 day period, it might cost you $300-500 to return the vehicle. Just make sure you know what the terms are before driving away.
8) Dealer fees. Most dealers have added fees that they don't tell you about until you are all excited about the vehicle and want to buy it. That's when we hit you with our "documentation" fee and our "running" fee. I tell people that the doc fee is because we have to save all of our paperwork for seven years (true) and that we get audited a lot by the state (kind of true.) I have no room for negotiation on this. The running fee is what we charge the customer to go to the registry. I've seen some customers do their own registering and negotiate this fee away. We're not happy about it but it's better than losing the sale. Call ahead and just ask "what are you dealer fees?" That way you'll know.
I could go on and on but I think this is a good place to start. Besides, my boss is about to walk in and if he sees this blog, I might be in trouble.
