In 2001, after trying a few vehicles, I emailed all the local Toyota dealers telling them what I wanted and asked for an itemized quote with a firm total cost. Many dealers wouldn’t play that game, but one that did gave me an excellent price. I went to the dealer, signed the paperwork, and drove away with my new vehicle.
In 2013 I used a broker recommended by a friend. I told him what options, colour, etc. I wanted and he emailed back a quote from a local dealer with a bottom-line price. The price was good, I said okay, and the car was delivered to my house with the papers for me to sign. I never saw either the broker or the dealership. The broker’s fee was $100.
I can recommend either of these methods. They put you in control, and save a ton of stress. More and more dealers are getting used to the idea and are happy to make the sale.
It’s all about who has the best information. Start by knowing the dealer cost, which you can get from online services, then use that to calculate how much of a markup the dealer is getting. Be aware of any special offers or rebates that may be in effect.
They are only there in black and white because an experience professional car buyer insisted on getting the itemized breakdown. Most car dealers will not show you that sheet until you have started signing paperwork unless you know specifically to ask it. Even if you ask, they will argue with you and try to convince you that you don’t need to see it, and they will deceive you about what the fees are and which ones you have to pay. And thanks to government sanctioned monopolies, many people have no choice where to buy a car.
That would be ideal, but a lot of the people who can’t afford to make those mistakes are in that situation because they don’t know how to avoid it. I prefer not to believe that if you don’t know how to stop someone from taking advantage of you that you deserve it.
If that is your standard for ethical and legal behavior, you should probably go live on a deserted island somewhere that you can be a rugged individualist. The fact is most people in most places in the US need a car in order to have a job, and a house over their head. And in many many places, there is only one car dealer. Each dealership has an exclusive franchise that prevents competition within some range, in many states it is illegal to sell new cars outside of a licensed franchise, and in many places one or two giant auto groups owns the dealerships for all major brands. The idea that the average buyer has control when buying a car is a fantasy.
Is that the same as replacement cost insurance? That’s offered by my insurance company for the first couple of years, and really isn’t very expensive. I’ve never heard of buying it from a car dealer.
I financed my car through my credit union, and I almost passed on adding the gap insurance the first time around. Boy am I glad I didn’t – 13 days later my new car was totaled (not my fault) but it was 100% paid off by the insurance. I did not hesitate to add the gap insurance to my replacement car’s financing.
Yes, and again, buy it through your auto insurance provider or credit union. You’ll pay a fraction of what the dealer will shake you down for.
GAP insurance means that if the car is totaled before the note is paid off on it, the owner isn’t on the hook for the rest of the loan. It is absolutely a good idea to buy it from your auto loan provider which should never under any circumstances be the dealership.
So you and the salesman finally agree on the price of your new vehicle and you think you are home free. WRONG! It’s when you go into that room to sign the papers that you are going to be anally violated and there is a reason why that person behind the desk is the highest paid salesman at the dealership.
I don’t normally enjoy the process, but eliminate the finance manager addon BS by telling the salesperson what I want to pay to drive it off the lot, with floor mats and all fees included. I make it very casually known that I’m ambivalent enough to walk if they don’t think the deal is worth the effort for the dealer. If you do you homework to know what an excellent but not insultingly low price is, are straight and to the point with the salesperson, and don’t seem obsessed with a particular car, it’s far less slimy. All that assumes that the car is not hot and in short supply. The balance of power shifts, in that case.
In the case I mentioned above, I had an email quote from the dealer, and when the car was delivered to my door, I had a certified cheque for exactly that amount ready to hand over. I was prepared to send the delivery guy away if the bottom line price was any higher, but there were no issues.
