OUR VERY OWN MYTH BUSTER-STEVE BURT
1. Myth: I just want to pay cash, I’ll get a better deal.
NO! Cash is no different than finance or lease for a dealership; in fact the banks compensate the dealership for finding them loan customers, so it is more lucrative for the dealership to write a finance or lease deal instead of a cash deal. Most manufactures offer certain incentives for finance customers that are different from those of cash incentives. If you work out the overall cost over a certain time frame, you will usually find both to be very very similar.
2. Myth: I can get a better interest rate at my bank!
Probably not. Simply due to the large amount of customers that use a dealership for financing; they have a preferred rate ( lower than most any bank will offer you on a vehicle loan). Manufactures make deals with the banks to buy lower rates on certain vehicles. A dealership will not charge you any penalty for paying your loan out early, however a bank generally will. The dealership makes its money selling you a car, the bank makes money by you paying interest, they want you to go full term.
Some people will think using their line of credit is a good thing to use due to low interest rates; This is a little bit of personal thought but, BAD idea!
3. Myth: Can’t you just give me your best cash price.
Every salesperson has heard this at least 10 times by the time he has been in the business for his / her first 2 months. You will not walk into a dealership and get “the best price” until the salesperson has taken the sales process to a certain point. A sales person is not there to waste his time or yours, want the best price; let the salesperson help you find the right vehicle and be ready to buy it. A buyer is given the final price, a shopper is given an idea of what the price is. This may very well be the same in the end
depending on costs. There is more than just one person involved in this process and takes more time than just spouting out a number.
4. Myth: This offer is good for today only!
Probably not! Never feel like you are being pressured into making a decision right now. Be sure to take the time and make a decision that is right for you. The manufacture gives incentives that do change ( usually every month ). If the incentives change before you sign a deal you may not get the same deal. Most times the incentives are very very close; you may lose in one area but gain in another. If a promotion is ending and you think it might be the right vehicle for you, but want to think about it for the night or talk to a spouse, that’s ok. You will just need to talk with one of the dealership managers and sign the deal. This will secure the deal you have, they can’t take it away from you, however it still give you the ability to change your mind. ** Please note, the dealership cannot guarantee the interest rate at which a bank is lending money, but they can guarantee the price they gave you, that you signed off on in the deal.
5. Myth: The dealership will keep your deposit.
No we are not! It is against the rules of AMVIC for a dealership to keep your deposit. They can keep a part of or all of it if they have incurred expenses though. For example: if a dealership brings a vehicle in for you and have paid people to go get it and you decide to change your mind, the dealership can keep the portion of your deposit that will cover those expenses. This could hold true for adding accessories to a vehicle as well.
6. Myth: You have to get your car serviced at the dealership you bought it at.
Simply put; no you dont. You are free to let any garage service your vehicle. If a problem ever exists with a warranty question, as long as you have access to service records you are good. You can even do your own oil changes if you like; just keep the receipts for the oil and filters you use and keep track of the kilometers each time.
7. Myth: I’ve bought lots of cars before, I know how to negotiate a better deal.
A dealership negotiates thousands of deals each year, no matter how experienced you are, the dealership has more insight and experience than you do. Even if you have bought 20 – 30 cars in your lifetime, the average sales person has more experience than you in 2 – 3 months of sales. You can save a lot of time with just being open and upfront on what you want and your expectations. This is I’m sure is what you are hoping the salesperson will do.
8. Myth: I will get a better deal if I bring my trade in at the end of negotiations.
Most dealerships today will deal with what is called “Actual cash value” meaning no matter what vehicle you are looking at and whether you are buying a vehicle or not, that is your trade value. In saying that there is no point in wasting your time or the salesperson time to have to go back and re-work the numbers. Keep in mind that if one dealership is offering you more than all the other dealerships, they are probably playing with the numbers; want to call their bluff to see if they are giving you the real trade value? Ask them to write you a check right then and there for that trade amount. If they say no, they were probably not being honest with you.
9. Myth: Dealerships are making buckets of money selling me a vehicle.
The average profit on a used vehicle is $1,934 on a new vehicle the average profit is $2,400. Yes the dealership will be making money when they sell a vehicle. Most people do not realize the cost involved in inspecting a vehicle, cleaning it for the lot and again when it is purchased, paying a salesperson as well as all the other hands a vehicle touches to get ready for delivery day, fueling it, registering and insuring it and fixing all the mechanical issues that may come up in the inspection. The average cost to recondition a vehicle is $2,100.
10. Myth: Salespeople are just waiting to attack me when I drive into the lot.
Wrong! The majority of a salesperson’s day involves computer work and phone calls. They put in long hours and are more lucrative to be on the phone than walking the lot for the odd person that will actually stop instead of speeding up past them. The industry average says that a salesperson will sell to 23% of people they deal with. That means for them to sell between 10- 20 units a month they are already dealing with between 46 – 86 other people.
11. Myth: Sales people just want to sell me a car they will make lots of money on.
Not true. A salesperson job is not only sales, its a consultant as well. They may, based on investigation they have done while talking with you have suggestions. That’s all they are, just a suggestion. They want to get you into a vehicle you really want; this will lead to you remembering them and be back to deal with them again on your next one or even receive a referral from you to one of their friends and family. They want this sale to result in others; therefore getting you what you really want is in their best interest.
* Interesting fact 80% of people end up buying a different vehicle than what they initially came in to look at.