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Thread: Avoid getting taken for a ride by the dealer

  1. #1
    Vulture of The Western World Eric's Avatar
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    Avoid getting taken for a ride by the dealer

    Avoid getting taken for a ride by the dealer
    By Eric Peters
    for immediate release

    While it may take years spent in quiet contemplation on the top of an isolated mountain top to become a Zen master, acquiring the wisdom to cut yourself a good deal the next time you go car shopping is mostly a matter of forethought -- and a little common sense:

    * Avoid six year loans. These have become popular tools to get people into cars they might not otherwise be able to afford by lowering the monthly payment. However, stretching out the payments does not make the car more affordable in reality. The principal balance remains the same -- and when add the interest/financing costs (and the depreciation in value over time of the car), people taking out six year loans often end up "upside down" -- owing substantially more on the loan than the car is worth. If you can't afford a car without buying into a six year loan, buy a less expensive car.

    * Never talk monthly payment. Some people make the mistake of going into a dealership and telling the salesman they want to pay no more than x" dollars per month -- and the salesman is only too happy to oblige (see above). By focusing on the small picture (the monthly payment) you can easily lose track of the big picture (the total sale price plus finance charges). Don't put the cart before the horse. Focus on getting the best price for the car (and the lowest possible financing) first; worry about how much that works out to per month second.

    * Shop financing before you shop for the car. Even a great deal on a new car can be ruined if you buy into less-than-great financing. Before you start shopping for the car, you should look into how you'll pay for it. Many people have access to credit unions, which can offer more attractive rates than banks or the automakers' captive finance arms (GMAC, Ford Motor Credit, etc.). Never, ever go see the finance guy at the dealer without having looked into your options beforehand. Many people don't realize it, but you can haggle the financing just as you haggle the price of the car itself. Show the dealer's finance guy what your credit union (or bank) is offering and see if he'll beat it. If not, go with your best offer. A few calls now can save you a lot of grief later on.

    * Get an insurance quote -- before you commit to buy. This is another area where unforeseen "peripheral costs" can turn around and bite you. It can cost a great deal more to insure a high-performance sports car or expensive luxury sedan than an ordinary family-type car -- especially if you have a ticket or two on your driving record. And in every case, it will add to the bottom line if you're trading in an eight-year-old beater for a brand-new anything. Since insurance costs can be as high as $1,000 annually or more, it's important that you factor these outlays into the total cost of ownership before you commit to buying. Ditto annual fuel bills. Take the EPA estimates you find on the car's window sticker and fold that into your calculations as well. If the combined monthly outlay exceeds your comfort level, you'd be wise to look into a less expensive model.

    * Look into depreciation rates. If you plan to sell or trade your new car down the road, how well it holds its value should be an important consideration taken into account before you buy the thing in the first place. Some makes/models are absolute disasters -- losing half their original value in three or four years. Some do much better (the industry average is roughly 20 percent annually). If you plan on driving it until the wheels fall off, higher-than-average depreciation won't matter much (and you can actually score a great deal on such a car new or slightly used, for that very reason). But if you want the car to have decent trade-in value five or six years from now, it will matter a great deal indeed. Researching online and consulting used car pricing guides will give you a very good idea about which brands (and individual models) tend to hold their value well. Or not so well.

    * Know your trade-in. Don't just focus on getting the best possible price on your next new car; be equally sure you know the fair market value of your current car -- so that you don't get taken on the trade-in. Consult used car pricing guides (National Automobile Dealers Association, Kelly Blue Book, etc.) to find out the retail/wholesale price range for your vehicle. You want to get as close to the retail value (and as far from wholesale) as possible. It's also a smart move to thoroughly clean the car up, inside and out -- to make it as presentable as possible. Bringing a dirty, sad-looking trade only gives the dealer ammunition to nitpick it to death -- and throw a lowball offer your way.

    * Take it for a real test drive. Not just a quickie around the block -- as many people make the mistake of doing. A short drive will not tell you how the seat will feel after a couple of hours on the road. And you won't know the car has inadequate power for safe merging/passing unless you take the time to do some freeway driving. Family members who will be spending time in the car should also get the chance to try the car out with you. Otherwise, you'll be living with their complaints (and maybe a sore backside if the seats turn out to be too hard) for the next several years. Insist on an at least an afternoon's test drive before you buy. Most dealers will accommodate this entirely reasonable request. If not, better to walk away and try someplace else. Otherwise, you're buying a pig in a poke.






    END


  2. #2
    Senior Member Kwozzie1's Avatar
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    Re: Avoid getting taken for a ride by the dealer

    All points taken Eric....haven't test driven a car for a while so the Holden ride will be interesting.
    Rex
    On the Sunshine Coast, in the Sunshine State Queensland (QLD), Australia

  3. #3
    Vulture of The Western World Eric's Avatar
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    Re: Avoid getting taken for a ride by the dealer

    Let us know if you do the deed and buy that thing!

  4. #4
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    Re: Avoid getting taken for a ride by the dealer

    I feel I was really taken by Freeway Ford, 96th and Lyndale, in Minneapolis.

    Last year, I bought my daughter a used 2005 Tarus, with 18,000 miles. It's a good car for a college student.

    At 40,000 miles the check engine light came on. She took it to an authorized dealer. After 2 days in the shop, and three phone calls they decided the problem was a bad gas cap! Which I can understand. However, I would assume that this would be at the top of the decision tree, not the bottom.

    Bottom line is that I paid just about $300 for a new gas cap. Has anyone else had a similar experience? Do you think I could get a $200 back?? I thought these guy's were professionals!

  5. #5
    Vulture of The Western World Eric's Avatar
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    Re: Avoid getting taken for a ride by the dealer


    Bottom line is that I paid just about $300 for a new gas cap. Has anyone else had a similar experience? Do you think I could get a $200 back?? I thought these guy's were professionals!

    This is apparently a growing issue on "closed system" cars (the fuel cap is an integral part of the vapor recovery system and if there's a leak it can trigger the "check engine" flag).

    I think whatit comes down to is the expansive list of possible problems on a modern car; there are so many things that "could" be wrong it takes a well-trained/skilled person to nail it on the first (or third!) try.

    And Iknow it's getting harder to attract and retain these skilled techs - because the training/work involved is such that one might as well move out of the grease pit and go to engineering school instead - and get to wear a white shirt and make more money!

  6. #6
    DonTom
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    Re: Avoid getting taken for a ride by the dealer

    "Look into depreciation rates. "

    That is somethat I have never done and never will. I drive all cars until they are so junky that they would not be worth a cent and then they get junked. I buy cars with this in mind.

    I am the same way with motorcycles.

    But my 1971 R-75/5 BMW motorcycle (I purchased new in 1971 for $1,875.00) still has not yet turned into junk.

    My 1984 Yamaha Venture is still doing well too.

    -Don- (in San Francisco)

  7. #7
    Vulture of The Western World Eric's Avatar
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    Re: Avoid getting taken for a ride by the dealer

    Quote Originally Posted by DonTom
    "Look into depreciation rates. "

    That is somethat I have never done and never will. I drive all cars until they are so junky that they would not be worth a cent and then they get junked. I buy cars with this in mind."

    Hi Don,

    In that case, you're right - depreciation rates are irrelevant! I'm prettty much of the same mind; I have never bought a new car (money waster) for myself and drive my vehicles until the wheels fall off. Now if Kaw does come out with a "Super ZRX," as is rumored for 2007, then I may have to go down to the dealer and get ready to squeal just like everyone else!

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