October 8, 2017
- Know the Numbers – When negotiating the price of a used car, or the amount of a trade-in allowance, you are probably giving away thousands of dollars if you don’t know the actual value of the vehicle. Any competent dealer is well aware of the value and you should be too. Overpricing of used cars and undervaluing trade-ins is a very common ripoff. It’s very easy to find out. You can go online to either the Kelly Blue Book or the NADA website, put in the make, model, year, and mileage of the vehicle and find out what the current value is. Keep this number in mind as you negotiate the purchase or trade-in price. If the dealer won’t give you a fair price, then you may want to shop elsewhere.
- Have the Vehicle Inspected – Any reputable dealer will allow you to take the vehicle to an independent mechanic for an inspection. Used vehicles can have hidden problems that are easily spotted by a trained and experienced mechanic. Pre-purchase inspections are generally inexpensive, don’t take long, and can save you from unexpected heartache and expense in the future. Some buyers mistakenly believe that the law provides a 3 day inspection period for car purchases. In most cases, the moment you sign the contract, you are bound to the deal.
- Shop Your Financing – Dealer financing can be convenient, but it can be much more expensive than what you can negotiate on your own. This is one of the most common areas where buyers get ripped off. Dealerships have an incentive to sell you financing that has a higher interest rate than the creditor actually offers because they often have arrangements that allows the dealership keep the additional interest. Remember, financing is a product that you’re buying, so shop around and get the best deal possible.
- Don’t Sign Any Blank Documents – Unscrupulous dealerships will sometimes ask buyers to sign documents that the dealer hasn’t signed or that contain material terms, such as price or down payment, that are left blank. This leaves the buyer very vulnerable to fraud if the dealer completes the document with terms that are different from those negotiated with the buyer. Also, another common practice by dishonest car dealers is to obtain the buyer’s signature on sales and finance documents while also taking in a trade-in vehicle, then telling the buyer that there is a problem with the deal, and that the dealership isn’t bound to the contract because it never signed the papers. Lastly, always demand that the dealership provide you with a copy of any document you sign.