6 Things Never to Tell a Car Salesman - Debunked
CNNMoney.com recently published a story on 6 things you should never tell a car salesman. Like many stories written to scare consumers and garner views, it inflames sensibilities, promotes fear and suspicion, and assumes that consumers are ignorant of the car buying process.
So in an effort to debunk the “six things you least want to say when you’re shopping for a car,” I’ve set out each of these suggestions with my rebuttal.
1. Never tell the salesperson: “I love, love, love this car.” According to CNNMoney.com that would end up costing you more because “cars you’re not in love with are usually a lot cheaper.”
Now on to reality, auto dealers today are actually selling new cars with virtually no mark-up at all. The vehicle itself has 6-8% mark-up and invoice prices are readily available online; so whether you love it or hate it - pricing information is readily available.
My advice - love it or don’t buy it. Since you’re going to own it for 3-5 years you would be much happier making the payment and less likely to try dumping it early (thereby costing you money in terms of negative equity). Simply inform yourself before you go car shopping and when you find the vehicle you love, take one day at home to think it over. This is the best way to avoid making a rushed decision.
2. Never tell the salesperson, “I need to get a car by tomorrow.” According to CNNMoney.com the only thing “worse than being in love, it’s being in desperate need.” Their advice, “even if you really do need a car quickly, act like you have a month to decide.”
Tactics like that will put you in car shopping Hell. If a salesperson actually believes that you are shopping a month out they will not take you seriously and will not put the time or effort into your transaction. You’ll be left with half-hearted answers and he/she will avoid serious discussions of pricing, options, inventory availability, etc.
The car buying cycle is typically 60-90 days long. The first 58-88 days are spent by consumers researching (mostly online and asking friends/family for advice). Once a consumer has decided on the brand and model that best suits their needs, going to the dealership to purchase begins a 2-3 day process. Salespeople know this process and are focused on those consumers who are buying now - not supposedly in the future.
Now if a salesperson doesn’t believe you ploy - that too will hurt your cause. How can they trust you and have an honest transaction if you’ve engaged in dishonesty. Put yourself in the salesperson’s shoes. Here you are working on commission and your “client” won’t even be honest about the needed delivery date. How much effort would you put forth??
My advice: be honest. And hold the dealer to the same standard. Needing a car now changes what a salesperson will offer you. For instance, if you need a car in the future, any rebates you see are subject to change. Same with interest rates, discounts, and inventory availability. On the flip side, needing a car in the future may allow you to order your vehicle from the factory thereby getting any specific color or equipment package you need. Delivery times matter - for you and the dealer.
3. Never tell the salesperson “I need a monthly payment of …” according to CNNMoney.com because as they say “most of us have no idea how much car we can afford except by looking at how much it would cost us each month.”
Really?
I don’t subscribe to the notion that consumers are stupid. A car payment is simple math. And with finance calculators adorning almost every car buying site a consumer is hard pressed to avoid knowing how much the payment on a vehicle should be.
My advice: you should know what your budget is before you go car shopping - in terms of monthly payments so you can decide how much car you should buy, what finance terms will be acceptable, and whether you will be able to afford the vehicle. Hiding this information will again hinder the salesperson’s ability to show you options that may fit your needs.
4. Never tell the salesperson, “my trade-in’s outside.” According to CNNMoney.com you should never give up your keys since the dealer will hold them hostage to negotiate longer. They state, “guess what’s going to happen if you reach an impasse in the negotiations and decide it’s time to leave. You’ll h ave to ask for your car keys back. And, odds are good, they will have been misplaced.”
Insulting. For both the dealer and the consumer.
First off, the Sales manager and Salesperson saw you drive up to the dealership. Those large windows in the show room are for seeing in as well as out. And if you hang out in a dealership for even an hour, you’ll hear the Sales manager ask a Salesperson, “who is taking car of the person in the _________ (car)?” They see. They are looking. And they assume that you are trading.
So back to lying. Why is it that supposed consumer sites recommend that consumers lie?
As far as helping your car buying experience, understand that buying a car has 3 parts: (1) the car you want to buy, (2) your trade, and (3) the financing. It is not to your advantage to make a decision until you have all the facts on all 3 aspects of the transaction. For example, one dealer may offer a larger discount on the new car but may offer less for the trade. A second dealer may offer more for your trade, but may have a higher interest rate. You need all three pieces of information to make a decision. And if you have a trade, the best advice I can give is to put the trade and the new car together. Ask the dealer one simple question, “How much for the new car including my trade?” That will eliminate the games that can be played and will allow you to quickly compare one dealer’s offer to another.
So remember, it’s to your benefit to tell them that your trade is outside.
5. Never tell the salesperson, “I don’t know anything about leasing.” According to CNNMoney.com “there’s a good chance someone will try to sell you on the idea. And they might be right. It could be a good choice for you. But it probably isn’t.”
This one takes the cake.
The advice should be - learn about leasing so you can make an informed decision, that way you never have to feel like you don’t understand.
Secondly, the statement that leasing probably isn’t for you, is also silly. For consumers with good credit who drive fewer than 20,000 miles a year - leasing is the golden opportunity: it cuts your payment by 1/3, reduces the amount of sales taxes you pay, requires no money up front, and best of all, protects you from the used car market - meaning that you have no risk of trading in your vehicle. And if you need a good illustration for the risks regarding trading, ask someone who’s try to trade in an SUV right now if they wished that they had leased so they could just walk away.
My advice, learn about leasing before you go car shopping. It is a better way to finance a vehicle for short term buyers - which most people are.
6. You should not tell the salesperson, “My credit’s a little spotty.” According to CNNMoney.com, “many people underestimate their own credit rating - and they’re the people who are big moneymakers for car dealers.”
There’s a big difference between “my credit is a little spotty” and “my credit stinks.” Whatever your credit situation, you should first pull a credit report 30-60 days before you go car shopping to make sure that everything on your report is accurate. This will give you some time to fix any items that are inaccurate. Afterwards, considering your choice of funds is essential. Will you be using a home equity line? A loan from an Uncle or Credit Union? How about your brokerage account? Whatever the source, first establish where you can get a loan without using the dealer’s resources, then when shopping - have the dealer beat the offer you have.
Now if you have very challenging credit - you will find it hard to impossible to secure a loan on your own. In that case, telling a dealer that you have issues is essential. Since only certain vehicles and loan parameters will work for sub-prime auto loans. If you follow the advice of CNNMoney.com, however, you might be left wondering why you cannot get the car you want - after all you kept your situation a secret like they suggested.
Overall, the key is not to be taken advantage of. And just because you are honest does not mean that you are weak or have to agree with any terms that are offered to you. Better to be honest and receive terms that apply to your situation.
Click below to read the full article from CNNMoney.com or feel free to post your comments.
http://money.cnn.com/2008/07/02/autos/dont_tell_salesman/index.htm?postversion=2008070216
