Tips on Buying Cars: buying a new car, auto salespeople, buying a new car

Question
Dear xxx,  I am in the process of buying a new car (Honda) and need some lingo to use in response to the barrage of salesmen.  I know there are lots of ways they make extra profit on a typical car but I am not sure of the terminology.   They typically quote a price that they paid (this price is hard to believe as it seems that they cannot make any profit at that cost).  Also, is there a website that can enlighten me?  Thanks in advance for your help.

Sincerely, Dick Schlueter


Richard Schlueter
Sr. Design Engineer
Kaman Aerospace
217 Smith Street
Middletown, CT 06457
PH# 860-632-4588
FAX# 860-632-4422
email- Dick.Schlueter@kaman.com  

Answer
Hi Dick,

You’re asking the questions that everyone needs to ask, but few actually do. Too many people trust what their salesperson and dealership tell them, which is usually not in their best interest.

It’s difficult to give you short, simple answer that will make any substantive difference. I condensed it all down to six steps, which I term the Six-Step Approach™, in my book. But here are a few tips that may help.

1.   Be an informed consumer. Informed consumers know more about what they want to buy, what it really costs, what they’re willing to pay, and if they’re getting a good deal or not. This means knowing as much as you can about what you want to buy including price (MSRP), dealer’s cost (invoice price), rebates and other incentives that are available, and what you’re trade-in, if any, is worth on the open market, and to the dealer.
2.   Have a good idea of what you want before you step onto a lot. Auto salespeople are trained to ask you a few questions that they will use to decide what you want and what they want to sell you.
3.   Don’t discuss monthly payments. They will ask you how much you’re looking to pay every month for the right vehicle. No matter what you tell them, they know that they can add hundreds of dollars to it once they get you hooked. And this is a way that they get thousands of extra dollars from unsuspecting buyers. Make your purchase decision based on the price of the vehicle, not the monthly payment.
4.   Never negotiate. This is one of a dealer’s biggest money making areas. If you know what the MSRP, invoice, rebates, and any other incentives are, you can figure out what you want to pay before you go and talk to them.

These should help you, but in response to what ‘lingo’ you should use with your salespeople, I say you should use none. Their plan is to us their tricks and techniques to lead you down the chute, unsuspecting like a sheep going to slaughter, and then let you have it. Buy smart, the same you buy everything else, and you won’t have to play their games.