AutoBuyology 101
AutoBuyology©
An Arts & Sciences Crash Ph.D. Course in Carlessnessology 101©
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"If you want
to control people, promise them freedom..." - L. Ron Hubbard
The Consumer
Driven Car Deal
"Driving (Defensively) A Hard Bargain"
Fixing The Dings In The "Great" American Car Deal & Paving the Consumer's Toll Free Lane on the Car Deal Highway
Mobilizing Auto Consumers in the Marketplace
Deal Negotiating
Strategies
Dinging the Manufacturer and Dealer
Very long page follows (Print?)
Driving A Hard Bargain
Climb behind
the wheel of
the consumer driven car deal...
and swerve to avoid the
highway robbery
AutoBuyology
DING the
Dealer and
Ding the Manufacturer
on Negotiated Profits
- The following is a listing of some car deal related considerations for empowering, motivating, & mobilizing consumers in consumerizing (jump-start it, or give it a push, but don't wait for the auto or banking and loan-lending industry or your government to help) the Great American Car Deal.
- You may wish to consider and pass along these thoughts to friends and relatives for further discussion, consideration, reflection, improvement and adjustment or tailoring to individual personal circumstances, politics and tastes and "market forces." Before negotiating car sales, lease or service deals, pick up a book or two or three (they all have some new twist or angle on evening up the car deal score) on car buying and negotiating and spend some quality time with these books.
- Find as much information and wisdom as you can about car dealer "dealing by the numbers" techniques which are referred to collectively as "System Selling." These dealing tricks have inflated profits for the auto industry and ripped-off our friends and families for decades. Oh, the automobile and dealing industry recently "celebrated" its 100th birthday. So, why do you suppose they are called "dealers"?
- Beware of turbo-charged industry lip service (salespersonship and advertising) being paid to lure consumers down to the dealer (trolling for suckers). Such manufacturer advertisements and material fake an earnest attempt to make dealing and service fairer and cleaner. Remember that manufacturers have said that they have no control over their authorized dealers, and you will hear this especially loudly after a deal turns sour. These ads and materials, some cleverly pandering to consumer angst by spoofing the classic car deal shams are an acknowledgment of the deep traditions of sham in the industry, and do not represent any substantive difference in the treatment of consumers. Trust your instincts and the general public reputation of the automobile industry.
If the dealer promises you the moon during deal and price negotiations, get it in writing, and do not be surprised if you get mooned after buying it... nothing personal, just business = the economics of capitalist relationships...(:-)
- Pick up Remar Sutton's books at the library or bookstore and read what he says about "System Selling," the dealer's major weapon against consumers in car dealing. Shift "System Selling" into reverse and engage the dealer in "System Buying" where you keep in mind and keep reminding the dealer that the dealer wants and needs your money more than you want or need the trouble of another expensive, over-priced, and potentially problematic new or used car. Avoid over-valuing an inanimate, shiny thin tin, plastic and glass object which has been designed to become obsolete with next year's new models.
Car dealing
remains a shabby anti-consumer business. This industry will say and do anything
to lure and milk more consumers -- even try to sell itself as
honest and fair in the face of overwhelming evidence to the contrary.
Things must be awfully competitive out there in dealer land,
that this industry would acknowledge in its ads its shameful
"past" practices. Don't buy it, the industry is no
cleaner or fairer today than it was fifty or a hundred years
ago. Ding the dealer and ding the manufacturer on every new car
deal or lease. This industry has earned the public's ire and
wrath.
The proof in this is the depths dealers and manufacturers go to lure consumers with worthless advertising and sham sales tactics labeled as customer service bromides. As the dealer tries to make you feel uncomfortable (guilt manipulation) about not accepting an unreasonably high price--asking you what you are going to do to make the deal happen, remind the dealer that you are offering a fair price for an overpriced product of mediocre quality and potentially endless and expensive problems regardless of warranty or lemon law, and ask the dealer what he or she is going to do to provide you the vehicle your want at a fair price. Most lemon laws are themselves lemons. Consumers are on their own in enforcing lemon laws and warranties after purchase.
- Develop self-respect as a consumer. Stop expecting this industry or your government to clean up the auto industry unless forced to do so by enough consumers demanding fairness in automobile sales and service practices. Australia has comprehensive consumer protection laws and enforcement in car sales and service practices, including training, testing and licensing of dealers and including full documentation and disclosures of defects and hidden damage repairs. Why don't we? Because we have let the automobile industry puppet our government in watering down, postponing or killing real consumer, safety and environmental protection.
Fair consumer protection laws would protect consumers, honest dealers and manufacturers and our economy by boosting consumer confidence. Dealers who cannot compete fairly shouldn't be in the business. A country or society that would continue to permit an industry to run roughshod over it like the automobile industry has done for decades shows little in the way of collective intelligence or cultural self respect. This can be changed. Until now the auto industry has bought off government with consumer money. Its time consumers demanded a fair return on their investment in this industry and their government.
- A Toyota
Dealer was reported in a major daily newspaper to have lease-sell
dealt a $12,000 Toyota for $26,000 to an unsuspecting and overly trusting
consumer. 2000 auto consumers in Florida who thought they were
buying cars outright were leased vehicles instead. Heads-up and
CARveat Emptor.
- Consider
obtaining a business function calculator (borrow the dealer's) and learn how to
use it before negotiating for a car purchase or lease deal. Such
calculators have programs for calculating the costs and percentages
of interest rates and other important business factors. Remember
to toggle the ding dong dealer factor on your calculator before
settling on price. Every car sold in American is priced thousands
more than its intrinsic and consumer value. Do not pay a dime
over what the vehicle is worth, which is somewhere around the
cost of making the product plus a small or token profit to the
manufacturer for its troubles. Consider that most retailers mark
up their products 50% to 100% of its wholesale costs. The auto
manufacturer merely pads the window sticker price similarly,
which includes a sales incentive or "hold back" in
most cases of between 3% to 5% or more which is paid to or kept
by the dealer upon sale of the vehicle (in addition to the dealer's
markup you negotiate as a fair market price of the vehicle).
Keep these issues in mind when negotiating price. Hold the dealer
and manufacturer's take on every vehicle to the absolute minimum
over the cost of making and delivering the vehicle. The gross
profit on some of the new super Sport Utility Vehicles is reported
to be $20,000.
- One business
or economic philosophy increasingly espoused by business schools
and consultants (gurus) has it that the main purpose of any business
enterprise is to make as large a profit as possible for their
stockholders. Of course this is not true, but it is true that
the main function of consumers in the marketplace is to check
profit creep and gouging by negotiating fair profits on car deals
and leases. Once was when our economic system was sold by business
schools as a means for the equitable distribution of goods and
services in society. This has evolved to the hyper-profits first
theory... most likely from an MBA candidate with too much time
on its hands.
- Recall the
consumer who paid $26,000 for that $12,000 Toyota, and avoid the same
mistake. Usually, low advertised interest rates require purchasing
the vehicle at the dealer's or manufacturer's window sticker
price and may be limited by a time period. Shop vehicle pricing,
and loan interest rates around between several sources and if
you decide to buy, consider opting for the best total price including
interest rate or loan costs, make as large a down payment as
you can budget to keep payments and interest lower. The typical
dealer forms which include spaces for the new car price, loan
and interest rates and trade-in allowances are often confusing
and may be used by a "sharp" salesperson to milk a
deal by hiding trade-in allowances, interest rates and etc. The
confusing auto contract forms must be another customer service
feature. Service in the rear, read the small print on the back
of the form... with a magnifying glass?
Would you like fries with that... or how about our value meal?
- Avoid being
sold redundant or unnecessary dealer applied or installed clear-coating, rust proofing or other
dealer applied or supplied extras unless you feel particularly
charitable.
Generally these items are unnecessary and are expensive far beyond
their worth, garnering huge profit margins for the dealer. Beware
the fancy label trick. Clear-coating may be called by some fancy
name. If its applied at all, and often it isn't even applied,
its usually invisible, and more importantly, its unnecessary.
A good way to avoid being surprised with last minute sales pressures and add-ons or dealer remembered extras (surprises) is to obtain a copy of all deal related paperwork and a written disclosure of all services or dealer applied or supplied extras the dealer will try to sell you at deal closing or signing of the contract. Obtaining this information well in advance of closing the deal, giving you plenty of time to read the fine print away from the dealership, will better prepare you for dealing with the dealer when completing the deal, and it establishes you as a consumer in charge of the deal. Be ready for the last minute sale add-ons where the dealer tries to milk the deal (the consumer) by taking advantage of your "emotional momentum or investment" after you have made up your mind to purchase. One secret to selling is to ask yes only answer questions. Beware the "yes" answer momentum and the pressure to be agreeable and to answer questions with a positive response... be polite and sociable, but firm... be parsimonious with personal consumer information, as agreement and disclosure can become a communicable disease in car dealing.
If a dealer tries to load-up a deal with lots of extras, either walk, or inquire whether the manufacturer didn't supply a fully completed product. Before paying hundreds or thousands of dollars for often unneeded dealer add-ons or extras, take a break, and leave the dealership to evaluate the sales pitch, and research the suggested extra[s]. Why would you pay extra for dealer installed clear-coating when the manufacturer has already lacquered or clear-coated the vehicle at the factory? Was the vehicle damaged in transit or on the dealer's lot? Many are, including high-end luxury models. If so, make sure to negotiate a much lower price for the vehicle or ask for a new and defect free vehicle. Remember, dealer installed air-conditioning (vs., factory installed air conditioning) is commonly problematic and subject to maintenance problems. If you want air conditioning, its generally better to buy it factory installed.
Smooshed consumers, road kill on the car deal highway)
- Graciously
expect parking lots full of resistance from dealers and manufacturers
on negotiated profit deals. Dealers
and sales staff will do or say nearly anything to pay the rent,
keep the overhead overhead, and maintain their Gucci lifestyles.
Be very watchful of dealers trying to pass off damaged goods
or products of less value on negotiated deals. Many consumers
believing and expecting to get defect-free new cars, found out
later that the new car they paid a premium price for came with
undisclosed options of hidden damage repairs or undisclosed damage
or defects. Not all new cars of the same make are the same. Shift
changes at the factory may result in differences in the quality
of vehicle production runs. It has been known to happen that
wrong parts, including major drive train features have been installed
in unintended vehicle models and shipped and sold. Customer service
and satisfaction is merely a goal of varying degrees of commitment,
not a promise or guarantee, although it may be promised (sight
unseen) to induce consumers to frog onto "such a deal..."
Remember, dealers treat customers like numbers (usually with a smile and firm handshake -- count your fingers) through what is known as System Selling techniques. It pays for them to do this, because they don't know how much a consumer knows until they try everything in their arsenal of car deal tricks to inflate the price of the vehicle and milk the deal with add-ons or forgotten, er., remembered extras after a customer has been low-balled back to the dealer with a fantastically low price, only to find the price increased with each new service or extra the salesperson includes in the final price. Without good consumer protection laws, car buying and dealing is "whatever traffic allows," (smooshed consumers, road kill on the car deal highway) and until the laws are enacted and enforced to take the industry to task for its shortcomings, this situation will remain. Even with good laws, there will continue to be sham in automobile sales and service. But, strong customer protection laws would give the industry a fairness target to shoot at (in addition to consumers) and would hold sham artists to account when caught red-handed with the exhaust.
An Unexamined Life Isn't Worth Consuming...(Yum, yummy, crunchy human)
A recent University Extension School class schedule featured "Psychology of Buying"...[This is a misnomer, as this class teaches merchandisers and salespeople how to "read" or psyche out customers in order to manipulate their values and create needs or to make connections between a product and some illusionary relationship to fulfill manufactured and real human needs... not to provide a service, but rather to affect sales and ring up record profits... service is merely the straw-middleman to the end-game of record profits... the best way not to bet ripped off in the increasingly manipulative marketplace is to "know thyself", and the methodologies of sales manipulation.
- Stages of development, personality factors
- Social conformity, individuality and other needs
- The importance of ego
- Types of customers / consumers and methods of communications
- Cognitive and social role styles
- Hierarchy of values
- Perception
- Risk vs. safety needs
- Methods of learning, training and changing. Participants can gain a sophisticated awareness of customer motivations including the importance of building long-term positive customer relationships and the real meaning of providing total quality and service [ostensibly as opposed to the faked variety...?]
- Also see "Servicing Marketing"
Check out similar
classes at your local university extension program or obtaining
the course textbook may be just the ticket for not getting "sold"
on a product or service based on trumped up needs or wants...
as long as merchandisers and retailers are going to push your
buttons, you may as well learn where they are...
- Are you being Freuded or Skinnered? Freuding is marketing by using psychological needs for social acceptance and group association, personal identity, safety, personal values, etc. Skinnering is using operant conditioning or (pseudo) rewards psychology... sometimes know as "good doggie" marketing or sales tricks. The membership discounts cards used by some grocery chains or other stores are a good example of Skinnering (named after B.F. Skinner, the famous Harvard behaviorist who wrote, "Without Marx or Jesus."). Rebates are another form of operant conditioning or skinnering. This is designed to make you think or feel as though you are getting a good deal or a rebate when in fact you are still paying an inflated price for the vehicle. The rebate is the dog biscuit tossed to consumers for performing stupid consumer tricks. Don't buy it... Don't be Freuded or Skinnered. Work your personal values and needs agenda, and don't let the dealer or manufacturer play chickenshit games with your needs and wants to affect a sale or rip you and your family off for an inflated profit.
Buzz Off...
- Be aware
of the new car "buzz" factor and don't rush a deal or pay too much
merely to have it over with -- that's not service, its being
"serviced". Beware the new car "feel good factor"
to the extent this may unduly sway your objective consumer skills.
Avoid becoming emotionally attached to any inanimate object,
especially a new automobile, no matter how pretty or expensive
it may be. Request written documentation of all dealer or sales
representations, and keep in mind that anything in writing from
this industry is doubtful to be worth the paper its written on,
as such information may depreciate the value of otherwise good
paper.
The consumer's agenda is to get the most value/best vehicle with
as many options and extras for the lowest cost. While the manufacturer
and dealer are free to ask any price they wish, and consumers
are free to pay any price they wish, the prudent guerrilla consumer
pays only as much as any product, especially "large ticket"
items are worth, which is seldom much more than it costs to make
and deliver it. In some cases this is less than the cost to make
and deliver the product. This is often thousands less than the
asking, expected or inflated price of most automobiles.
Yep, that's right, we all have paid way too much for the average automobile, way too much, far more than most cars are worth. This we have done due to so called market forces (real, imagined and concocted), which in many cases merely means we have passively "bought" the inflationary pricing schemes, advertising and sales pitches (values manipulation) of an industry at war with America's individuals, families and villages -- consumers. The dealer's and manufacturer's agenda is to maximize after-loophole profits from sales to consumers by hook or crook.
Avoid being drawn down to a purchasing decision from television ads promising low prices or interest rates, and especially if these are promised conditioned on you arriving by or before a specified time. Remember, every time you hear "limited offer," that you will hear the same thing again the next time you turn on the TV or read the newspaper. Buy, if at all, on the consumer's, on your schedule, not the schedule of the dealer or the manufacturer. Maximize your consumer profits in all retail transactions.
Who's buying this mistake, you or me...?
Don't be sold
on any deal.
Guerrilla Car Consumers control the deal. Any worthy or credible offer should
not be unreasonably limited by time. If the deal isn't good in
thirty days to sixty days, its probably not such a good deal.
With some research, effort and patience, and a willingness to
wait, walk or "fly" (this really depresses car sales
staff), car consumers likely can drive a better deal home. As
always, if the deal sounds too good to be true, it likely is
-- watch out for dealer and manufacturer ding factors. And, be
particularly watchful of the "lure low, hard sell"
or lease up tactics where dealers advertise or quote low prices
to get you off the couch, and jack you around on price or extras,
and hard sell you up on higher priced vehicles, or lease/purchase
deals which are anti-consumer and pro-dealer.
- Consider obtaining the title of a current Introduction to Business textbook at a nearby college or school and purchasing or obtaining such a book at your library, and bone up on some of the con-ventional sales and marketing strategies used to induce sales and move inventory. Check out pricing strategies commonly understood to manipulate consumer purchasing decisions. This information, used properly from a guerrilla consumer perspective can be very helpful in avoiding "selling" techniques which favor merchants and business at the expense of consumers. Such beginner's textbooks are worth their weight in gold (actually hard unbacked cash), and should be standard learning materials in every public high school in any capitalistic economy or culture. Ask that your school board consider incorporating basic business practices training in your high school as soon as possible -- and we're not merely talking word processing and dictation here folks. These classes are commonly understood as "business" education at the secondary education level in America.
Dinging the
manufacturer...
- Consider
respectfully offering 1/4 (.25) to 1/3 (.33) or more off (less
than) the manufacturer's invoice price or what is known as the dealer's costs
(not the window sticker price, which is the MSRP or manufacturer's
suggested retail price, which has affectionately become known
as the 'manufacturer's suggested rip-off price') (the manufacturer's
invoice or dealer's cost invoice is available from Consumer Reports,
AAA, USAA or other car pricing service for a nominal fee) to
the dealer for the vehicle and its options and walk away ("fly")
if necessary until the dealer calls begging you to come and take
one of the over-priced inanimate shiny thin tin, plastic and
glass objects piling up in inventory on the dealer's lot.
Yes, unfortunately that $20,000 vehicle is likely worth only
$14,000 or $15,000 or less, at most. Deduct more from over-priced
(aren't they all?) luxury models, especially those "hand
made" Rolls and Jags.
Car makers are posting record profits and building up huge cash reserves at the expense of our friends and families through so called non-negotiable "value pricing" schemes and no-dicker deals. Don't buy value price deals. Record profits are evidence that auto consumers are being fleeced and not doing their job of checking unchecked profit creep in the automobile markets!
Negotiate every car deal. Do your pricing research. Make your best offer and walk. If you like, ask the dealer for his or her lowest, most competitive price for the vehicle. Don't fall for the suggestion that the dealer will match or beat any offer you get from a competitor. This is a classic dealer agenda tactic which is intended to get you to return for the hard-sell or softening-up treatment. Make it understood that you are seriously shopping for the most competitive price for the specific model you are looking for with specific options, and that you need to know his best price and for how long the price is good. Get it in writing. Start over if the dealer sells the vehicle, switches vehicles, or otherwise tries to increase the price when you are ready to buy. Keep in mind that the dealer's best price will be thousands more than the vehicle is worth, and thousands more than it costs to make and deliver the vehicle. This is why the preferable consumer driven car deal is the one where the consumer researches the pricing and includes all of the relevant ding factors and makes an offer and walks. When enough consumers do this, auto prices will fall to their intrinsic or consumer value level, instead of the inflated "market force" level which is inflated with advertising hype and social (peer or the Jones') pressures.
- Why do you
think its called the "Blue Book" price? Keep in mind that the
blue book represents prices inflated by the concerted efforts
of an industry whose interests are best served by inflated resale
costs. The Blue Book price of vehicles will naturally go lower
when consumers in enough numbers begin asserting their responsibility
for checking profit creep and inflated vehicle pricing in the
marketplace. Say, why is it that the dealer never buys or credits
a trade-in at Blue Book price?
The rule of thumb is that a dealer pays 30% less for used vehicles then they are worth and sells them for 15% to 30% more than they are worth. This rule of thumb is generally true for new cars too. So at the least, whatever you negotiated for your last vehicle was likely "at least" 15% to 30% more than it was worth. At least! Actually, 30% to 50% or more is perhaps more like it.
- Another excessive
consumer cost is the so called new car depreciation costs, affectionately known
as the shine or new car buzz cost. This has been reported to be on average
$3500 or more of the price of new cars. The new car depreciation
cost is the dollar value of the vehicle lost when you merely
drive it off the lot new and try to resell it. This is the "shine",
"new car smell" or buzz factor cost in new car prices
-- try to negotiate this out of the cost of new cars, just deduct
it from your final offer and walk. Ask for semi-gloss or matte
finish instead of the more expensive super factory or dealer
detailed shine. Make your offer, in writing and leave a contact
phone number where you can be reached, and walk until the dealer
talks. Expect trunk space loads of dealer and manufacturer resistance
here as well. Resistance and denial are the dealer's expertise.
Change is difficult, especially for many of the "old dog" dealers and manufacturers. Consider whether new car depreciation (shine) costs aren't another good reason to go carless or to acquire a mildly pre-used vehicle...? and / or to demand efficient mass transit facilities...? Last year's new models should be obtainable at a reduced new car depreciation cost.
Consider this: if the vehicle has been test driven half a dozen or more times and has left the dealer's lot at least that number of times, why didn't it lose its depreciation inflated costs during one of those test drives, instead of when you merely purchased it and drove it off the lot? Consumers should stop paying the so called new car depreciation costs. Make this industry appreciate you rather than depreciate you as a customer. Make the industry live up to its advertised and represented claims of customer satisfaction and customer service. Help the industry meet its often claimed customer service goals and priorities.
- "Value
priced", "no-haggle" or "no-dicker sticker"
deals are designed to control pricing and limit consumer rights (free market
responsibilities) to negotiate a fair dealer and manufacturer
profit on the deal to check profit creep (creeps?) and price
gouging, except as a take it or leave it deal--leave it--leave
your written offer and walk or fly until the dealer talks. "Value
Priced" simply means that everyone ends up paying too much
"equally" for the same make and model of over-priced
vehicle within a market: "Such a deal?".
The new so-called value priced deals are an unintended admission by the industry that it has been ripping consumers off on optional equipment for decades. So do you really want to pay extra for this so-called customer service? Value priced deals are the industry's answer to the increasingly prevalent practice of consumers negotiating fairer dealer profits, up from the manufacturer's invoice (so-called dealer's cost) price. It took awhile, but consumers (too few really) slowly and steadily woke up to the negotiated deal and increasingly refused to pay the inflated window sticker price. Although however, too many consumers till pay the window sticker price for new cars. Unfortunately. The "free" in free market when it comes to the automobile deal industry seems to mean that dealers and manufacturers are free to lie, cheat and steal to make a killing on new car deals and service--whatever traffic or the market allows. Moreover, this situation will continue until consumers demand that the industry changes its practices or makes it do so through government regulations, or both.
- It's now time to take the successful dealer profit negotiating concept one step further, and ding the manufacturer on profit as well. A fair price for any new car is a few dollars perhaps over what it costs to make and deliver the vehicle. This assumes that the manufacturer is efficient and prudent in its manufacturing operations, and most are not. This means that a fair price for new cars may actually be less than what it costs to make and deliver them. Negotiate down from the manufacturer's invoice (dealer's costs) price (not the window sticker or MSRP price). Make your offer and walk until the dealer talks--begs you to take one of the shiny thin tin, plastic and glass inanimate objects piling up in inventory on his or her lot. Of course, lemons at any price, unless you're into driving sour citrus, when (if) it runs, are way over priced.
The free market depends
on informed participants.
Indeed, contract
laws assume the parties to an agreement are informed as to the
nature of the product and services and agreement specifics. If
you are not informed and do not have the necessary information
to determine a fair price for the vehicle, hold out until the
dealer and manufacturer provide notarized certifications of all
data necessary to inform you adequately.
Have You Been Serviced by A Factory Authorized Dealer Lately?
- Remind the
dealer and manufacturer about their pledge of customer service
and satisfaction
when they politely decline to provide the requested certified
itemized vehicle production cost inventory. Without this information
consumers are at a disadvantage in determining the true consumer
or market value of a particular vehicle in comparison with others,
unless they buy the dealer's sales pitch--duh?. Expect resistance
here, like it'll never happen, until and unless enough consumers
walk away or fly until the dealer and manufacturer walk the talk.
Make detailed vehicle production and pricing costs a customer
satisfaction and customer service issue with the next auto dealer
you consider buying from. Make manufacturers and dealers compete
against each other in providing accurate, certified accountings
of vehicle production and overhead costs and profit margins.
Pricing is a customer service or its a disservice.
- Don't Buy It. Consider making your
offer (explicitly in writing, including your specification that
you are making an offer for a new and defect-free and fully warranted
vehicle, or otherwise as the case may be), leaving your phone
number and walking away until the dealer walks the talk. Exercise
the important function of checking profit creep and price gouging
in the marketplace and the historic traditions of sham in the
automobile markets by implementing the Consumer Driven Car Deal.
- Beware of
the ding-dong factor in new car deals. Deduct a big ding dong factor from your next new
car deal offer or the ding dong may be on you. The trick to car
deals is to be the dinger not the dingee.
- Request the
dealer provide you with a signed copy of his or her membership
contract with the National Automobile Dealers Association (NADA)
and any other regional, state or local Dealer Group or Association.
Obtain
a copy of NADA's "Customer Bill of Rights", and Dealer
Professional Development program policies. If NADA has no such
documents, requirements or polices, request that NADA undertake
to "professionalize" the "profession" as
real professional associations routinely do. Obtain a copy of
the NADA's consumer protection assurances. Then laugh loudly.
The trick looks like this: the sales person leaves the area to phone the bank to find out how much the pay-off balance is on the trade-in so that it can be factored into the price of the new car, which is financed. The dealer quotes a low pay-off price for the trade-in, and says this number may be off "by just a little" and that the customer will have to pay any extra which may actually be owing on the trade-in. It is inadvisable to trade in any car to a dealer on the purchase of a new car, as a private sale usually will get a consumer more return on the "investment." To avoid having to pay hundreds or thousands more than the low-ball quote by the dealer on such deals, cap the amount to a certain acceptable amount and have this agreement put in writing and signed by the dealer, the lending bank and the consumer.
- Many auto
buyers are reporting that after negotiating a price of a vehicle to be ordered
by the dealer, the dealer tries to negotiate an increase in the
price or to stall delivery to try to shake the customer out of the deal so
the vehicle can be sold to someone else at a higher price. Apparently
some dealers are saying they have a source for a special order
vehicle when in fact they have no idea when or if the vehicle
can be found or delivered. This is done to take advantage of
and to "set" a customer's "emotional investment"
in the product, price or service. Some dealers also come back
to the customer after the contract is signed and the vehicle
delivered, and try to add on extra costs, with the excuse or
plausibly sounding explanation that certain charges or options
were not included, forgotten, or overlooked in the original contract.
CARveat Emptor. It ain't necessarily over until its over...
- Obtain a copy
of a complete set of all deal related paperwork, including a
copy of the contract form and all other paperwork that the dealer
will expect to be signed at deal closing. Obtain this material in advance of
making a purchasing decision in order to review it completely
(including the fine print on the reverse) away from the dealership.
Just do this!
- Consider negotiating a better lemon law for yourself during deal negotiations. Most lemon laws are themselves lemons. Have you test driven or read one lately? Spell out under what circumstances the dealer and manufacturer will replace a defective vehicle in detail and have it signed and notarized by the dealer and the manufacturer. Remember, you may have to engage an attorney to enforce any written agreement or to enforce existing lemon laws. In California the lemon law needs only be considered, not necessarily followed to the letter, by the industry sponsored lemon law mediation board, which places the industry at an advantage over the consumer in lemon law disputes. Some auto sale issues attorneys take cases on contingency, and many attorneys are beginning to specialize in auto deal resolution services (Yellow Pages under Attorneys: "dealer fraud" or "lemon law"). When all else fails, pick up the phone and consider the legal alternatives to a sour deal. Check under Attorneys, Dealer Fraud or Lemon Law in your yellow pages. (http://www.freeadvice.com) (?)
Why A FEDERAL LEMON LAW Is Needed:
- Because State
lemon-laws are often unenforceable intra-state let alone across
state lines.
Moving to a new state? Will your lemony lemon-law migrate with
you? Buying a car in a neighboring state? Negotiate a signed
lemon-replacement agreement with the manufacturer (dealers don't
count) in writing and notarized in triplicate (FROM THE MANUFACTURER
!!!).
- In many lemon
law mediation cases,
dealers or manufacturers shop for mediators or arbitration "specialists"
who routinely rule in favor of the industry. Not a bad deal if
you can get it, eh?
- When the
dealer tries to sell you extended warranties during the manufacturer's warranty coverage
period,
find out how much the dealer intends to charge and deduct this
amount from your final offer, and ask why a good product and
a good warranty would need supplemental warranty during the manufacturer's
warranty period. Don't pay extra for overlapping warranties that
cover the same repairs during the same period unless you really
enjoy paying too much and don't mind inflating the costs of products
unnecessarily for others.
Do the same for new car depreciation (shine) costs and other deal add-ons and extras which the dealer tries to "sell" near closing the deal if possible when the consumer is most anxious to have the deal done and generally is most receptive to spending "a little" more on extras which should be included in any "value-priced" deal scheme. Expect resistance here too. But, make your offer and demand that floor mats and seat covers be made a part of the basic price of the car. Work with another dealer if the dealer you're working with is too stingy to sell you the whole car at a fair price, and make sure to have someone stay with the car while you are signing the paperwork, to avoid permitting the dealer to drain the gas tank or remove rear bumpers, trim or other items from the vehicle. _--IT HAPPENS! Did the factory authorize this?
- Consider
not buying a vehicle,
especially one
that the dealer or manufacturer will not provide you the opportunity
to use for thirty days prior to committing to a purchase or lease
agreement. Consider negotiating a thirty day return without question
clause in your purchase or lease agreement. Why should you, the
dealer or the manufacturer expect you to be able to make an informed
major purchasing decision based on a short, one-time test drive
with a dealership sales staff member on board pointing to all
the new features and leading you away from the vehicle's negatives
(every vehicle has negatives!)? Don't buy a car unless you know
its the right car for you and your needs and your budget. Repossession
and auto-remarketing is a growth industry too!
The tendency or prevalent auto consumer mistake is to overbuy, overpay, settle too soon on price, and to get dinged on undisclosed hidden damage or repair costs. Avoid overbuying. How can you possibly do that based on a typical fifteen minute test drive? Add this to your car deal checklist. Deduct a huge ding factor for dealers and manufactures that expect you to make a permanent eight year purchasing decision in fifteen minutes.
Buy down, rent uP!
- Consider
buying only as much vehicle as required to meet 90% of your personal
transportation needs. Rent a van or sport
utility vehicle when a special occasion requires more vehicle
than your normal driving needs require. Beware of the dealer's
need to sell-up, to sell you more car then you can afford or
need, or want and can afford or which you just "gottahave",
for more than its worth. Beware of, expect, and avoid the sell-up.
- Don't sell
the value of your services as a consumer short. Consider marking up your haggle or ding factor
50% to 100% in accordance with typical retail markups. Adjust
as needed for market variables and practical realities. Go for
more if possible. Remember, highballing up from your bottom line
is generally the way this is done. Know and keep your best alternative
to a negotiated deal (BAND) in mind. Be willing and able to walk
away. Perhaps the best way to do this is to have an acceptable
alternative vehicle in mind, or perhaps the more lucrative no-deal
option. Walking is the best deal alternative for most people.
Perhaps replacing the transmission or engine in an older model
is better than sucking on a new car deal mistake. If the dealer
says that he can wait you out, that someone else will come along
and pay more, make sure the dealer gets the opportunity to do
just that, as this suggests that the dealer may not value your
consumership.
Keep in mind that regardless of what the dealer has cleverly led you to say or commit to, you are free to walk away from any deal until you take possession of the vehicle, which usually means when you drive if off the lot. Before driving off the lot, check the gas tank indicator and other trim items. Is the bumper and engine still there? How about the tires, the spare tire, is it in the trunk? "Oh, we didn't understand that you wanted the windshield, bumpers and the engine too. Why didn't you say so." CARveat Emptor! Car buyer be very wary!
WHAT's NEW...?
Be particularly watchful for undisclosed defects or hidden damage
repairs on
all new (yes, "new") and used car deals, especially
negotiated profit deals. Be especially careful with vehicles traded between
dealers or vehicles represented as being "auto executive"
or "brass-hat" vehicles. Carefully inspect new cars,
especially along detail and design indention lines or other edges
or points or lines or change in materials for over-painting which
may indicate prior damage and hidden repairs. Check for uniform
clearances and gaps between doors and body panels. Have the dealer
raise the vehicle up on a repair shop jack you can inspect the
under side of the vehicle. Does there appear to be a clean and
neat or planned arrangement of systems and parts? Is the fuel
tank protected from side impacts by the chassis frames and the
rear and front axles? Are the brake lines protected from being
pinched between chassis frame and the axles.
Shabby or uncoordinated
underside arrangements of systems or parts may be an indication of poor design
or assembly. Have the vehicle inspected by an independent certified
body and repair shop. Improve and share good car buying skills,
abilities and knowledge with friends, family and associates.
Check carefully beneath detailing lines added to the finish.
Sometimes these detail finishes are used to hide repair or repainting
work. They often crack and peel after a few years, so don't pay
extra for such detailing gimmicks. Look at the entire exterior
painted surface. Try to see the surface of the metal and look
for uniformity in appearance and texture. One way to check the
quality of a paint job is to look at the uniformity and consistency
of the reflection of objects in the new surfacing. By inspecting
the vehicle carefully, panel by panel, to see the clear-coating
layer over the paint, the paint layer (is it uniformly applied
over a smooth and dust particle free surface?) and to see the
texture and consistency of the metal or plastic under the paint,
will help you avoid paying too much for quality problems and
mistakes.
Take a small
magnet to check for bondo repairs that may conceal hidden damage or repairs.
- Car dealing
has historically been handled like sex in our society, done but
talked little about publicly, or perhaps boasted undeservedly
about to boost one's bravado (its easier to boast of a great deal,
then admit to having gotten skunked on a car deal). People generally
say they got a great deal on their car purchase, but really they
spent hundreds or thousands more than the vehicle was worth,
and consumers are loathe to admit car dealing mistakes, like
no-one makes them...? The metaphor may be apt here as well, as
often parents forget to pass along good tips on car deal foreplay
or rough car deal sex (getting screwed) and so forth.
Practice safe CAR DEAL sex. Fifteen minutes with a good book or two on the subject of car buying will give you more guerrilla auto consumer ammunition in dealing with the dealer than 90-95% of consumers going into a dealer's showroom possess. Teach your children and parents well. Pass along good car buying techniques. Share tricks of the deal. Avoid unsafe or rough car sex. Again, "consumer protection is a life-long team sport." Avoid unsafe car deal sex! Unscrew the deal and consider the alternatives before buying.
- Learn how
to complain effectively. Only 4% of aggrieved consumers bother to complain,
and many who do complain do so ineffectively.
- Use appropriate
transport modes for
short, medium and long distance travel needs: walking or bicycling
or electric cars are perhaps best for short hauls or trips; cars,
bicycles, bus or car pooling for medium length hauls or trips,
and public or private transit for longer hauls or trips. Develop
a lifelong personal transport plan.
- Be particularly
wary of buying so called "sport utility vehicles" (SUVs). Consumers are paying
premium prices and loan costs (interest) for sporty mini-vans,
pick-ups and sport-utility vehicles which seldom are used for
their intended purposes or capacities. These vehicles are in
a special "not-a-car", "not-a-truck" category
which exempts them from many standard sedan safety and bumper
requirements. Some SUV's are reported to be high roll-over or
stability risks. Narrow (side to side) and short (front to back)
wheel based, high center of gravity and top heavy vehicles may
represent a higher instability or roll-over risks, especially
in high speed cornering, evasive maneuvers, or when struck by
another vehicle from the side. Anyone who tells you otherwise
is likely a car dealer or manufacturer.
Sport utility vehicles (SUVs) are notoriously unstable on cornering and subject to flipping or rolling over. (You paid extra for that...?) The Federal Government recently caved in to the industry, failing to require sport utility vehicles be made safer in consideration of the fact that these vehicles are increasingly used by families. These vehicles often exceed environmental standards required for standard sedans which are regulated.
- Beware of
so called All Wheel Drive (AWD) vehicles which many consumers discovered after
purchasing are not warranted for off-road use. All Wheel Drive may
not mean four wheel drive. The Suburu Outback is one such AWD
vehicle which is not a conventional four wheel drive, off-road
vehicle. Some AWD vehicles owners have found out too late that
they have voided their vehicle warranty by driving off-road.
- New traffic
sign: "Caution, Go Slow, Your auto-consumer friendly government
at work again helping auto industry fleece consumers?" Whatever
traffic allows. Until push comes to tow, and consumers demand
better treatment from the industry and their government, consumers
are what's for dinner. Beef: its what's eating us...?
- Consider
buying a smaller or more practical vehicle ( do you really need that global blast
furnace or would the smaller global warmer meet your real needs?)
without sacrificing safety and comfort and renting a van or sport
utility vehicle for special occasions and purposes when needed.
Larger more expensive cars are not necessarily safer than smaller
or mid-sized cars. Verify crash test data to determine general vehicle
safety, and remember safety tests do not test for all possible
real world accident situations and conditions. Include safety
factors in your personal pre-car deal inventory checklist and
priority evaluation.
- Consider
a better investment. Instead
of paying $20,000 to $40,000 or more for another car deal mistake,
do yourself a favor and put that 20 to 40 thousand bucks or more
into an interest bearing, socially responsible CD or other responsible
investment for education or retirement or for charity, instead
of rewarding this industry for its traditions of anti-consumer
sloth. The Car Book, by Intellichoice is another publication
available at bookstores or libraries which contains consumer
choice information based on seven consumer value categories for
various makes and models of vehicles. CARveat Emptor! Check your
sources and your sources' sources.
- Consider
planning your new car purchase well in advance of your needs when possible. Postpone
buying as long as you can, but give yourself plenty of time to
leverage (wait out) a deal -- six months (minimum) to a year
or more... be willing to wait -- its the best negotiating chip
a consumer possesses, besides one's two feet. One year old new
cars on the dealer's lot should be a better deal, minus new car
depreciation, rebates and other manufacturer and dealer ding
deductions, of course.
- Target and
practice your negotiating and guerrilla car consumer walking
and flying skills
on a few dealers to
get the feel for the deal again if its been a few years between
purchases or just to sample the salesmanship of the dealership.
You can always buy later, and a "new" year old model
is less expensive than a "new" new model just off the
assembly line -- don't buy the depreciation costs... A new car
is just an old car waiting to happen, waiting to lose its shine
or depreciation value. If you are lucky you won't end up with
an expensively defective "new" car, and you won't get
taken for a ride on warranty or other repair work. If, you are
lucky.
The best warranty or guarantee in the world won't protect consumers from the tricks of the Great American Car Deal, including industry after-deal indifference or avoidance. Many consumers have discovered after purchasing that their concerns are ignored or put-off by dealers or manufacturers. The number one consumer complaint, based on the total number of consumer complaints filed with consumer protection agencies and non-profits involves automobile deal and service issues. Government is supposed to be responsive to such issues, but apparently your government has been studying the tricks of the Great American Car Deal in responding to auto consumer issues, and ignoring it. Make sure your local, state and national representatives know how your feel about the tricks of the Great American Car Deal that costs our friends and families tens of billions in unearned profits and costs every year. Fairness apparently is too much to ask?
- The technology
has existed since the invention of the wheel, but apparently due to the automobile
industry's unwavering commitment to customer service, odometers
remain tamperable. Useless headlight wipers, but no tamper-proof
odometers. Now, we're talking real deep customer service.
- Test drive
the dealer! Target
& practice your Guerrilla Car Consumer skills on a few dealers
before deciding to deal or buy. Feel out the dealer's sales strategies
and tactics. Listen with a silent but critical ear to the sales
pitches. Do a few dry runs to get in shape and to become more
accustomed to dealing with the dealer and to build up self-confidence
and to sharpen your guerrilla car consumer "walking"
skills. Because most car buyers buy a car only once every several
years its easy to get out of practice and forget just how much
of an ordeal buying a car can be, or how much fun, depending
upon your perspective and dealing skills, knowledge and abilities.
Auto consumers don't have to get taken for a ride every time.
- Remember,
car salespeople who have practiced their "craft(iness)"
for years, ten
to fourteen hours a day, seven days a week will be formidable
in manipulating a consumer's focus and concentration toward the dealer's
agenda and away from the consumer's agenda of highest value for
the lowest price. Don't let the dealer lead you to over focus
on any aspect of the product, including price unduly to draw
your attention away from the value and costs of the entire deal.
A common dealer sales trick is to plant sales rhetoric or spin
in the subconscious of the consumer. Keep reminding the dealer
of your value as a consumer, and keep asking whether the dealer
values your business, and if so, why he or she is not more forthcoming
in demonstrating it. If the dealer suggests that he can get more
from another customers, walk and let him.
- Specify that
you are (if you are) negotiating for a complete, new and defect-free
new car,
as if this is not stated (and even in some cases when it is--be
car-ful) dealers may assume that a slightly defective car passed
off as new and defect free may be permissible (hey, there's no
law against it), or things like gasoline, bumpers, trim or other
items may be removed between test drive and drive off. (Say,
Mr., Mrs., or Ms. Dealer, does the deal include the engine and
tires, or are they optional on this deal?).
- Also, be keen to your interpersonal or consuming style. Are you assertive (not necessarily aggressive) with others or are you passive-aggressive, or what is known as "other people oriented", which means simply that you often agree with others and derive your world view and general demeanor or life focus from others rather than from inside, from yourself? Assertive people tend be less likely to be taken advantage of by dealers or others, but even assertive people can be tricked by savvy car dealering. Yes, Mr. Macho car buyer, you've been cheated on car deals before, even if you were not aware of it. "Other people oriented" people are at greater risk of being taken for the Great American Car Deal Ride.
Being aware of your interpersonal style should help you adapt to the degree necessary to avoid being manipulated in a car deal or lease. Studying negotiating strategies and textbooks is a good place to begin assertivizing your interpersonal style. Its worth the effort and time, and will pay dividends in other areas of your life as well as car dealing. Prioritize this, and drop by your library and pick up a book or two on the subject of negotiating soon. An introductory textbook on psychology may also be helpful. Be assured that auto manufacturer advertising agencies have a psychologist on retainer to tweak advertising content to push the inner buttons of your psyche. We're not just talking apples and oranges here. We're talking the many differences between granny smiths and golden deliciouses.
- It was recently
reported by the San Francisco Chronicle in a story about the
costs of development and growth, that the average California automobile commuter
spent one of every five dollars ($5 : $1 ) of their incomes on
car ownership. One in five dollars
over a lifetime is a hefty piece of change! 20%.