By: Gov Auctions | 26 June 2015
What Car Dealers Don’t Want Buyers to Know
They are out there to make a sale. You may be talking to a personal friend, but at the end of the day, he’s a car dealer; and if there’s one thing that matters to him the most at the time, it’s what he gets from a trade-in or a sale. This also means he’s going to do everything that he can to achieve a clean hefty profit.
Here are some things they don’t want you to know:
- Some of them are actually buying cars at auctions. Many dealerships accept trade-in, but what you don’t know is that they also spend a lot of time joining public auctions. In these events, cars may be sold at more than half their book value price, allowing the dealers to enjoy a very huge profit for the sale. Some are particularly interested in government auctions since most of the vehicles, especially from federal or state use, are in mint condition and with clean titles.
- The good news is you can participate in many of these auctions, removing the middleperson or, in this instance, the car dealer. While some are meant only for them, most are open to the public. You just have to know where and when these auctions are.
- You need more than the Kelley Blue Book. Kelley Blue Book and to a certain extent Edmunds.com have been frequently used by car buyers in trying to determine the estimated trade-in value of any type of car. The idea is, of course, you don’t want to pay too much or be screwed in the process.
- However, some car dealers will attest that not all values listed in Kelley are true. Rather, it’s possible that cars can be undervalued by as much as $5,000! Although Kelley, in general, is still a trusted resource, couple it with NADA (National Automobile Dealers Association). It’s a database used by dealers. When trying to determine values, use NADA then Kelley.
- They will rush you to buy a car. Like any other salesperson, car dealers are experts in expressing scarcity. They can make you feel that you’re wasting time by thinking about a purchase. You have to make a decision right away. Sometimes they throw in incentives like rebates or discounts.
- But as a customer, always remember that it’s your right to think before you buy and a duty to make sure you’re getting your money’s worth.
- The Four Square worksheet is an enemy. Car dealers have many different sales tools, and one of them is called the Four Square. It’s a worksheet divided into 4 quadrants, where they write down the trade-in value of the car, down payment, value of the new car, then financing.
- The major downside of this is it’s complicated, and you’ll drown with all those numbers you miss the fact you’re already being played by the car dealer.
- The solution? Skip Four Square. If you can, secure an auto loan or have yourself pre-approved of car financing. It also helps if you just sell the car and or trade it privately.