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Tuesday, November 14, 2006

How To Get Car Dealers To Beg For Your Business

If you're shopping for a new car, don't waste your time visiting car lots unless you want to test drive a car. If you'd really like to get a feel for the car you want to purchase, consider renting the car of your choice for a fews days to see if you really like it. That way, you can avoid visiting a dealer's lot until the day you decide to make a purchase. In this article, you'll learn how to shop for a car from the comfort of your home or office by phone, fax or e-mail without putting up with any hassles, mind games or pressure. To get a great deal, you only need to engage dealers in a competitive bidding process for your business. Once you've decided on the make and model of a car or truck, you can start the bidding process. You don't have to know the exact factory options on your choosen vehicle right away. However, always conduct the bidding process by phone, fax, or e-mail. Never try to deal in person to avoid dealing with a salesman. If you deal with a salesman, the dealership will have to pay him or her a commission and the dealer won't take your seriously. When calling a dealership, ask for the fleet manager or the sales manager. Dealing with a fleet manager is prefered since a fleet manager 's commissions are based on sales volume instead of the gross profit per vehicle sold. However, some dealers don't have fleet managers and you'll have to deal with the sales manager. To find a list of dealers near you , you need only go to the car manufacturer's website for a list of dealers in your state or nearby states. To find a manufacturers 's website, just type www.and the name of the maker plus .Com. For a GM car or truck, it would be www.GM.com We recommend you get bids from at least 10 dealers. You should get each dealer to bid any amount above or below the factory invoice price. The factory invoice price is the same for all dealers in the same region. So if one dealer bids $500 above invoice and the second bids $500 under invoice, you'll know the second dealer is $1,000 lower in price than the first. Using this method, you don't have to decide the exact options you want until the bidding is complete. To get factory invoice pricing on new vehicles, , visit www.Edmunds.Com or www.KBB.Com However, you don't really need the factory invoice information in advance. Just inform each dealer you speak with that you expect to be shown the actual factory invoice on any car you are considering. Here is what you should say when speaking with a fleet or a sales manager: "I'm in the market for ( make & model of vehicle) and I've made a list of several dealers to call. I'm done my research and I know the approximate invoice cost of the car. Right now, I'm calling each dealer on my list to find out what each wants as a markup or markdown from factory invoice. I expect to take my pick of any car on your lot within my model range. To be fair to all the dealers, I'm only calling each dealer once, and I won't reveal what any other dealer is bidding." "To make sure everyone is bidding on the same basis, I need to know all the extra charges that may show up on your factory invoice. Does your invoice show a dealer advertising association fee? If so, how much is it? Are there dealer prep charges, port charges, or any other charges? To do business with me, you'll have to show me the factory invoice for any new vehicle I choose to buy on your lot. " Plus if there is any factory-to-customer rebate on the car, I expect you to not figure it in your bid and subtract the rebate as a furthur discount on the bid. "Also, before we discuss any mark up or mark down from the factory invoice, you must inform me about any document fees or other charges that are not listed on the factory invoice. Will I be required to pay for dealer add-ons like rustproofing, pinstripes, wheel locks or other items that I don't want? "Are there any important options I might want that you may have to install because they are not installed at the factory and are not listed on the factory invoice?" For some foreign makes, options like air-conditioning are dealer installed. Ask the dealer for his charge to install these items. Then say: "I think that's about it. So what is the best markup or markdown from factory invoice if I buy the vehicle in the next 30 days?" Once you collected all your competing bids by phone, make the lowest bidders confirm their offers in writing via e-mail or by fax. After you get your best offers in writing, and there are some things you don't understand, or if answers to your questions are unclear, ask again. Remember, it's your money! If there are dealers who won't cooperate and give you a phone bid, tell them if they don't bid, they will have no chance at your business. Do not fall for any excuses why the dealer can't give you a price by phone. Don't give in one inch on this requirement. Keep in mind that some dealers will be able to sell you a car several thousand dollars well below the factory invoice. This is possible because the dealer often gets "holdbacks" or "factory kick backs" or "end of year carry over allowances" that don't show up on a factory invoice. He may pass them on to you. Once in a blue moon a dealer won't live up to the bid he or she gave you. So if this happens, then refuse to do business with that dealer and move on to the next lowest bidding dealer. Also, keep in mind that you are better off not to limit dealer bids to specific options or colors. Factory installed options will have the same invoice price regardless of the dealer you choose. This approach allows all dealers to bid even if they don't have a car with a specific option you requested but may not be important to you. Once you have your bids, you can call the lowest bidders to see what options and colors are available on their lots. When asking for bids, tell all the dealers you don't need financing and you don't have a trade-in. If you need financing or want to trade a car in, mention these issues only after you get your lowest bid on the car with the color and options you want . Mentioning financing and trade-ins before you get your final bids will only confuse the process. These issues should only be brought up when you physically go to the dealership to inspect the car. Then financing and trade-ins can be brought up at that time. Just make sure you check your financing options in advance by shopping local banks in your area. Currently, the time of year you request bids does not matter except when the new model year is being introduced and dealers must get rid of leftovers quick. If sales are up for your particular car or truck, you may not get favorable bids. However, if you're not in a hurry, you can wait a month and and start a new bid process. If you're offered an extended service contract, you can shop that too. For instance, you can buy a Honda from one dealer, buy a Honda backed extended service contract from another Honda dealer and take your car for factory service to another Honda dealer. For instance, one dealer may offer you an extended service contract at $400 while the same contract at another dealer might be $1200. So when considering extended service contracts, shop around. When it comes to dealer add ons like rustproofing, paint sealent , pinstripping ,and fabric protection, dealers pay only about $50 per car for all these items. So if these items are on a car you may be considering, pay no more than $50 for these items. Other scam overcharges to watch out for are environmental fees, and advertising fees. Advertising and others fees are the dealer's responsibility. If you want to get a good idea on the wholesale true worth of your trade-in, visit several used cars lots that buy cars and ask them to make you an offer. If three lots offer you $1,000, and the dealer where you plan to buy your car offers you $1500, then you might want to trade it in. Edmounds and KBB can also give you a good idea what your trade-in is worth . You can also get used car values from www.Cars.com If you plan to lease a car, the purchase is a little more complex because it involves dealer financing. For help with leasing , visit www.LeaseCars4Less.Com , www.LowerMyLease.Com and www.LeaseCompare.com If you don't have the time or the desire to go through the phone bid process, Capital One Bank has set up a free website that will do the lowest bid car shopping for you. But keep in mind this free service is not available in all areas. Visit: www.DriveOne.Com If you're buying a used car from a private individual or a dealer, never make the purchase unless you get the VIN or "vehicle identification number" from the selling party. Then you can buy a www.Carfax.Com report that will tell you if the car was in a wreck, a flood or other seedy situations. If you plan on financing your car, watch our for dealer financing scams that involve a downpayment and 5% financing. One scan involves the salesman spreading out several documents on the desk and asking you to sign in serveral places. Never sign any blank documents unless you have time to read them completely. If you're too eager to sign the documents, you'll drive off the lot with a car and get a phone call from the dealer a week later saying that the financing didn't go through. Then the dealer may say you have to come up with a few more grand and the financing rate is 9%. The dealer may also lie and say your trade-in was sold to get you to agree to the higher financing rate. So don't sign any applications containing a writ of rescission and don't agree to take delivery of any vehicle until the dealer approves your loan. A better tactic is to get a loan pre-approved from a credit union or bank so the dealer can't play loan and interest rate games with you. Also, try to avoid zero interest rate deals, because only a few buyers qualify for these rates. If you pay some interest on these deals, you might end up owing way more than the vehicle is worth. To avoid this,refuse to sign any agreement that makes the sale contingent on financing and insist that the dealer arrange any financing while you wait. Also, make sure you do not sign any mandatory arbitration agreements. They are usually worded in the dealer's favor are are usually used by dishonest dealers who don't want to be sued. If the deal is contingent on your signing one of these documents, cancel the deal.

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