It is truly one of the most astonishing phenomena in the consumer finance landscape. Some people spend days, weeks, and even months of carefully researching relatively small ticket purchases like a new blender or smartphone worth a few hundred dollars, but they will head into a car dealership and within an hour or two they will drive out with a car worth tens of thousands of dollars — only to realize that they paid more than they should have, or bought the wrong kind of vehicle. In many cases, both regrets make the list.
What’s more, this pain and suffering certainly isn’t limited to one type of consumer or demographic group. Sweet little old ladies who only drive to the knitting store fall into the trap — and so do highly educated professionals with lots of acronyms beside their name.
Here’s the thing: unless you’ve actually sold cars for a living — and not just for a little while, but for years and years — then you need to understand that the playing field is not level. Car dealerships are meticulously designed to give the seller a distinct advantage. Everything from the layout to the lighting to the placement of the banners is tactical. Nothing is random.
Ultimately, this means that if you want to avoid buyer’s remorse — and wasting thousands of your hard-earned dollars — then you need to approach your car buying experience with focus, clarity and discipline. In other words, you need to be a professional and not an amateur, because you’ll be going head-to-head against people who have been trained to manipulate you from the moment you arrive (actually, from the moment you pull into the parking lot) to the moment you leave.
Here is the game plan:
- Research all prospective cars on the web to get a clear understanding of models, options and prices. Nothing that a salesperson tells you about a car you’re interested should surprise you — especially the price.
- Research your financing options before going to a dealership. In most cases, your bank or some other third-party lender will offer you a better deal. What’s more, you’ll be able to pay for the full price of the car in cash, which will give you negotiating leverage. The quicker the dealer gets their money, the more flexible they’ll be.
- Never reveal your monthly car budget (typically in response to the question: “how much can you afford to pay each month?”). If you do this, then the salesperson will make sure that you can afford the car on a monthly basis, but you will end up paying more overall. What matters is the total price of the car.
- Never tell a car salesperson that you’re interested in trading in your old car. If you do, then the so-called great deal you get on a new car will be wiped out by the lowball offer on your trade-in. Instead, negotiate the price of the car and then at the end (if you wish) you can talk about the trade-in. If you do this, then obviously you need to have a realistic understanding of how much your trade-in is worth. If you don’t get a fair offer, then sell your car privately.
While always being polite and poised — after all, you are in control of your manners and not someone else, right? — always be willing to walk away. This is so important! Never feel stuck. Until you sign on the dotted line, you are in full control. Remember, the sales experience is designed to either exhaust or disorient you (depending on the type of buyer you are — slow and steady or fast and furious). Even calling a time-out and going for a coffee or a bite to eat could mean the difference between making a smart choice vs. one that you will regret for years or decades.
So, there you have it. Hopefully, this information will help you the next time you (or a family member or friend) is buying a car. Good luck!