Winter 2007 USAA.com Magazine

CAR-BUYING
You don’t have to choose between the car you want and a stress-free shopping
By Sean McCollum • photograph by rick dahms
winter 2007
6
usaa.com
Ma r q u i s w i l l i s has seen the underbelly of car sales. And it’s not pretty. After six months in the business, the 24-year-old
Florida-based USAA member got out. Now, he’s sharing his experiences to help you the next time you’re in the market for a new ride.
1
Pack your papers. When
customers showed up with printouts
listing market values, trade-in values,
financing options, rebates, and other
information they'd gathered, we knew
we wouldn’t make much money off
the deal. So, arrive at the dealership
with research in hand.
5
Wear your poker face. To get
the best deal, act as if you’re not quite
ready to buy. I sold a car to a young
engaged couple who both worked. The
woman really wanted a new Mustang
GT, and I could tell after the test drive
that she loved the car. At that point,
she lost all her negotiating leverage.
9
Don't fall for last-ditch deals.
Sales managers sometimes make departing
customers an offer so low, no
one else can match it. This is usually
just a ploy to get them to come back.
Call their bluff and you may come out
a winner. But if you leave, don't expect
the offer to be there when you return.
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2
Know the score. Dealers make a
lot of money on financing. Being ignorant
of your credit score and borrowing
options can be like handing them
a blank check. A point or two of extra
interest adds up over time. When you
have preapproved financing, it shows
you’ve done your homework.
6
Stick to your budget. A car
payment and expenses, including
insurance and maintenance, should be
12 percent or less of take-home pay.
New cars depreciate quickly. You may
soon owe more than the car is worth
(being “upside-down” on the loan). Avoid
this by putting at least 20 percent down.
10
Avoid trade-in shenanigans.
A customer wanted to trade in a car
worth $7,000 for a new car. The dealer
discounted the new car but offered
only $2,500 for the trade-in. In the
end, the dealer came out ahead. Always
nail down the new car price before
discussing your trade-in.
3
Look the part. If you’re dressed
too nicely, the dealer might think you
have money to burn. Too sloppy You
won’t be taken seriously. Choose something
casual, clean, and unwrinkled.
7
Draft a quarterback. That’s the
nickname dealers have for someone
who comes along to coach you. The
big thing in car sales is building rapport
with customers. A sidekick can
run interference, and the salesperson
can’t be as aggressive.
11
Avoid yo-yos. You finalize the purchase
with dealer financing and drive
the vehicle home. The dealer calls
later to say the financing fell through
and you need to come back. When
you return, the interest rate is higher.
To avoid this, arrange for financing
before you ever hit the lot.
To research new or used car prices, log on to usaa.com/magazines and click "Car-Buying Service."
4
Skip the add-ons. This includes
service contracts and extended warranties.
Know clearly what you need
and want by doing research beforehand
— online and on the lot. If you
buy an extended warranty, read carefully
the sections that include items
not covered.
8
Never believe the sticker. The
sticker price of a car isn’t the actual
price. There’s always room to negotiate.
I sold a $50,000 Ford F-250 pickup
to a couple who paid the sticker
price and never even tried to cut a
deal. The truck had about an $8,000
markup so I had room to negotiate.
12
Inspect before you buy. When
shopping for a used car, take your
potential purchase to your mechanic
for an independent inspection. A
good tech will spot hidden problems.
Independent inspections usually run
$75-$100. It’s the best 100 bucks
you’ll ever spend on a car.