How do I find where to buy used cars?
You may not be aware of it, but car dealerships make more money from their used inventory than their new cars. Why is that? The simple answer is margin. While a new car has a set profit level affixed to it by the manufacturer, a used car’s margin is the difference between the lowest price they can get away with paying for the car and the highest price they can get you to pay.
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What is a Reputable Car Dealership?
Unfortunately, it isn’t always an honest game. Finding a reputable car dealer from whom to purchase a used car often takes research, not just into the vehicle you intend to buy, but also into the dealership itself. What is their track record of customer service? Do they have specific policies with regards to used car sales? Many times, you may find that “no haggle” policies, while being relatively effortless to deal with, are not in your best interest.
Begin the process of selecting a dealership by researching the vehicle that you intend to purchase. When you determine this, take a moment to enter your zip code here for an online comparison of car insurance rates. In this way, you can settle your financial needs with regards to the vehicle before you even set foot on a dealership lot. An easily swayed customer is one who isn’t sure what they want. They can usually be steered into buying a vehicle that they don’t need and may not be able to afford.
Using the Internet
Use an online vehicle locator to find the dealerships in your area that offer that vehicle. This will allow you to put together a list of potential dealerships. In the list, you will find dealerships that are honest and unscrupulous. Because these vehicle locators seldom ever provide meaningful feedback to future customers, you’re going to have to dig deeper than the price and selection that a particular dealership might offer. Some good sources of buying advice come from:
- Better Business Bureau
The first three options rely largely on word-of-mouth advertising, which many of the most honest dealerships scrupulously maintain. Customers of these dealerships tend to rave about everything they experienced at the showroom, from the salespeople’s attitude to the selection of free doughnuts and coffee. They may even point you to a specific salesperson with whom they had a positive experience.
Auto sales is largely a commissioned profession, meaning that sales determine the salesperson’s take-home pay. They’ll work hard to cultivate trusting relationships with their current clients in hopes that their clients will refer future business to them.
Using the Better Business Bureau
The Better Business Bureau is an excellent resource for consumers to turn to when they just aren’t sure about a dealership’s reputation. It may be necessary to consult this source if you are new to an area or if no one you know has experience with the dealership that has just the vehicle you want or need.
Buy Here Pay Here Dealerships
A word of warning, though. Small dealerships that advertise “Buy here, pay here” specials are generally honest, insofar as to be honestly trying to separate you from as much of your money as possible. They may have just the car you need on the lot, and that $99 down and $99 per month car payment may sound good, but their interest rates could leave you paying for the car well after it has been sent to the scrap yard.
Some buy here pay here dealers have been known to charge 25% or higher interest rates, with significant pre-payment penalties to prevent you from getting out of paying the full amount of the loan in addition to the interest. Carefully consider the pros and cons of such a deal before you sign any paperwork. You might find yourself much better off with a large dealership or an auto auction.
Cutting a Deal
Once you’ve found the right used car for you, it’s time for some wheeling and dealing. Even if the dealership advertises a “no-haggle” buying experience, the salespeople have some wiggle room.
One trick that many salespeople use is to quote a set price and say that it’s as low as they can go. If you’re trading in your car, you probably don’t have possession of your keys. Instead, they’re laying on the sales manager’s desk. The trick is that if the salesperson can close the deal as-is, no intervention is needed, and the contracts can be signed.
If you don’t “take the bait,” the salesperson then has a built-in reason to excuse himself and let the sales manager know what’s happening. Then, the manager will appear with your keys in hand, and ask you what you liked or disliked about the vehicle, the deal and the dealership. You may say nothing at all, but they’ll then ask you what they can do to close the deal today. If this is the case, quote your terms. As long as it’s a fair price, you’ll find yourself driving away in just the vehicle you wanted, and at just the right price. Be sure to compare car insurance rates with our FREE comparison tool below!