There are way too many myths about car dealers to address in one article, but I thought I would give it a shot, to call attention to some of the most common misconceptions.
Financing is cheaper outside the dealership. Not always the case. Dealers have a lot of sources for financing, and often they have lenders competing for the best rate for you. It’s a good idea to know what you can get on your own, but often the dealer can offer a rate as low as zero percent.
Don’t tell the dealer you have a trade until the end. Generally, this just slows the process. You don’t want the dealer playing games with you; don’t play games with them. Your trade-in is worth the same no matter when you reveal it.
The end of the month is the best time to buy. Generally, this is true. Dealers, managers and salespeople push harder the final week of any month. Everyone in the car business has a goal to reach, and the end of the month is crunch time.
Dealers never lose money on a new vehicle. They wish! Many dealers take deep losses on vehicles often. It might be on a demo, a vehicle that has been in stock too long or a designated loss-leader, but it happens way more than you think.
If I know what the dealer paid for the vehicle, I can get a better deal. There is some truth in this one. It is easier to negotiate from dealer invoice up, than it is from MSRP down. Offering the dealer a decent profit can get you a fair deal quicker and with less hassle. Starting at dealer invoice and going down will end in total frustration for the buyer.
Going through the Internet manager is always cheaper. Internet managers are salespeople who can type. Most of the time, their job is to get you into the showroom to go through the normal process of purchasing.
Paying cash always saves money. Not true. Many times it can actually cause you to pay more. There are extra incentives often for financing with a captive lender such as Ford Credit or Toyota Financial. You can often take $1,000 or more off the sales price.
Buy on a rainy day. Seriously? Dealers need to sell cars every day; the weather makes no difference whatsoever.
Dealers need to move the old models out when the new models start to arrive. This is absolutely true. Dealers make it a mission to move out old inventory. There is a saying in the business: “Cars are not like wine; they don’t get better with age.” The dealers know the longer they have a car in inventory, the less profit it makes or the bigger the loss. Also, there are often factory-to-dealer hidden incentives that they can use to make the deals better.
There are a lot of “experts” out there that give you advice on car buying; unfortunately, a lot of that information is false or often outdated. If you use such advice, it can make car buying unnecessarily difficult and can even cause you to pay too much for your next car