Car shopping sites, print publications and well-meaning family members are popular sources of car buying information. Unfortunately, quantity does not equal quality and not all the information is helpful or even factual. Here we debunk five common car buying myths.
- It’s best to Buy on a Rainy Day. This common myth is rooted in the idea that dealerships are empty on rainy days and salespeople are desperate to meet daily sales quotas. There are a few reasons why this isn’t the case. This widely held myth has helped boost traffic on rainy days, so dealerships are equally busy on rainy and sunny days. Also, salespeople are not so concerned with their day-to-day numbers: they are evaluated on monthly and annual performance.
- There is a winner and loser in each transaction. While there are unscrupulous sales people in every industry, dealerships want you to leave happy. They win when they can sell a car for a fair price and in the process create a happy, loyal customer. The long-term value of the relationship is worth far more to the dealership than a few extra dollars on any one transaction.
- There is a ‘gotcha’ strategy that you can use to trick the dealer. Surprising the dealer at the last minute with your trade in, quoting a low price offered by a mysterious ‘other dealership’ and similar strategies are tactics the salesperson has experienced before. At the end of the day, the dealership needs to make a profit and there is a limit to their discounting, regardless of your tactic. Also, dishonest tactics create a me-against-them mentality, do you want your new car purchase to be confrontational?
- Cash in hand will get you the best possible prices. While showing-up with your own source of funds to purchase the car shows you’re serious and eliminates the credit-check step from the buying process, this method will not guarantee the best price. Sometimes the dealership receives compensation from the bank it they originate a new loan. Take time to understand if the dealership has any preference for a cash/finance transaction and use this knowledge to help you get the best price.
- Extended Warranties drive profit for the dealership. Considering the impact of the warranty sale on the dealers profit isn’t the right way to decide if a warranty is right for you. Re-shape your thinking and look at what the warranty offers. Most new cars come standard with a good warranty, look at how long that warranty lasts and what’s covered. Can you afford the cost a major surprise repair not covered by the warranty? Think of the extended warranty as peace of mind protection against unexpected repair costs. Weight the benefits against the cost and decide accordingly.
Hopefully the above points have helped you see through these common myths. Now go use your newfound knowledge to put yourself into your next vehicle.