Buying a new car is a long and exhausting process most of the time. You have to compare and contrast different models or different sellers and get the best deal. In the world of car selling, anyone and everyone have an opinion, which means that there are a number of myths that now exist.
Here are five common myths which you should dump before going out to buy a new car:
- Cash payment is better:
While some dealers may give incentives to customers paying in cash, for the customer this may not always mean a better deal. Most dealerships today try to get you to finance cars, instead of buying them at retail price. This is because if you pay by cash, the dealers may be less motivated to give you a discount on the selling price. But if you prefer buying with cash, then it may be helpful to buy on an occasion when the sellers are holding a cash-only incentive special.
- Don’t mention your trade-in until the price is finalized:
This is one of the oldest tricks in the book, but it can end up with you being at the dealership for hours on end and does not have much of a success rate either. Salespeople know that this is a method used by customers for bargaining the price of a car, so waiting till the end is a bad option since the whole deal is discussed before the final trade-in. Because of this, it is better to categorize the deal and know what the real worth of the car is and then make an offer close to that. If you save it for the end moments, you may not also get as much of a discount as you had expected.
- Using a “game theory” approach:
This entails calling a sales manager and telling him that you have an hour to buy a car and you want to know the lowest price he will offer. While this may seem exciting in theory, it is more complicated as all the dealerships are informed about their competitors and you will not be able to pit them against each other. You may try to put the salesperson on the spot, but they may outsmart you. It’s better to use a non-confrontational approach when buying a car.
- Out-negotiating the dealers:
One scenario of this is if you bring a cashier’s check for an amount and tell the seller to either take it or find another customer. However, in such a case, you may be forgetting a few factors like fees and taxes for a vehicle, and what kind of figure the dealers may consider. Another factor will be that the dealership may even have given you a lower price than the one you quoted. So unless you work at a dealership, you may not have the same negotiation experience that they do. Instead of trying to negotiate, you can ask them about their deals and any specials they have, and then try to adjust yourself around those figures.
- A lower price means a better deal:
This may not always be the case, especially when you are leasing. You may end up paying more during the lease period, or the car terms maybe for longer than you anticipated. In any case, it is better to consider all factors of a deal and not just its numbers to help you make a final decision.