Behind the Wheel
Everyone has to get from point A to point B somehow, one of man's favorite machines does just that: the automobile. Anything pertaining or relating to cars in terms everyone can enjoy and understand, that's what you'll find here.
I've always called "pull outs" turnouts. Some signs on the mountain passes here (in Washington) say "Slow vehicle turnout ahead" as well.
OK, you’ve decided to buy a new or premium used car from a dealer. You’ve figured out the price and found a dealer you like. Then comes the surprises. All kinds of extra things they want to sell you. Things like an extended warranty, undercoating, paint protector, fancy wheels, upholstery protectant and many other things that run up the cost a lot more than you expected. Then there are hidden documentation costs, fees for local advertising, dealer prep, etc.
Just remember that many of these things you can actually see are legitimate but that you may or may not want them and that the car dealer is the most expensive place to buy them. As for invisible things like paperwork charges it is just an attempt to make extra profit for things they do anyway.
When speaking with a sales representative at a dealer, one possible method to quicken the dickering process is to tell the sales person right up front when you first speak to them is that you are negotiating the “Drive it away” price including everything. And this does not include your trade in, if any. That should be an entirely separate transaction. Same for financing if you qualify in the first place. This technique applies to both new and used cars bought from a dealer. And if you have one, NEVER give then the keys to your trade in until you have a deal on the car you are buying. Leave it parked out on the street if necessary.
A "Drive it away " price means that when you are negotiating the price, you only want to hear the bottom line figure including all their little extra fees they pad the invoice with. After all, the fee for local advertising and paperwork, etc., is already in the purchase price when you buy a toaster, so why not a car? You generally have to remind them you are dealing on a "Drive It Away" price basis many times during the negotiation process. Sometimes every fourth sentence. They will try to ignore you on this point. The last time I bought a car from a dealer I used this technique and it cut the time to make a deal in half and they only tried to sneak in one $50.00 paperwork charge. Generally, a drive it away price means a price including sales tax but not insurance and registration fees. Know the exact sales tax in your jurisdiction before you start out. Make sure the sales person understands your meaning on this before you spend much time with them and that all of the little fees, etc. are part of the price. They know what it means but will try to test you to see how much you really mean it.
In my experience, the ultimate drive it away price including sales tax and fees quite often comes close to their original asking price without taxes and other fees, for a given model that is already in stock. Also note it is easier to drive a bargain on a car, new or used, that they already have against a special order in the case of a new car. Also remember that they generally have more room to negotiate on a used car than a new one.
Then when they present the sales contract and there are extra fees for things like “Documentation”, something called D&H, administrative cost, advertising fees, etc., demand that these be removed as you told the sales guy up front that you wanted the “drive it away” price only. If they refuse, head for the door. Because these fees should be included in the price of the car and they are just ways to dig extra profit from you. If they claim something is a mandatory government fee, you might want to do a search in your area before starting to sho for a car to make sure what the mandatory fees are. Generally you have to pay these, regardless.
The same for “dealer preparation” fees on a new car. It is already included on the price sticker on a new car. The manufacturer already pays the dealer a fee to do this. Many try to get it out of you again. Make sure you don't pay it twice. And it should be in the price of a used car already.
And remember even though you and the sales rep may have come to a preliminary agreement that the contract is not official until you have signed it (and your cosigner if you are under age) as well as the dealer representative in charge and you have actually given them money, such as a deposit or down payment. And after that point they cannot add anything to the contract without making it void creating a new one. No matter what they say, they will not sue you if you feel you are getting a bad deal and walk out. The negative PR is too much for them to risk. Before signing the bottom line, when you are totally happy with the deal, sign nothing. Remember they do this every day and their job, no matter what they say, is to extract as much money from you as possible.
See http://www.edmunds.com/advice/strategies/articles/59651/article.html for more details.
About some of the extra stuff they try to sell you, these include:
Extended warranty. Remember the extended warranty is a very high profit item for a dealer, about 50%. The sales person can make as much from selling you that as selling the car. The commission is very high. The writer feels extended warranties are not worth is as almost everyone I know who has tried to make a claim ends up with the story that the fault was caused by “normal wear and tear”. However, if you feel you need the peace of mind an extended warranty brings, do an internet search for [“aftermarket” “extended warranty”] you will get tons of links to companies who will sell you an extended warranty for the same price the dealer pays for it. And you can generally buy one for up to several weeks after you buy the car.
Paint and Upholstery Protectant. These are often several hundred dollars each. They will ask you “Don’t you want to protect your investment?” Remember an investment is something you plan to sell for more than you paid for it. A car may be a necessity for many of us but it is not an investment. Ask them “Is the car such a piece of crap, that I need this?” Because really, the paint protectant is just a really good wax job. Any car detailer will do it for you for $99 or less. Or you can buy it at an auto parts store and a power buffer for about $50.00 in total. I have sometimes seen a funny name for it like “Xilinx” or other weird names. Never buy anything if you don’t know exactly what something means.
Upholstery protectant is just Scotch Guard. Something you can buy for $14.95 or less and put it on yourself in 5 minutes. Sometimes they will say that they already applied these and if you want the car, you have to pay for it. This is not true. They cannot remove it but remember that these are “throwaway items” to the dealer, to be tossed in anyway to clinch a deal. Just say that you never asked for these and they can either not charge you for these or they can get you another car where these have not yet been applied. You have power here because the sales person knows that if you leave the lot chances are that 80% you will never return. They want to do whatever it takes to sell you a car today.
Undercoating. In some climates undercoating may be a good idea. I suggest asking a mechanic, a body shop or even a tow truck driver if they think it is necessary in your climate. It may help a car last longer if you observe cars less than ten years old in your area that are rusty. While here in Southern California it is a waste of money in a place like Michigan it may help the car last longer. Having lived in Alberta, British Columbia and California, I have never had a car undercoated.
If you feel it is a good idea, there are tons of independent shops, many under the Ziebart name, that do undercoating and they charge a fraction what the dealers charge, from $199 and up. However, it is best if it is applied right after you buy the car as it does not stick as well if the car is dirty on the underside. If the undercoating is already on the car and your climate justifies it, offer them $199 for it, the same as an independent job. If your climate does not justify it, tell them that if they want to sell you a car, to eat the cost or get you another car without it.
Alarm systems. The same for an alarm. And car audio shop can install an alarm for you for a lot less. The dealer can remove their alarm if they already installed it. And remember the dealer alarm is likely the cheapest possible one anyway.
Special Wheels and Tires. I have seen new cars on the lot with fancy wheels and on the price sticker there is a charge like $1400 for them. The metal wheels may also be called “rims”. This is generally two to three times the price that an independent tire store will charge. If they are already on the car, tell them to remove them if they want to sell you the car. If they say they don’t have the factory wheels any more, tell them to take them off on another car. And if you do want fancy wheels, you can shop for them at your leisure at a later date.
The same goes for any other gadgets and geegaws they want to sell you. Navigation systems, DVD players or anything. The car dealer is always the very most expensive place to buy these things.
If the car is a popular new model they may also have "Market adjustment" or "Added dealer profit" marked on a sticker on the window. They can sometimes get away with this is they are back ordered on the model. This was a common practice when the PT Cruiser and VW New Beetle first came out. But if they have more than 2 or 3 of that model on the lot, either tell them an absolute no, or wait until that model is not quite as popular. Walk if they try to charge you for these. Unless you have tons of money and you really really want that hot new model.
That dealers are always the most expensive place to buy anything other than the car itself is often (but not always) true for financing and any sort of insurance products. At the minimum the dealer may match the rates for financing as a bank or credit union but they will seldom beat them. Because to get the 0% interest rate on a new car you generally have to pay the sticker price for the car and have great credit. Generally on a new car you have the choice of 0% or low rate financing or a rebate. Getting the rebate and not paying sticker price is generally the better deal. The big thing about dealer financing is that it is very convenient. Another column will be written on financing.
Do any of you have stories on how car dealers tried to sell you a ton of extra stuff?
Just remember that many of these things you can actually see are legitimate but that you may or may not want them and that the car dealer is the most expensive place to buy them. As for invisible things like paperwork charges it is just an attempt to make extra profit for things they do anyway.
When speaking with a sales representative at a dealer, one possible method to quicken the dickering process is to tell the sales person right up front when you first speak to them is that you are negotiating the “Drive it away” price including everything. And this does not include your trade in, if any. That should be an entirely separate transaction. Same for financing if you qualify in the first place. This technique applies to both new and used cars bought from a dealer. And if you have one, NEVER give then the keys to your trade in until you have a deal on the car you are buying. Leave it parked out on the street if necessary.
A "Drive it away " price means that when you are negotiating the price, you only want to hear the bottom line figure including all their little extra fees they pad the invoice with. After all, the fee for local advertising and paperwork, etc., is already in the purchase price when you buy a toaster, so why not a car? You generally have to remind them you are dealing on a "Drive It Away" price basis many times during the negotiation process. Sometimes every fourth sentence. They will try to ignore you on this point. The last time I bought a car from a dealer I used this technique and it cut the time to make a deal in half and they only tried to sneak in one $50.00 paperwork charge. Generally, a drive it away price means a price including sales tax but not insurance and registration fees. Know the exact sales tax in your jurisdiction before you start out. Make sure the sales person understands your meaning on this before you spend much time with them and that all of the little fees, etc. are part of the price. They know what it means but will try to test you to see how much you really mean it.
In my experience, the ultimate drive it away price including sales tax and fees quite often comes close to their original asking price without taxes and other fees, for a given model that is already in stock. Also note it is easier to drive a bargain on a car, new or used, that they already have against a special order in the case of a new car. Also remember that they generally have more room to negotiate on a used car than a new one.
Then when they present the sales contract and there are extra fees for things like “Documentation”, something called D&H, administrative cost, advertising fees, etc., demand that these be removed as you told the sales guy up front that you wanted the “drive it away” price only. If they refuse, head for the door. Because these fees should be included in the price of the car and they are just ways to dig extra profit from you. If they claim something is a mandatory government fee, you might want to do a search in your area before starting to sho for a car to make sure what the mandatory fees are. Generally you have to pay these, regardless.
The same for “dealer preparation” fees on a new car. It is already included on the price sticker on a new car. The manufacturer already pays the dealer a fee to do this. Many try to get it out of you again. Make sure you don't pay it twice. And it should be in the price of a used car already.
And remember even though you and the sales rep may have come to a preliminary agreement that the contract is not official until you have signed it (and your cosigner if you are under age) as well as the dealer representative in charge and you have actually given them money, such as a deposit or down payment. And after that point they cannot add anything to the contract without making it void creating a new one. No matter what they say, they will not sue you if you feel you are getting a bad deal and walk out. The negative PR is too much for them to risk. Before signing the bottom line, when you are totally happy with the deal, sign nothing. Remember they do this every day and their job, no matter what they say, is to extract as much money from you as possible.
See http://www.edmunds.com/advice/strategies/articles/59651/article.html for more details.
About some of the extra stuff they try to sell you, these include:
Extended warranty. Remember the extended warranty is a very high profit item for a dealer, about 50%. The sales person can make as much from selling you that as selling the car. The commission is very high. The writer feels extended warranties are not worth is as almost everyone I know who has tried to make a claim ends up with the story that the fault was caused by “normal wear and tear”. However, if you feel you need the peace of mind an extended warranty brings, do an internet search for [“aftermarket” “extended warranty”] you will get tons of links to companies who will sell you an extended warranty for the same price the dealer pays for it. And you can generally buy one for up to several weeks after you buy the car.
Paint and Upholstery Protectant. These are often several hundred dollars each. They will ask you “Don’t you want to protect your investment?” Remember an investment is something you plan to sell for more than you paid for it. A car may be a necessity for many of us but it is not an investment. Ask them “Is the car such a piece of crap, that I need this?” Because really, the paint protectant is just a really good wax job. Any car detailer will do it for you for $99 or less. Or you can buy it at an auto parts store and a power buffer for about $50.00 in total. I have sometimes seen a funny name for it like “Xilinx” or other weird names. Never buy anything if you don’t know exactly what something means.
Upholstery protectant is just Scotch Guard. Something you can buy for $14.95 or less and put it on yourself in 5 minutes. Sometimes they will say that they already applied these and if you want the car, you have to pay for it. This is not true. They cannot remove it but remember that these are “throwaway items” to the dealer, to be tossed in anyway to clinch a deal. Just say that you never asked for these and they can either not charge you for these or they can get you another car where these have not yet been applied. You have power here because the sales person knows that if you leave the lot chances are that 80% you will never return. They want to do whatever it takes to sell you a car today.
Undercoating. In some climates undercoating may be a good idea. I suggest asking a mechanic, a body shop or even a tow truck driver if they think it is necessary in your climate. It may help a car last longer if you observe cars less than ten years old in your area that are rusty. While here in Southern California it is a waste of money in a place like Michigan it may help the car last longer. Having lived in Alberta, British Columbia and California, I have never had a car undercoated.
If you feel it is a good idea, there are tons of independent shops, many under the Ziebart name, that do undercoating and they charge a fraction what the dealers charge, from $199 and up. However, it is best if it is applied right after you buy the car as it does not stick as well if the car is dirty on the underside. If the undercoating is already on the car and your climate justifies it, offer them $199 for it, the same as an independent job. If your climate does not justify it, tell them that if they want to sell you a car, to eat the cost or get you another car without it.
Alarm systems. The same for an alarm. And car audio shop can install an alarm for you for a lot less. The dealer can remove their alarm if they already installed it. And remember the dealer alarm is likely the cheapest possible one anyway.
Special Wheels and Tires. I have seen new cars on the lot with fancy wheels and on the price sticker there is a charge like $1400 for them. The metal wheels may also be called “rims”. This is generally two to three times the price that an independent tire store will charge. If they are already on the car, tell them to remove them if they want to sell you the car. If they say they don’t have the factory wheels any more, tell them to take them off on another car. And if you do want fancy wheels, you can shop for them at your leisure at a later date.
The same goes for any other gadgets and geegaws they want to sell you. Navigation systems, DVD players or anything. The car dealer is always the very most expensive place to buy these things.
If the car is a popular new model they may also have "Market adjustment" or "Added dealer profit" marked on a sticker on the window. They can sometimes get away with this is they are back ordered on the model. This was a common practice when the PT Cruiser and VW New Beetle first came out. But if they have more than 2 or 3 of that model on the lot, either tell them an absolute no, or wait until that model is not quite as popular. Walk if they try to charge you for these. Unless you have tons of money and you really really want that hot new model.
That dealers are always the most expensive place to buy anything other than the car itself is often (but not always) true for financing and any sort of insurance products. At the minimum the dealer may match the rates for financing as a bank or credit union but they will seldom beat them. Because to get the 0% interest rate on a new car you generally have to pay the sticker price for the car and have great credit. Generally on a new car you have the choice of 0% or low rate financing or a rebate. Getting the rebate and not paying sticker price is generally the better deal. The big thing about dealer financing is that it is very convenient. Another column will be written on financing.
Do any of you have stories on how car dealers tried to sell you a ton of extra stuff?
Chuckles's comment: I have actually seen these signs in Washington State driving from Grand Coulee to Seattle. Thanks for the reminder.