Tony's Tips - Car Buying Scams

Dear Appreciated Friend,

Most of us love having a new car. Most of us also hate buying one. It’s expensive, a lot of work, and, even worse, we have to deal with car salespeople!! Experience has taught us that car dealers harass us, lie to us, pull scams, and make the whole transaction unforgettably miserable. Of course, there are reputable car salespeople out there; however, most (including the dealership owners) seem to be trying to remove as much money from our wallets as they can by tricks and schemes. Below is some information to alert you to potential scams and provide you with ways to ensure that you are getting the best deal possible. You are in charge!

Beware:

  1. Ads that claim, “0% interest, no money down, low monthly payments.” Maybe. Sometimes this claim is for cars that were just sold as soon as you walk in the dealership or it’s for the MSRP/sticker price (which you should never pay!). Sometimes this applies only to people with credit scores over 700. Know yours before you go car shopping.
  2. Good credit. Yes, even if you have good credit, be on the alert for add-ons that you don’t need nor want. If you have great credit, this may mean that the salesperson will try to sell you additional add-ons because the bank is more flexible with auto-loans for those with high credit scores. In the same way, banks will be tighter lending to you if your score is under 600. Do you really need/want these add-ons? Will they add to the resale value of your vehicle? Probably not much considering how much they’ll cost you initially.
  3. 3. “If you finance through us I can give you a lower price.” Maybe. Or he’ll jack up the interest rate slightly, or make an “error” on your monthly payments or length of time for these payments; or tell you that you have to purchase an extended warrantee and credit life insurance.
  4. Extended Warrantees. You don’t need them and the car dealer can’t make you buy them – even if your credit isn’t that great. If you doubt this, do some research on the internet first. Get a free online warranty quote before you go to a car dealer to compare, not after. The car dealers get their extended warrantees from warrantee brokers and jack up the price. Yes, that’s for Fords, Hondas and BMWs too, although they’ll make it sound as if these extended warrantees come from the car manufacturer. They don’t. You can get your own warrantee from an extended warrantee administrator/broker without the extra costs if you decided you must have one. And, by all means, read the extended warrantee completely. Does it cover both “wear and tear” as well as “mechanical breakdown?” If you pay these expensive rates, you want bumper-to-bumper protection. Also, make sure the warrantee provider is financially sound. Even the best have gone out of business. Keep in mind, depending on what you buy, these extended warranty’s more often than not do end up paying for themselves the first trip back to the dealer. Keep in mind what you are buying is the amount of time or mileage beyond the factory warranty. If the factory warranty is 3 year or 36,000 miles, and your extended warranty covers 5 years or 100,000 – then you are paying for the difference only.
  5. Credit Life Insurance. Dealers may press you on the credit life insurance if you have a lower credit score. They say the bank requires it. They don’t. Credit life is not required on car loans. In fact, in some states it’s illegal. Don’t fall for this.
  6. “I won’t make any money on this; I’ve a wife and family to support, etc”. (So do you.) Or “The dealership will go broke if we agree to your terms. We just spent $xxxxxxx for this car in cash.” They didn’t. They have a loan from the factory and need to move the car as soon as possible.
     

Critical info when shopping for a car:

  1. Check your credit report and score before ever going to a car dealer. Know that if your credit score is above 680 you’ll get a low APR; if it’s below 680 you’ll get a higher one. Print it out and put this into a folder labeled “New Car Info” that you will later take with you to the car dealerships.
  2. Get pre-approved for a loan before you go car shopping. Get an on-line car loan quote to get the best APR. On-line car loan approvals take minutes. Look at auto financing sites such as Capital One Auto Finance or HSBC Auto Finance or others. Or go to your bank or credit union. Then compare these quotes with the dealer’s financing. Print this out and add it to your “New Car” folder too.
  3. Do your homework. Know the car you want before you go to the dealers. Use internet sites such as InvoiceDealers.com, Yahoo!Autos.com, CarsDirect.com, Edmunds.com, Autos.com, Cars.com, etc. These sites provide MSRP (Manufacturer’s Suggested Retail Price), dealer invoice cost, and any known factory- to-dealer incentives or factory-to-consumer invoices.
  4. Don’t pay more than $50 over invoice cost. The dealer needs to get rid of inventory and the salespeople get incentives besides whatever they make on the vehicle. It is a “buyers market” due to the economy dealers would rather make “something” verses “nothing.
  5. Never tell the dealer what you want to pay a month. This makes you a “payment buyer” and they’ll salivate. They can jack up the price or the APR. It’s none of their business. What you’re interested in is the cost and value of the car and what they can do for you. Besides, if you’ve done your homework, you’ll be prepared.
  6. Don’t pay in cash for a deposit on a car. Use only credit cards. If the deal goes south, you are better protected when using a credit card.
  7. Don’t finance at the dealership if you can avoid it. Credit unions are still the best value.
  8. Bring your new car research with you in a folder to the dealerships. You are prepared. They will hate this. Regarding “used” cars, you can buy the Kelley Blue book at local book stores, and you can carry it in your pocket to make sure you don’t pay over what the car is worth – this occurs quite frequent.
  9. Always be prepared to walk. If you feel you are being harassed or the salesperson keeps going back and forth to the sales manager or owner, and the transaction is taking more than a half-hour, then leave. You are in charge. You did your homework and came prepared. You knew what you were willing to spend. There is always another dealer who will sell you the car you want at the terms you want.
  10. Better yet, send faxes to various dealers. Tell them what you are looking for, the car and features you want, and how much you want to spend. Show them the research you have done, their costs, etc. None of their info is secret. It just takes a savvy shopper to know. Good luck!

For more information:

Some things to think about:

Where you stumble, there your treasure lies. – Joseph Campbell

Do not wait for leaders; do it alone, person to person. – Mother Teresa

We can do everything we want if we stick to it long enough. – Helen Keller

When I criticize someone, I overlook the possibility that God may be using his faults to correct mine. – H. A. Hartwick

Why should you refer your family and friends to Tony's Body Shop?

What we offer with every repair job:

  • Guaranteed color match
  • Accurate panel to panel alignment
  • Repairing the vehicle to a safe condition

Your 100% satisfaction is our goal.

At Tony's Body Shop you can still find service, a smile, and a sincere thank you if you allow us to service your auto body needs.

Please feel free to call us if we can be of help or guide you in any way.

This newsletter is brought to you by an independent who has to work harder to make your car repair decisions easier.

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