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Auto purchase secrets to outwit dealerships

by MIKE OCHONMA

July 12, 2018 | 8:03 am
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Auto purchase secrets to outwit dealerships

When buying a car at a dealership, driving away with a truly good deal means you have negotiated on more than just the sticker price. The biggest secret in the car industry today is that there are discounts that the buying public don’t know about. In some markets, car buying and leasing service helps buyers negotiate competitive deals by accessing insider discounts.

There are different ways dealerships can make a profit, while consumers can do few things to guarantee the best deal. At the very least, before you walk into a dealership, you need to do some research for the going rate of the car you want.

There’s no need to pay full price on the front end, or the sticker price, when it is never been easier to search for specific sales and incentives on both the dealership and automaker’s sites.

Once you know what you can expect to pay on the front end, don’t stop there. You don’t want to be blindsided by all the different products a dealership can spring on you.

The back end is where it gets tricky, but it is not to say that, these products are not good products, only that you just want to prevent getting ripped off and pay a fair price for them.

Whenever you’re looking to finance a car, it’s important to know what types of rates you qualify for as it helps to shop for your car loan before you go into a dealership, get a few free quotes online and keep this information in your back pocket. Once you are negotiating the contract, a salesman can bump up the financing rates for an additional profit.

Negotiate a deal below what the dealer paid. No matter how much research you’ve done, there are some deals consumers don’t have access to. Beyond the manufacturer’s suggested retail price (MSRP), you may know how much the dealer paid for the car, or dealer invoice.

But there are actually discounts beneath the MSRP and dealer invoice, called dealer holdback, which the amount is paid to the dealer by the manufacturer for every new car they sell. This incentive is provided for the dealership to make more sales, and customers do not necessarily have a right to this holdback.

Armed with all this knowledge, what is the pricing sweet spot? Typically, if you can negotiate a sale price that is 7 percent to 8percent below the MSRP, Jo says you’re probably under the dealer’s invoice cost.

A car buyer should not be in the showroom to strip away all the profits from the dealer, rather you are there to get a fair great deal, and for the dealer to make money is also a fair deal.

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by MIKE OCHONMA

July 12, 2018 | 8:03 am
  |     |     |   Start Conversation

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