Car Buying Articles

5 Questions To Ask Before You Say Yes to a New Car Deal

How To Spot Issues That Could Sour Your Purchase


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    Before you say yes to a deal, make sure it's a solid one. Ask these key questions. | September 06, 2011

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"So, do we have a deal?" the salesman says, extending his hand.

Wait! Before you agree to buy that new car, take a few minutes to ensure there are no hidden problems that will surface when you're in the middle of signing the contract. This also is your last chance to use your leverage to sweeten the deal a little more.

These questions are "deal testers," a way for you to verify the terms and unearth any problems. The list includes two questions specifically for people who did most of their shopping via the Internet and are making a deal over the phone without having seen the car. (We highly recommend the Internet car shopping route since it is faster, less stressful and will often get you a better price.)

So instead of saying, "Deal," ask these questions and you will head off problems that could flare up later.

1. What other fees will I be charged? Another way to ask this question is, "What's my out-the-door price?" Up to now, you have probably been negotiating the price of the car only. You will, of course, be required to pay additional fees, some of which are legitimate and some of which might be questionable. Legit costs include sales tax, registry costs and a documentation fee. Some dealerships, however, tack on additional fees as a way to build profit back into the deal. The sooner you find out about these fees, the better you can avoid them. Read more in "What Fees Should You Pay?"

2. How much is your documentation fee? All car dealers charge a documentation ("doc") fee when you buy a car. This means they actually charge you for filling out the contract. It seems strange, but it's universal. What isn't universal is the amount dealers charge for the doc fee. Some states cap the doc fee, usually below $100. Other states don't regulate the doc fee, so it can be as much as $600. If you think you're getting a good deal, it could be because the dealer will charge a large doc fee later on. Find out the amount early and negotiate the fee down to a reasonable level. If the salesman won't budge, say that you'll take your business elsewhere.

3. Are there any aftermarket parts or alarms on the car? Most cars come with options installed at the factory when the car is built. But sometimes the dealer adds items as a way to boost profit. Popular add-ons include mud flaps, aftermarket alarms, tinted windows or the ever-popular "paint protection package." These are called dealer "add-ons" and the mark-up can be quite steep. An increasingly common add-on is LoJack, a vehicle recovery system. Dealers often add the system's cost to new cars without telling the buyer, who discovers it when he reviews the contract. We're not saying you should never buy a car with dealer add-ons. But you want to know about any add-ons well in advance. Know that these are profit centers and negotiate accordingly.

4. How many miles are on the car? This is particularly important for Internet shoppers who might not have seen the car yet. You would think that every new car has less than 10 miles on the odometer. But in some cases, the car might have gone on a lot of test-drives or is a "dealer trade," meaning that the dealer traded another car for it and it's been driven in from another dealership. If there are more than about 300 miles on the car, you need to negotiate a lower price.

5. Can you deliver the car? This is another great question for Internet shoppers. If everything else in the deal looks good, and you haven't yet said yes, you could ask for this one last little perk. Say something like, "Well, if you are willing to deliver the car, then we have a deal." Instead of going to the dealership and waiting while the car is washed, gassed and prepared for delivery, why not stay at your home or office and let the dealer bring the car to you? A dealer representative will arrive with printed contracts and you won't get sales pitches from the finance and insurance manager for extended warranties and other items and services. If you think you will want one of the extras offered by the finance manager, you can always speak with him by phone and have the contract adjusted accordingly.

Bonus question: Is the car on your lot? If you tell the salesman that you don't want a car because of its color or options, he'll quickly answer, "We can get you the car you want, no problem." It sounds like he might have the right one out back, or in another lot. In fact, he is planning to do a dealer trade for the car. This isn't necessarily a bad thing, but it means the car isn't immediately available and the terms of the deal could possibly change. If you have a high degree of confidence in your salesperson, go ahead and let them do the legwork to get the car for you. But it's sometimes quicker and cleaner to deal with the cars that the dealership has on its lot.

Comments

  • josephrios josephrios Posts:

    There are only Three things I would correct on this article.... being a Salesman myself. #4, #5, and the bonus. 4 and the bonus fall under the same category, With the reduced inventory of all dealerships the vehicles are not only hard to get a hold of but will tend to start having more miles. You shouldn't let the vehicle not being there slow you down, because any dealership that is willing to go Out of there way to get you exactly what your looking for is doing exactly that, going out of there way, and those are the kind of people you want working with you. I am a big advocate of buying from people you trust and buying locally to keep your local economy healthy and these two don't take some of those important things into account. If you like where you live you should definitely buy local, that way your tax dollars go back to your teachers, roads, police etc. Can you deliver the car? not usually... at my dealership we do not have an insurance manager and business manager doesn't pitch anything, what he does do is let you know what the options are for taking care of your vehicle. better advice than this is to bring a book and eat before you come, if you are worried about buying something you don't need then do some research online.

  • taylorgang taylorgang Posts:

    there is several things I would suggest be corrected . 1. Like If you asks if a paticular care is on the lot, and they don't have it, then let the dealership trade to get you the car you want. Its a SERVICE !!!!! that dealerships provide. let the dealership get it they have to pay a driver and foot the gas expense and Hwy tolls if any. So what if it has 200 miles on it once you get it, it dosn't matter anyway because the 3yr 36k miles starts at the 200 mile mark. If there are any fees they will be disclosed on a form call a disclosure sheet, that has all the fees and out the DOOR PRICE!!!! ,that you sign after you carefully READ. All this crap about surprises only comes when a buyer wants to get something added and thinks its free because they have purchased a car. Deliver a car PLEASE THIS IS A $20 TO $30 THOUSAND DOLLAR PURCHASE. if I buy a car I want to inspect it before i drive it off the lot. plus If I have any question I want to talk to the manager or the owner to get a good understanding, If they offer you other products thats fine JUST REMEMBER YOU CAN SAY NO!!! DAH!!! As far as extras on a car or if the dealer puts something on the car it is usally on added on the MSRP sticker. However , if you got up off your lazy behine to at lease go look at the car or truck you could ask question as to why the extra equipment. Iam just saying car buyers

  • karenbrwon karenbrwon Posts:

    I have a comment to make on the "can you deliver the car". Being in the business for the past 20 years (Finance), I highly recommend a customer to come into the dealership. The dealership view it this way, how do we know who is really signing the contract? We verify information with the customer to be sure someone hasn't stolen someone else's identity. Don't be a victim! Dealerships sell product in finance to protect the customers investment; we customize packages for the customer and their driving needs. The other one is the doc fee...this is not negotiable, the dealership sets a price and all customers pay for it even the employees. If we reduced the price for one customer then its discrimination to other customers who paid the price stated on the purchase order. Yes all dealers charge a different amount however they are comparable to one another. Call your local dealership and ask what is the cost of the doc fee? If you're like most customers, you've done your homework and at this point know what your paying for the car so don't let a couple hundred dollars stop you from purchasing the car of your dreams.

  • jscullin jscullin Posts:

    In reference to #2, in many states dealers must charge every client the same amount on the administrative or documentation fee. So to walk away from the car you want over a legal requirement doesn't make sense. Ask if they will discount the car to make up some of the cost of the fee instead of flat out refusing to pay it.

  • marvinlee1 marvinlee1 Posts:

    I disagree strongly that implication of "If there are more than about 300 miles on the car, you need to negotiate a lower price." Anything more than about 25 miles should arouse your deepest suspicion and a strong demand for explanation and compensation. Consider this: Cars are at their most vulnerable to driving abuse when they are brand new. Moving parts have not had time to break in, the factory manual may demand strict operation within temporary RPM limits, and harsh usage may create undetected hot spots and hidden damage deep within the moving parts. A few or even seconds of "see how high the engine will rev" can cause problems a thousand, ten thousand or even fifty-thousand miles down the road. Possibly long after the warranty has expired and you are left with zero proof for your suspicions. When your new car has been misused for demonstration drives to prospective customers, you had no control over who has driven it, how fast it was driven, whether or not the engine received warmup before maximum acceleration attempts, or the skill and caring of both the driver and any accompanying salesperson. Neither one are ponying up the money to buy your car: you are. One of the biggest scams in the car selling industry is to use a new car as an undocumented demonstrator. If that practice is fine with you, great! It is your risk. It should not be the risk of any other buyer who wants a truly new car, not a slightly used demonstrator that comes without any documentation of how those "300 miles" referred to by Edmunds as an acceptable limit. It is a bitter injustice to sell a car as "new" when in fact it has been used as a demonstrator.

  • scion76 scion76 Posts:

    Now I am a salesperson for the past 10 years. I work for a local Toyota dealership. Now, with regards to a few things, buyers AND Edmunds should understand. Q1: this is a very appropriate question. There are still "old school" dealer ways where charging excessive fees are done, in order to recuperate profit lost. NYS dealerships will charge DMV ($250avg) but portions are refunded back to the customer, because it is illegal for NYS dealerships to profit on DMV fees. That is why this and these other fees are not taxed by the state. Then there is also, NYS Doc ($75), NYS Inspection ($10) and NYS Tire recycling fee ($2.50 per tire). Then there are other possible fees, such as bank acquisition fees, for leases. This is standard and often misunderstood. This is NOT a dealership fee. So threatening to go somewhere else that doesn’t charge this is moot, because it’s the financial institution. Whether Toyota, Nissan, Chase, HAN, etc. Q2: follows suit to question 1. NYS is one of the states that “cap” dealerships, regarding state documentation fees. NYS is only $75. So walking away from a deal for something so small is kind of silly. What, why not discount the vehicle? If we negotiated a deal, we have already set a fair price. Fees are not profit, at least not in NY. Q3: Like someone pointed out in their comments. You should ALWAYS go to the dealership. Using car buying programs are good and all, but you should work with vehicles that are in inventory. Yes there is the option of getting a car for a client, if necessary. However, you will get a better understanding of the average sticker price of a car that actually exists. Often car buying programs that do NOT reference a dealership’s vehicle can NOT be used as a bible of how “cars should come.” Whether foreign or domestic, cars are built with regards to standards, within a region (NE, SE, SW, Central US, etc…). IE: wanting a very specific 4WD/AWD luxury vehicle, when you live in Texas or Florida, when most of the ones being built only come as 2WD, or vice versa in NY, or NJ. Q5: You can’t complain if you didn’t inspect the vehicle, if there is damage on a car. What happens if the car was chipped or in an accident when being brought to a buyer? I’ve seen dealership delivery waivers that absolve a dealership of any responsibility, should this happen. We don’t have any such thing at my place. Most of our customers, if not all, want to come and look over the car first hand, before taking it home. This I strongly recommend. Places that offer to deliver to you, such as luxury dealerships, have an additional fee (which includes shipping insurance) to transport the vehicle to you, but only after all paperwork are signed. The only thing is the shipping receipt, of course. Seriously, is it worth spending $500+ to deliver a car you can pick up on your own, if it means a couple of hours of your time? Hey, if you have money like that, then God bless. Not to mention what Karenbrwon said, in her comment. Identity theft is very big right now, and dealerships do not want to be fined by state or federal regulators. Bonus: This may happen. A vehicle may not be available at the time of your inquiry. If the dealership thinks it can be gotten for you, within 7-10 business days, then why not? Of course this may change, if it’s at the end of the month. Remember Dealerships do not set “Special” Manufacturer rates and rebates. The banks and manufacturer do! So don’t take it out on your sales person, when all they’re trying to do is earn your business. If you feel something is shady then, by all means, be wary. If you want to buy from someone reputable, then do your research! If you can research a vehicle, then a dealership and it’s personnel shouldn’t be any more complicated. By the way, lots of dealerships do NOT have drivers to go pick up a car. My dealership we, the salespeople, will go and get the vehicle for you. So that is time off the sales floor. And, if that happens, that is less opportunity to sell vehicles. It is actually not in the best interest for a dealership to do this. So why wouldn’t they not want to sell the car for less? No offense but sticker price is not ripping you off. That is the price the manufacturer feels is a fair purchase price. IF you have a business, and you are requested to special order a product for someone, eat the additional shipping price for expedited shipping, sell the product for cost, clean, inspect/assemble, then possibly deliver it, at no additional cost, technically your business is losing money. If you get a minor kickback or incentive from the product manufacturer, is it enough to cover the additional costs you incurred, not to mention your overhead? In another article, Edmunds talks about “Holdback” If a dealership sells a vehicle for cost, holdback would be used to cover overhead expenses. (Gas, electric, water, car wash, heat, cleaning facility, paying personal etc, etc.) do you think $300-$600 covers all that? Yes there’s a law of averages, but if everyone is trying to negotiate cost and less holdback, do you really think a dealership is profiting? Fair business is fair business. We are in a capitalistic society. Profit is supposed to be earned. And, as another comment said, this business should be kept locally. Of course, this is why you should look for proper customer service. If you are going to spend money, at least be treated properly. just saying.

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