Category Archives: Automotive

Only Three Things Worth Buying in Finance

In a perfect world, a finance manager, business manager, or whatever title is given to the person in the back that prepares paperwork will be just that: the person that prepares paperwork.

In the real world, the finance manager is probably one of the best and most persistent salespersons the consumer will ever meet.

They aren’t necessarily bad people. Most are exceedingly friendly and professional, dressed to impress and possessing an easy way that puts people at ease. To a car dealership, the finance manager is the last and best chance the dealer has to make money on a vehicle sale.

There are dozens of methods that the finance manager can make money from you. The good part is that not all of the ways are bad and not all of the products that they will offer are rip offs. In most cases, though, some of the offerings are just not worth the money the consumer will pay.

Instead of going over the details of the different products and suites that aren’t really worth it, here is a short list of items that a consumer should really question and investigate before purchasing:

Undercoating, paint sealant, oil change plans, VIN etching, scotch guard, preowned vehicle leasing, personal vehicle insurance, and tires for life.

There are others that are somewhat legitimate like the ones listed above, and there are some that are downright scams, but we’re here to focus on the potentially good ones.

Dealerships such as Oklahoma City Ford Dealers and other honest dealers around the country offer a basic, short list of products that consumers should consider:

GAP INSURANCE

Some call it a scam, but most who have totaled a vehicle with a lien on it can attest to the wonders of Gap Insurance. In essence, it covers the “gap” between what a vehicle is worth and how much is owed when a car is totaled. For example, if someone totals their vehicle and the insurance company agrees to pay $7,000 while the driver still owes $11,000, gap insurance is designed to cover it. Without gap, the insurance company will be forced to leave the remaining $4,000 to be paid out of the customer’s pocket.

Usually ranging from $300-$700, it is a good investment for consumers who (1) finance vehicles without securing equity by putting a lot of money or trade equity down on the car, (2) drive more than 10k miles per year, and/or (3) purchase new vehicles, especially high dollar ones.

EXTENDED WARRANTIES

Not all warranties are created equal. A consumer who plans on keeping a vehicle beyond the factory warranty should strongly consider an extended one.

Research beforehand into some extended warranties available online for the vehicle you are considering. Know the cost, deductible, what is and isn’t covered, and whether a prorated balance is refundable if the vehicle is traded, sold, or totaled.

Armed with this knowledge, it should be easier to get a good deal on a good warranty, whether it’s the one that the finance manager offers or a separate one.

CREDIT LIFE AND DISABILITY

Most life insurance policies are designed to help with cost of living. Debt should not be paid through standard insurance.

In case of tragedy, having a credit life and disability plan will help to pay off the balance of a vehicle loan. There are few things worse after dealing with a tragedy than to find that the loved one also left major bills and debts behind.

Final Thoughts

Not all “bad” items are that bad. Some may fit into a consumer’s needs. Not all “good” finance items are good, either. The key is to do the research before getting caught off guard by a finance manager ready to spray a $20 can of Scotch Guard in your new or used car for an additional $179.

Car Safety Tips to Give

According to the 2000 census, more than 112 million people drive or carpool to work daily. That number is certainly much bigger today, 10 years later. With all these people on the road, drivers need to take every precaution to ensure they arrive safely at their destinations. Here are some tips to heed for safer car travels, whether it be to work, for leisure, or taking the kids to school.

Know Your Route

Before hitting the road, take the time to map out your route. Motor clubs provide auto travelers with maps and detailed directions to their destinations. Be aware of traffic, construction and weather advisories along your route so you can make alternate plans should these conditions affect your drive. A GPS can be a really smart purchase. Knowing exactly where you are going step by step allows you to pay more attention to your surroundings when driving in unfamiliar areas.

Reduce Driver Distractions

Traffic, construction and careless drivers are distractions beyond your control. However, you can reduce the risk of an accident by decreasing the distractions inside your vehicle. Don’t use your cell phone while driving and certainly don’t try to send or read text messages. If you have a GPS, don’t try to set it while driving- pull off the road to change any settings. It takes only a couple seconds of distraction to possibly end up in a terrible car accident.

Have an Emergency Kit

In addition to standards such as a first aid kit and battery jumper cables, consider adding a safety light to your vehicle emergency kit. A safety light serves a dual purpose: it shines like a flashlight and alerts like a flare. The light can be used as a bright spotlight or as a blinking safety light to warn oncoming traffic of a motorist’s presence. Also consider having a tire inflating gizmo. Can come in really handy if a tire has deflated, and you just need to get down the road to get it fixed properly.

Preventative Maintenance

Keeping your vehicle properly maintained is absolutely essential to have a safe handling car. Follow all the recommended service intervals found in your vehicle owner’s manual- always monitor hoses and belts, and check filters, spark plugs and fluids. Also, be sure tires are properly inflated and rotated, and the gas level is sufficient. Get on a good preventative maintenance program with your local auto repair shop to ensure your car is always safe to drive.

Car Buying Tips

Having car buyers at the dealership, at the negotiating table, excited about a vehicle and ready to make a purchase is the only time the dealership has a chance to really make some money. The best way they can do this is by making consumers focus on payments.

This is where the four-square worksheet and other tools like it come into play. Usually the four squares show their price, the value of the trade, the cash down, and the payment. Here is a normal method of presenting the deal:

The car salesperson walks in and puts the sheet in front of you, facing you. They point to each square as they go over the numbers.

“This is for ours… this is yours… with $3,000 down, your monthly payments would be $789 per month. Initial here and I’ll go get it cleaned up!”

Whoa, whoa, whoa! $789 per month? $3,000 down? What happened to zero down and $249 a month like the advertisement said?

And just like that, they have you. The last two numbers were so outrageous and spoken out loud. The first two we skimmed over and never spoken. You’re ready to leave, but before you can, the salesperson will identify the objection, which will usually be the payment and money down, and try to fix it.

After a few rounds of back and forth, they relent to $500 down and $279 per month, magically making the numbers acceptable for you. Still, at no time did they adjust the top numbers. They simply kept the customer focused on payment and cash down. They won.

The best way to prepare for car shopping and get the best deal is to focus on trade difference – the difference between their car and your car. You can also consider “total financed amount”, which is trade difference plus your trade-in’s payoff.

Follow these steps and you’ll avoid getting redirected in the direction the dealership wants you to look:

1) Determine your likely interest rate. Better yet, get pre-approved at your bank, credit union, or other lending institution. The dealership will probably be able to get a better rate, but knowing what the current rates are for your credit situation and for the kind of vehicles you are considering will help dramatically.

2) Determine your monthly budget, desired down payment (if any), and desired term. Find a loan calculator and plug in numbers until you know match your budget. If you know going in that a total finance amount of $15,000 with zero down will be $311 per month for 60 months at 8.9%, you will be able to find the car that fits your budget.

3) Get all the numbers you need ahead of time. If you know how much vehicles you are considering are selling for at local dealerships, and you know how much your trade is probably worth, and you know your exact payoff, you can determine what your target trade difference and amount financed will be.

4) Try to get your trade evaluated first. Many dealerships won’t do it, plus it won’t help you in negotiating (despite other articles that claim the contrary), but it will tell you how much vehicle you can consider at that car lot. Do not make the mistake of trying to find the dealership that offers the most for your trade up front. If your car is worth $5,000, some dealerships will say it is worth $4,000, while others may say it’s worth $8,000. In reality, they are all giving approximately the same, but you’ll find that the dealership giving $8,000 is probably $3k-$4k higher on the price of their vehicles. Again, focus on trade difference.

5) As rough as it is to go to multiple car dealers, it is a good idea. Gather trade differences on similar vehicles, then go back to the dealership with the best one. Then ask them to make it even better. They may or they may not, but it never hurts to ask.

6) Talk payments with the finance manager only, and only after the trade difference is acceptable. If you know that a $15,000 loan will be around $310 per month, there is no reason to argue it with a salesperson who comes with numbers showing the $15,000 loan at $370 per month. They want you to agree to leave a “cushion” for finance to sell you a warranty, bump your rate, or sell some other products. Again, if the trade difference is acceptable, worry about the rest of the numbers with the finance manager.

7) Be strong. Focus on the prize. Do not let anything or anyone distract you from the important number: trade difference. That is the only number you need to negotiate on the floor. Bring a copy of this article if you must, but make sure they know you know what they know. You know?

If you can find an honest car dealer that works strictly with trade difference, you’ll have a much more enjoyable experience.

It is an extremely competitive market, more so than ever before. The internet has made it increasingly difficult for car dealerships to make money.

Lease Vs Puchase On A New Car

There are several factors to consider before deciding whether to buy or lease a vehicle. Driving habits, buying habits, manufacturer incentives, and vehicle rates and depreciation are the primary factors, but there are others as well.

— Driving Habits —

This is the easiest qualifier. Every car finance company, whether it is the manufacturer’s division such as Ford Motor Credit, a specialty lender like Wells Fargo, or a personal bank or credit, has multiple lease and purchase programs available.

Determine your mileage habits, taking into consideration travel plans, potential job or housing changes, and anything else that may make you drive more or less than you normally do. Once you have an idea of how many miles you will likely be driving over the length of the lease, find out if there are plans to match.

If there is a good chance that you will go over in miles, leasing is not the best option. If you will not be going over, continue to the next factor. Driving 10k miles per year does not automatically make leasing the best option.

— Buying Habits —

Over 65% of Americans between 25-45 years of age change vehicles every 2-4 years. The finance companies know this, which is why most offer lease terms that fall into this range. Some go longer.

Leasing is freedom and prison at the same time. While it allows a consumer the opportunity to get out of one low mile vehicle and into a no mile vehicle, it also locks a person into the terms. Once you’re in, it’s hard and/or expensive to get out. Trading is difficult until a few months before the term ends.

If you are sure you want to change vehicles every 2-3 years (and you have leasing “driving habits”) then leasing is potentially the better option. If you keep your cars for four years or longer, that doesn’t necessarily mean you shouldn’t lease.

When GM started their SmartBuy program, it took a lot of heat from consumer advocacy groups because it was a lease that seemed like a purchase. Terms such as “balloon payment” and “due at Lease End” became synonymous with “SCAM”.

In reality, this is a method of “buying” more vehicle than a person’s payment range would normally dictate. As an example, a recent promotion by Lincoln offered their luxury MKZ for $0 down, $0 due at signing, $0 first payment, and $399 a month payments on a 39 month lease.

A standard loan of 72 months at a low 2.9% on a $35,000 vehicle would be over $500 per month. If a consumer wanted to purchase this MKZ at Tulsa Lincoln and had great credit but didn’t like the high payments, they could lease it for 39 months. After the lease, they could finance the balance and still be under $400 per month.

This is NOT the recommended way, but for those with “steak taste on a burger budget” it is an option.

— Manufacturer Incentives —

The vast majority of automotive lenders like to keep a mix of leases and purchases out on the road. Too many leases cause the manufacturer to lose more money when the vehicles are turned in because residual values are normally higher than actual cash values. In other words, what the manufacturer thought a vehicle should be worth in 3 years (residual value) is normally higher than what they actually bring at the program car auctions (actual cash value).

Still, they want a certain number of leased cars on the road for several reasons. In the long run, leases bring the manufacturers and their dealerships more money because of higher owner loyalty, improved likelihood of proper vehicle servicing, and a better chance of selling more expensive, higher profit vehicles.

All of this computes into a nice ebb and flow of incentives offered. There will normally be incentives for both financing and leasing a vehicle, but whichever way the finance companies want consumers to lean for that particular time period is the option that will have the better incentive. Look at both options and see which feels better.

— Vehicle Rates and Residuals —

Some vehicles are good for leasing. Others are not. The two most important factors (and often the hardest to understand) are rates and residuals.

The lower the rate, the less an owner will end up paying. Seems simple, but when comparing different makes and models, a lower rate might also signify a lower residual. If this is the case, any savings a consumer gets from the rate are wiped out by the lower residual.

The residual value in a lease equation is the amount that the finance company believes the vehicle will be worth at the end of the lease if it is within the mile limit, mechanically cared for and without damages. The higher the residual, the lower the amount financed, and thus, the lower the payments.

For example, if a $30,000 vehicle has a 50% residual for three years, the buyer is basically getting a $15,000/36 month loan. If the residual for that vehicle was 40%, the buyer would be paying for 60% during that time, so they would be getting an $18,000/36 month loan.

It is sometimes difficult to follow the math, but the concept is simple. The higher the residual, the less a buyer will be paying during the lease. Consumers who are true “leasers” who will be switching vehicles at the end of the term should look for higher residuals. People who are leasing to get the low payments and plan on getting a loan for the balance at the end of the lease shouldn’t be too concerned about residuals because whether they’re paying 60% now, 40% later or 50/50% now/later, they are still paying for 100% of the car in the long run.

Car Buying Tips

Some very wealthy people have never bought a new car in their lives. With so many super-low mile used cars out there, what’s the point of paying thousands more for a few less miles?

Then there are those who refuse to buy used, regardless of their financial situation. They would rather buy a brand new beater than get into a high quality vehicle that has had someone else behind the wheel.

After all is said and done, it really comes down to personality and goals when deciding between new and used cars. The 20/20 rule applies – 20 percent of people will never buy new, while 20% of people will never buy used. For the other 60%, this article is for you.

Selection

Between huge dealer inventories, the option of dealers trading and bringing in a vehicle from another dealership, and custom ordering becoming more popular, the selection factor goes hands down to new cars.

For popular vehicles, it is definitely possible to find a used car. The internet makes it simple for someone to search around the corner or across the country for that perfect used car. Still, it’s nothing compared the options available with new.

Price Matters

Even in today’s ultra-competitive new vehicle market where MSRP has been replaced by Invoice as the starting mark for price negotiations, a car still loses 10%-20% or more of its value the moment it hits the street.

Low mile used cars a year or two old can be dramatically less expensive than its brand new counterpart. There are exceptions – Honda, for example, tends to lose less off the top because they rarely have rebates and their reputation is very strong.

Other than the few exceptions, a used car is normally dramatically cheaper than a new one.

Interest Rate

For the 95% of us who borrow money and make car payments, interest rate becomes an issue. New cars are less of a risk for the lender, so their bank rates are lower than on a used car. The manufacturer loan divisions make it even more appealing to buy new with 0% financing available on most vehicles at some point after their release.

Two or three points against a $30,000 loan can mean big money on a 4-6 year note. For shorter loans, the rate is less important.

Loan Term

While the rate is normally lower for new cars, the term is usually longer. A prudent buyer can get the same payments on a used car that they can get on a new car, only for fewer payments.

There is also the option of extending the term on a used car purchase to the length of a new car. Vehicles last longer. There are loan companies that will extend a note to 6 or more years on a 3 year old vehicle because they expect it to still be running after that amount of time. In those cases, the payments can be much cheaper than on a new car.

Peace of Mind

Going back to the new car smell, the new car knowledge is very appealing. A rough driver who doesn’t do car maintenance and likes to drive 90 mph in their Kia Rio can really hurt a vehicle, even with low miles. When you buy a used car, you take the risk of getting that car and not knowing the bad things it went through for months until it starts having problems prematurely.

Equity

Vehicles are not like homes. They depreciate, regardless of what happens to the market. Some depreciate less than others, but no matter what, every day makes it worth less than the day before.

Used cars have already absorbed the initial depreciation and are closer to leveling out on the depreciation scale. The first 2-4 years of a vehicle’s life result in a loss of up to 75% of its original value. In the first couple of years of a standard 5 year note, it is nearly impossible to trade in a vehicle that was bought new with no money down and not have negative equity.

With used cars, it is still difficult, but not nearly as hard as it is with new cars.

Final Thoughts

How often you trade, how well you negotiate, and the make and model of the vehicle you buy will determine a lot regarding the pros and cons of a new or used vehicle. Prudent buyers will seek out dealerships such as Used Cars Oklahoma City to help determine which is best.

New and Used Car Buying Tips

Did you know that experts claim that female buyers pay, on average, $1200 more than men for the purchase of an automobile? That’s about 5% more on the average vehicle investment! Consumer financial powerhouse USAA commissioned a 2010 survey to get to the bottom of this issue. The findings found that women who did not like to negotiate at the car lot gave two primary reasons for their reluctance:

[+] Feeling Intimidated

[+] Not Feeling Confident

As evidenced by the $1000+ difference in what you may end up paying for your next care, it would be well worth your while to read up on some negotiating tips geared toward female purchasers. First off, you want to know as much as possible about the vehicle or range of vehicles in which you are interested. Technical expertise in the automotive arena will boost your confidence, while demonstrating to your salesperson that you are really know what you are talking about. You also want to have at least one “back-up” vehicle in mind – a car, truck, or SUV which you would be willing to buy if pricing on your primary model is not working out. This also gives you alternatives – a key to negotiating effectively.

You not only want to know what the tech-related specifics of the vehicle you have in mind, you also want to know just how much it is worth. There are virtually countless places online to research not only vehicle MSRP, but how much people in your zip code have actually been paying for the specific car or truck you have in mind.

Brush up on your negotiating skills. First off, you want go to the dealership having already determined what positives you can bring to the table, such as good credit, a big down payment, being ready to buy today, etc. Knowing and playing upon these factors will up your leveraging power. You also want to be comfortable with walking away. That way you can’t be so easily pressured into a deal. If the dealer is not cooperating, be ready to walk. You can also research the inventory of other nearby car lots. That way you can show the dealer that you have somewhere else to turn if he or she is not ready to negotiate with you.

Another great strategy is to apply for and arrange your financing package ahead of time. If you already have your auto loan in hand, the dealer has fewer opportunities to take advantage of you. Your stock will also be up, negotiation-wise. That’s because you already have the funds available to make your purchase. Remember that they want to make the sale as much, if not more, than you want to buy your car.

Used Car Selling Tips

The internet has become a great place to buy and sell new and used automobiles. In a matter of minutes, you can advertise your vehicle for sale by posting your ad on various paid and free classified ad systems. Compared to traditional newspaper advertising, selling your car on the Internet can be easy, fast and can save you money as well.

The following are a few simple tips for selling your car on the Internet:

Research your selling price
Part of a successful sale involves a reasonable price which buyers will be interested in submitting an offer on. If your sale price is too high, buyers may not be interested in contacting you at all. Initially start by researching your local newspaper for prices for your used vehicle, you may be surprised to find a wide range in price for the particular make and model of your vehicle.

Create an email selling account

At times you may receive junk emails, you may want to separate your sales inquiries from your personal or business email account. Visit Google Mail, Yahoo Mail or Hotmail for a free email account where you can receiving inquiries and emails about the items you are selling.

Photo ads sell

People online want to see what they are buying. People look for color, condition and any additional accessories that your vehicle may have. Although you may not need to post all your car or truck photos, take as many pictures of your car in case a buyer wants to see more photos of your sales item.

Mention that it is a private sale or for sale by owner in your ad

Some people like to deal with people direct and may be apprehensive if they know they will be dealing with a dealership. Not to say anything about automotive dealerships, but it is simply a matter of personal choice.

Selling a car privetly also ensures that you will get the best possible price and the buyer will get the best possible deal.

Get your car ready

Thoroughly clean your car or truck inside and out. Buyers love a clean vehicle and it makes a great impression. Consider spending some money on having it professionally detailed.

Provide lot’s of information in your ad

Buyers want to know everything about your car: when was it built, are you the original owner, how many miles or kilometers on the vehicle, has the engine been rebuilt and more. Listing lot’s of information in your ad shows that you pay attention to detail and that you have nothing to hide when selling your car.

If you have photos of the vehicle posted on a website somewhere, provide a link to that site. Indicate to the potential buyer how to contact you; by email or by phone. Optional is to list where the car is located so that people can come and view it at their leisure. Some auto sellers even indicate what their viewing times are: mornings, evenings, weekends.

Don’t be affraid to put “OBO” (or best offer) in your ad. This tells car buyers that you are willing to negotiate the price of the vehicle and that you are ready to sell your car.

Advertise your car on internet car classified systems

There are many paid and free car classified ad system on the Internet where you can post your used car ad to. Some will accept photos while others simply offer a text ad. Initially start out by searching for local ads within your city or state. National ad systems will provide you with a larger coverage, but may also charge your for your listing.

Secure Financing Before Going to the Dealership

The finance department is one of the last areas where a car dealership can make good, consistent money from their customers. Some dealerships even sell vehicles at cost without fuss or haggling in hopes that their efforts will be rewarded in the finance department.

Consumers can secure their financing online through various 3rd party lending services. They can go to the manufacturer websites and get pre-approved. Some car dealer websites even offer 30-second pre-approvals through their own finance department.

Whether a customer has great credit or poor credit, they should all go through the process of securing their financing before going to see the dealership. It isn’t that customers can get better rates at their bank or 3rd party lender than they can at the dealership. On the contrary, car dealers can normally offer a lower rate 9 out of 10 times, regardless of credit.

The issue is, if a customer doesn’t know the rate they qualify for, a dealership is not obligated to offer the lowest possible rate. Knowing the available rates at a consumer’s particular credit condition is an important first step to getting the best rate available.

Most banks and credit unions have a set rate based upon credit. Two people with similar credit scores and other factors such as job time, gross income, outgoing expenses, time of residency, and automotive credit history will get the same rate from a bank or credit union. At dealerships, sometimes the rate is the same, sometimes it isn’t. If the finance manager at a dealership feels that they can make a little more money off the financing by charging a little higher on the rate, they are welcome to do so.

Several Automotive Websites have ways for customers to be able to get their information to the credit department and get a decision very quickly. Dealerships such as Nebraska Honda Dealers and New Hampshire Saturn Dealers go a step further with their 30-second credit application.

Once a consumer knows their rate from outside their dealer, they should apply at their dealership, just to put their information on file and have it ready. It is much easier to fill out credit online than it is having a salesperson asking questions and writing freehand.

From there, the time at the dealership is easy. Find the car, go to finance (who should already have your credit information), let them offer you a rate, and then tell them the rate you can get elsewhere if their rate isn’t lower. Almost 90% of the time, they have a lender who can beat any rate that a consumer brings them.

Car Buying Tips

1) Push, Pull, or Drag Sale

A piece of junk on Wednesday is still a piece of junk on Saturday. There are ads that claim that no matter what condition you trade is in, they’ll give you $1500, $2000, or even $3000 for it in trade.

Foolish people flock in. Some even drive off with a new or used car. They were given $3,000 for their 1983 Chevette and they feel like they just ripped somebody off. The truth is that they probably just got ripped off.

Most car dealers have around $2000 to $2500 worth of markup built into the price of their lower end vehicles and more (sometimes much more) built into their higher priced ones. When they put on their Push, Pull, or Drag sale, all they do is mark up their vehicles an additional amount equal to their “minimum trade allowance.” By doing this, they can give you a ton for your Chevette and still make thousands.

2) $10,000 Best Price Guarantee

This is a great one for traffic. Many dealers claim that if they can’t beat a deal, they’ll give you $10,000. They might as well say they’ll give you $10,000,000, because it isn’t going to happen either way.

When it comes to new vehicles, the market is impossibly competitive. 95% of new car dealers will match the price than any other dealer gives on an exact same vehicle. But not all of them guarantee the claim with money, simply because they don’t want to insult the intelligence of the consumer. The bad part is, not all consumers are intelligent enough to recognize that unless another dealer is willing to lose more than $10,000 on a vehicle, they’ll NEVER pay the money.

3) Buy a Car, get a “Free” _______(fill in the blank)

Big screens. Camcorders. Computers. Whatever the item is, it isn’t free. The price is simply built into the cost of the vehicles. A car deal that would normally bring $3000 profit may “only” bring $2200 after they give you the $800 gift certificate to Circuit City or Best Buy.

4) “When we make a deal, we’ll pay off your trade no matter how much you owe!”

They might as well say, “When we buy groceries, we’ll pay at the register no matter how much we owe.”

The key phrase in this sentence is “When we make a deal…” Paying off the trade is part of making the deal. If they cannot pay off the trade because the consumer owes too much, they won’t make a deal. It’s the kind of doubletalk that gives car dealers a bad name.

5) Half Price Program Car Sale

Many cars, especially domestic mid-sized sedans, depreciate quickly from their original MSRP. A Lincoln Town Car, for example, may have an MSRP around $50,000. After the deep rebates and discounts, it’s possible to buy one a few month before the next model year in the low $30’s.

After a year and 20,000 miles, they can be purchased at the Lincoln dealer auction for the low $20’s. Dealers can then mark them up modestly and still sell them for half the price of the original MSRP.

While this isn’t exactly a scam, it can be misleading and is a perfect example of how the domestic market needs to reduce prices instead of keeping the prices high and offering huge rebates.

To see if the vehicle is really a good deal, find similar ones on some of the automotive classified sites like Autotrader, Used Car Search, or Cars.

6) The Good Old Fashion Loss Leader

This is by far the most common dealer scam out there. No, there is nothing outwardly dishonest about it, but it can be misleading nonetheless. A loss leader is where the dealership advertises a vehicle at a greatly discounted rate. While they may have 50 Honda Civics to choose from, they only have one or two that can be sold at the advertised price.

The loss leader is usually stripped down with no options, manual transmission, and sometimes even with no air conditioner. Consumers come in to buy it, but usually get switched to one that has more of what they want.

7) Internet Price Discounts

This one is not always a scam, but usually it is. You have to read the fine print.

For automotive websites, the number one data capture tool is the pop-up or some variation. They may come up as soon as you enter the homepage, after you close it, in front, behind the browser, or any of the clever new ways to lock customers into filling out the information form. Normally, they offer a few hundred dollars in discount for printing and bringing in the coupon, “check”, or voucher.

In the fine print, most will say that the discount voucher must be presented before negotiations start. In other words, “Show me the voucher so I can include that value in our discount.”

Most dealerships have some measure of room in their prices to allow for discounts. These vouchers normally will not help get any larger discount than if the customer never brought them in, but hey, the voucher did its part to get you in, didn’t it?

Not all new and used car dealer websites offer these frivolous discount vouchers. Some of the more respected ones from coast to coast use good website strategies to show their cars, offer their services, and help consumers make a deal.

Automotive Websites like Atlantic City Chevrolet Dealers and Los Angeles Honda Dealers use honest and quality methods to not only have a great dealership, but also great websites.

8) $88 Down, $88 per Month

For anyone who doesn’t think this may be a scam, please do the math. Better yet, check a payment calculator. A $10,000 car at $88 down, $88 per month at 6.9% would take 181 payments to pay off.

That’s a month longer than a 15 year mortgage.

In the fine print, you’ll find that the $88 per month is introductory and the real payments kick in on the fourth payment.

9) $199 Month SUV

Similiar to the previous, but different. Again, read the fine print.

It is either a long lease with a large down payment or it’s a purchase with 25% down and a 96 month term. That’s eight years for anyone who is counting.

This is one of the best scams because it usually results in switching the customer from a new to a used one that will allow higher profits. Dirty, dirty, dirty.

10) Buy One, Get One Free

This is the granddaddy. Buy a car, and get a second one for no additional cost. WOW!

Just make sure you get a good driver to go with you to bring the 1989 Nissan Sentra with flood damage home with you after you overpay for your other vehicle.

Car Buying Tips

Conventional thinking is that it is easier to buy a vehicle off of an individual than it is from a dealership. Fewer hoops, fewer lies, cheaper and less hassle — or is it?

Many car dealers are slowly, surely, and finally starting to become more truthful in their dealings with customers. It isn’t because they ever really wanted to. The information on the Internet in this highly competitive market have forced auto dealerships to “come clean” in many aspects of their dealings.

Car sellers, on the other hand, are still as up and down as ever. There are many people who are honest and straightforward with selling their vehicle, just by nature. Still, there are those who are taking advantage of the Internet and the wealth of resources available to make great money selling as an individual.

Many “individual” sellers actually have a dealer’s license because they are selling more than the limit of cars that an individual can sell in a year. These licenses are not cheap.

With that said, please erase any ideas that car dealers all lie and most individuals do not. Honesty must be judged on a case by case basis, so that is no longer part of the general equation.

Advantages and Disadvantages

Selection: There is no competition. It is easier to find a vehicle by searching dealership inventories than it is from individuals.

Price: Normally, it is less expensive to buy from a individual. With no commission, no “dealer pack”, and no advertising costs, an individual can sell their car for less (but be careful, as “can” does not mean “will”).

Condition: Most reputable car dealers will inspect their vehicles before selling them. Many smaller dealers and some individuals will “bandaid” fix items such as adding Freon to the a/c, adding “No-Smoke” to the engine, etc.

Trading: Few individuals are willing to give money or value for a traded vehicle. In other words, if you have a car, you can trade it at the dealership when you buy. Buying a car from an individual adds the extra step of selling your old car.

Buying Experience: Very few people look forward to dealing with a car dealership, regardless of how good they are at customer service. It is an ordeal almost without exception. Individuals are normally a handshake, count the money, sign the title, and another handshake.

Post Buying Experience: There are many horror stories on both sides for this one. Dealers can be reluctant to fix a car that was sold “As-Is”, while individuals are often hard to track down, plus getting them to fix something, either through asking or through the legal system, is almost impossible.

Conclusion

It seems like a pretty even comparison. In the end, it all comes down to time and patience. If you have the time to sift through the bad, check vehicles out thoroughly, and wait for that perfect deal, buying from an individual may be the best bet. If you need a car this week, don’t dismiss individuals, but be wary. A car dealer may be your only real option.