Sunday, 29 July 2012

How Car Salesmen Fool You!

What's Your Car Really Worth?


It's happened again! A friend of mine has just bought a new car and told me all about it: what a good price he got for his old car: how he was offered SO much more for it than at some other garages.  He thinks he got a really good deal...

WRONG!

I used to sell cars at a main dealership: I was trained in car sales and know how these things work.  I KNOW he has been "suckered".  He thinks he got a good deal because he has been fooled into thinking he got more for his old car.

It is natural mistake for a car buyer to make though: a car is the most expensive purchase we make in our lives (apart from our house) and we obviously want to lose as little money/value as possible.  So car dealers prey on that and often APPEAR offer you more for your car than it is really worth!  BUT you are not really getting that amount of money for your part exchange.

The clue is when the car salesman says to you "Does it really matter to you what price your car comes in at, on paper?"  What has happened is that you have agreed to a deal, thinking you got loads for your old car and this is the bit where they want to show a more realistic price on the sales invoice.

How does this work?

There is, potentially, a lot of profit in a dealer selling you a car - both new and used cars.  It depends on how good you are at negotiating as to how much of that potential profit they have to give up to entice you to buy the car.  Given the chance, they will make the maximum possible profit from every sale they make... and that includes YOU!

However, they often give up some of that profit to make it look like they are giving you more for your part exchange.  This makes you feel good about doing a deal with them.

So what's wrong with that?

Nothing... much... it's just that you won't be getting THAT much for your car but, if you think you are, then it effectively stops you going elsewhere - and you may well have got a better deal at some other garage!
What is your car REALLY worth?  What price you you REALLY get for your part exchange?
Trade price.  That's it!  That is all you get.  If you don't believe me see how to value your car

If it sounds like you are getting more than that, they will simply increase the price of their car (or give you much less discount than you could otherwise have got) so that it all balances out.  HOWEVER if that makes you think you are getting more for your old car you are much more likely to buy from them.  They have got you!

Then, when you get to sign the order you see that "on paper" your car is shown at less money and they will say that this is just "to keep the accountants happy" or some other tale like that.  This lower price, that is shown on the order form, is more likely to be the real price you are getting ie. the Trade price.  You would have got that amount anywhere but you have had the wool pulled over your eyes: you have been "suckered".

The thing is, when you trade in your car, there are 3 things that you consider:-
  • How much they want for their car.
  • How much they will give you for your part exchange.
  • The difference between these two amounts.
How you pay this difference is up to you but if you choose to use the dealer's finance this is another area where you can get taken in by other tactics - see bad car finance

The vital thing is that the price they are asking for their car is far more than they would actually take if they were really pushed - and I mean REALLY pushed.  They want to sell you that car but they will always try to make the maximum profit possible from every deal. It takes a great deal of pushing to get them to budge.

However, if they think they can get you to sign an order, they will use all kinds of tactics on you.

Most people know that the "balance to change" figure is all important but people are so often fooled by high offer prices for their part exchange or offers of really low interest rates on finance, or even 0% finance (which, incidentally, does not exist!  No... really... zero percent finance is impossible see - zero percent finance) that they can fall victim to these manipulative tactics.

Everyone, especially us blokes, think they can cut a good deal when buying a car.

But, really - we buy a car once every year, two years or three years.  Car dealers are selling cars every day, several times a day.  Who do you think are better/more experienced at doing deals?  Who do you think comes off worst?  Clue... YOU!

It's so sad.  So many of my friends, and family, have been victims of car salesmans' tactics and have bought a car thinking they did really well - when, really the salesmen are sitting in the pub that night laughing about how much profit they made out of them.

They could all have done so much better with a little more knowledge of how car sales really works.

Understand car sales tactics and learn how to out-tactic the dealers - Car Buying Guide

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