How to Avoid Being Scammed by a Used Car Salesman
Don't be ashamed, you know you've done it. You get all excited about
the brand new (or used) car you're about to purchase when suddenly it
hits you, as the salesperson says "Congratulations, you bought yourself a
new car!" You're happy, but you're thinking "Did I just get snookered?"
So how do you know if you're getting a good deal on a used car or if you're getting "scammed" by the salesman? Simple: Do your homework. Over the years, I've bought and sold many cars and I can tell you that there is definitely a right way and a wrong way to do this. Let's identify 3 things you should never do when buying a used car and 3 things you should always do. We'll stick to buying rather than leasing as leasing is a different animal all-together. Of course this is by no means an exhaustive study on car buying, but take heed of these few, simple pointers and I guarantee it'll improve your chances of having a positive used car buying experience.
Things you should NEVER do:
1. Never negotiate price based on the monthly payment you think you can afford.
WHY NOT: Car salesman absolutely love knowing how much you pay (or are willing to pay) each month for your car. If a salesperson asks how much you can afford, don't give an exact number. If you do, you'll quickly give up control. Remember, negotiating is always about who has the control. So, let's say you're paying around $350/month for your 4 year old clunker. If you divulge this information, expect a good salesperson to ask "Is what you're paying now comfortable or can you afford a little more?" He (or she) is trying to gauge how much "flex" you have in your budget. This is not a good way to negotiate the best deal. Have a number in your head of what you can afford before you even get to the dealership, but never let on how high you're willing and able to go. This can hurt your leveraging power later on in the price negotiations.
2. Never discuss your trade-in details before settling on a price for your new car. WHY NOT: Car salesmen are trained to ask "so how much do you want for your trade?" If you're trading in your old car for another one, don't discuss your situation until after you've settled on the price of your new car. The reason is because the dealer will try and confuse things by working a deal on both ends simultaneously. Car dealerships make money on both the "front end" (the price of your new, used car) and the "back end" (the value of your trade-in). You'll almost always lose if you tell the salesperson upfront that you're trading in your car. When asked, simply state that you would like to discuss this if you find the car you want and after you find out the price of that car. Once you agree on a price for your new wheels, it's okay discuss your trade-in.
3. Never be afraid to walk away from a deal.
WHY NOT: Most salespeople understand that many of us are "emotional buyers". We see something we like and we've got to have it. Buying a new or used car is exciting. It's fun to envision ourselves driving around in a new ride, but you have to curb your emotions or you'll be easy prey for a savvy car salesman. If you've done your best negotiating and are still not sure you're getting a good deal, just get up and walk away. I don't care if the salesman tells you "I can't hold the car unless you leave a deposit." Don't be pressured! If you need some time to think it over and someone else buys your car, than maybe it just wasn't meant to be.
Things you should ALWAYS do:
1. If you saw a specific used car advertised, always bring the ad with you.
WHY: Dealers hate it when you walk into the showroom with an advertisement for one of their cars. The reason they hate it is because they MUST honor what's written in the ad. Many dealerships use low-ball or "teaser" ads to get you in the door, then try and push you into a more expensive vehicle. A smart buyer should have none of this. If you see a certain car advertised for a certain price, bring the ad with you if possible. Just be aware that many salespeople try hard to squirm out of 'ad-cars'. Expect to be steered away from a car with a too-good-to-be-true advertised price and into one with a much greater profit margin for the dealer.
2. Always know beforehand how much you can really afford.
WHY: We touched on this earlier when discussing why not to disclose how much you can spend monthly on a car. It would seem like common sense to assume that most people don't pay more than they can afford for an automobile, but history shows that this isn't always true. Cars are repossessed, impounded, auctioned and abandoned all the time because the people who purchased them couldn't afford them. Car buying is certainly an emotional experience. If you find yourself falling head over heels for a vehicle, recognize that you might be tempted to pay more than you've budgeted. The best way to avoid this is by taking your emotions out of the process. Instead, treat car buying as a business transaction. Before you begin your search , know exactly how much car you can and cannot afford and then stick to your guns. Don't tell anyone at the dealership know how much you are willing to spend and don't ever let a sweet talking salesperson coerce you into making a move you may regret after the "newness" of your car wears off.
3. Always do your research before going to the dealership.
WHY: How do you know if you're getting a good deal or not? A good place to start is by knowing how much the car you want to buy is selling for elsewhere. Before you go shopping for a new hot rod, check and see what's out there. Whenever possible try to compare apples with apples. (Price comparable cars to the one you want). A comparable or "comp" car is one that has roughly the same options, trim level, mileage and overall condition as the car you want to buy. There can be significant price swings between similar cars of different trim levels. For example, you may see a five year old Mustang advertised for a ridiculously low price. However, if you want one that actually goes faster than a '76 Pinto with two flat tires and a blown transmission, then you'll need to buy a Mustang GT. Oh, and expect to pay 20-40% more for the GT model. The point is that you should always investigate and find out all you can about comp cars. Know the options, different trim levels, engine choices, price averages for your area, etc. This way you'll have some idea as to what you can expect to find and whether or not you're getting the deal of a lifetime on the car of your dreams. Good luck!
So how do you know if you're getting a good deal on a used car or if you're getting "scammed" by the salesman? Simple: Do your homework. Over the years, I've bought and sold many cars and I can tell you that there is definitely a right way and a wrong way to do this. Let's identify 3 things you should never do when buying a used car and 3 things you should always do. We'll stick to buying rather than leasing as leasing is a different animal all-together. Of course this is by no means an exhaustive study on car buying, but take heed of these few, simple pointers and I guarantee it'll improve your chances of having a positive used car buying experience.
Things you should NEVER do:
1. Never negotiate price based on the monthly payment you think you can afford.
WHY NOT: Car salesman absolutely love knowing how much you pay (or are willing to pay) each month for your car. If a salesperson asks how much you can afford, don't give an exact number. If you do, you'll quickly give up control. Remember, negotiating is always about who has the control. So, let's say you're paying around $350/month for your 4 year old clunker. If you divulge this information, expect a good salesperson to ask "Is what you're paying now comfortable or can you afford a little more?" He (or she) is trying to gauge how much "flex" you have in your budget. This is not a good way to negotiate the best deal. Have a number in your head of what you can afford before you even get to the dealership, but never let on how high you're willing and able to go. This can hurt your leveraging power later on in the price negotiations.
2. Never discuss your trade-in details before settling on a price for your new car. WHY NOT: Car salesmen are trained to ask "so how much do you want for your trade?" If you're trading in your old car for another one, don't discuss your situation until after you've settled on the price of your new car. The reason is because the dealer will try and confuse things by working a deal on both ends simultaneously. Car dealerships make money on both the "front end" (the price of your new, used car) and the "back end" (the value of your trade-in). You'll almost always lose if you tell the salesperson upfront that you're trading in your car. When asked, simply state that you would like to discuss this if you find the car you want and after you find out the price of that car. Once you agree on a price for your new wheels, it's okay discuss your trade-in.
3. Never be afraid to walk away from a deal.
WHY NOT: Most salespeople understand that many of us are "emotional buyers". We see something we like and we've got to have it. Buying a new or used car is exciting. It's fun to envision ourselves driving around in a new ride, but you have to curb your emotions or you'll be easy prey for a savvy car salesman. If you've done your best negotiating and are still not sure you're getting a good deal, just get up and walk away. I don't care if the salesman tells you "I can't hold the car unless you leave a deposit." Don't be pressured! If you need some time to think it over and someone else buys your car, than maybe it just wasn't meant to be.
Things you should ALWAYS do:
1. If you saw a specific used car advertised, always bring the ad with you.
WHY: Dealers hate it when you walk into the showroom with an advertisement for one of their cars. The reason they hate it is because they MUST honor what's written in the ad. Many dealerships use low-ball or "teaser" ads to get you in the door, then try and push you into a more expensive vehicle. A smart buyer should have none of this. If you see a certain car advertised for a certain price, bring the ad with you if possible. Just be aware that many salespeople try hard to squirm out of 'ad-cars'. Expect to be steered away from a car with a too-good-to-be-true advertised price and into one with a much greater profit margin for the dealer.
2. Always know beforehand how much you can really afford.
WHY: We touched on this earlier when discussing why not to disclose how much you can spend monthly on a car. It would seem like common sense to assume that most people don't pay more than they can afford for an automobile, but history shows that this isn't always true. Cars are repossessed, impounded, auctioned and abandoned all the time because the people who purchased them couldn't afford them. Car buying is certainly an emotional experience. If you find yourself falling head over heels for a vehicle, recognize that you might be tempted to pay more than you've budgeted. The best way to avoid this is by taking your emotions out of the process. Instead, treat car buying as a business transaction. Before you begin your search , know exactly how much car you can and cannot afford and then stick to your guns. Don't tell anyone at the dealership know how much you are willing to spend and don't ever let a sweet talking salesperson coerce you into making a move you may regret after the "newness" of your car wears off.
3. Always do your research before going to the dealership.
WHY: How do you know if you're getting a good deal or not? A good place to start is by knowing how much the car you want to buy is selling for elsewhere. Before you go shopping for a new hot rod, check and see what's out there. Whenever possible try to compare apples with apples. (Price comparable cars to the one you want). A comparable or "comp" car is one that has roughly the same options, trim level, mileage and overall condition as the car you want to buy. There can be significant price swings between similar cars of different trim levels. For example, you may see a five year old Mustang advertised for a ridiculously low price. However, if you want one that actually goes faster than a '76 Pinto with two flat tires and a blown transmission, then you'll need to buy a Mustang GT. Oh, and expect to pay 20-40% more for the GT model. The point is that you should always investigate and find out all you can about comp cars. Know the options, different trim levels, engine choices, price averages for your area, etc. This way you'll have some idea as to what you can expect to find and whether or not you're getting the deal of a lifetime on the car of your dreams. Good luck!
Published by Raymond Nobile
Raymond
Nobile is a journalist, author and freelance writer. He is an
accomplished business professional and is available for lecturing on a
range of topics.
For more information, contact Raymond at CFM97... View profile
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