Do's and Don'ts When Buying a Car From a Dealer
Here are some money-saving tips for getting the best deal and avoiding unnecessary extras
You'll have to go to a dealership to check out the car, close the deal, and take delivery. But watch your step; this is the phase when the dealership staff could try to make up for a low price on the car by making you pay more in other areas.
Finalize the Deal
Don't go during special sales events solicited by direct mail. These are often run by contracted specialists trained in techniques that increase a dealer's profit.
Do inspect and test drive the car you're buying. Verify that it's the right trim level with the right features.
Do walk out if a salesperson tries to raise the price you negotiated. Take your lowest competitive quotes and estimated dealer-cost figure to use as leverage if you plan to do some final negotiating in the showroom. Don't negotiate around a monthly payment figure. This gives the salesperson too much room to manipulate figures to the dealer's advantage, especially if you have a trade-in or are financing through the dealer.
Do negotiate one thing at a time. Nail down the new-car price before you negotiate the trade-in or financing terms.
Extras Can Add Up
Don't buy unnecessary extras. Offering items like corrosion protection, paint sealant, fabric protection, and window etching of the vehicle ID number are common ways to get you to pay extra. You usually don't need these services or can get them for less money later.
Don't purchase an extended warranty on a car with a good reliability record. In a 2013 survey by Consumer Reports, 55 percent of owners who purchased an extended warranty hadn't used it for repairs during the lifetime of the policy, yet the average price paid for the coverage was just over $1,200.
Do cross out extras in the contract that you haven't agreed to pay for.
Do bring a calculator if you're getting financing to verify that the terms match the amount you've agreed to. Dealers can pad the monthly payment to add extras into the contract, sometimes without the consumer even knowing he or she has paid for them.
Watch the Details
Do pay the down payment with a credit card. That way, if the dealer goes out of business before you can pick up your car, you can challenge the payment with your card issuer. And don't sign any forms with items left blank. A dealership could falsify information such as your income or the size of the down payment on loan applications.
Do make sure the dealer pays off your old auto loan promptly if that's part of the deal. If a dealer goes out of business before doing so, you could be left holding the bag for payments on a car you no longer have.
Don't agree to be responsible for any extra interest on loan payments for the trade-in after you've signed the bill of sale.
Don't drive the car home before the financial paperwork is completed. That has often resulted in so-called "yo-yo" or "spot" deliveries, when the dealer calls the buyer back, claiming the financing fell through, to get him or her to sign new paperwork at less favorable terms.
Don't take delivery of the car if additional work needs to be done on it, such as a repair or accessory installation. If a dealer goes out of business, it can be difficult to get the work done.