Key Takeaways
Knowing and interacting with a car dealer can be a great experience if you understand the points that we discuss below:
• How car dealers make money
• Things you shouldn’t say to a car dealer
• How to effectively prepare before meeting a car dealer
• That your interaction with a dealer is business
• You have a lot to negotiate and get a great deal
When dealing with a car dealer, you want to make sure you get the most out of your experience and build a good rapport. You want to make sure that you are both on the same page so you can get the car you want and make sure it’s in the best condition. The following tips can help you understand your car dealer, get the best deal, stay in control of the conversation, and create a positive relationship:
How Car Dealers Make Money
It’s important to understand how car dealers make money. It’s not just about selling cars – here are some ways car dealers make money:
Holdbacks
Whenever a dealer buys a car from the manufacturer, they usually get a ‘holdback’ – a percentage of the purchase price (usually 2-5{60302a704289ffbf97a4812255a0bc8a6f23097845ce08f1b9000776917131c2}) that is held back for later rebate payments. This money helps subsidize advertising costs and other expenses associated with selling cars. So even if a dealer sells you a car at the invoice price, they may actually be making money from the holdback.
Finance and Insurance (F&I) Products
Car dealers also make money from selling F&I products such as extended warranties and gap insurance. These products are sold at a markup and can result in a substantial profit for the dealer. It’s important to know that you don’t have to buy these products from the dealer – you can purchase them elsewhere if you want.
Trade In Value
Car dealers make money from the trade-in value of your old car. They will typically try to get you a low appraisal for your car and then add the difference in price to the cost of the new car. Be sure to research what your car is worth before you enter into negotiations with a dealer so that you don’t end up paying too much for your new car.
Things You Shouldn’t Say To a Dealer
When talking to a car dealer, avoid saying things that may come off as hostile or accusatory. This can include statements like “I know you’re trying to rip me off” or “The price is unreasonably high.” Those types of comments will not help your negotiations and could damage the relationship with the dealer. Here are some things you shouldn’t do for your own benefit:
- Don’t talk about your trade-in before negotiating the price of a new car. Doing this could reveal your bottom dollar and leave you with little to negotiate.
- Don’t try to get the dealer to match or beat a competitor’s price without having evidence of it. Showing proof of the offer will let them know that you are serious and they may be willing to work with you on price.
- Don’t negotiate for a monthly payment. This is a common mistake that will leave you with higher payments and more money out of pocket in the end.
- Don’t be afraid to walk away if the dealer isn’t willing to meet your needs. This shows them that you are serious and that they need to work with you if they want to make a sale.
How to Prepare Before Meeting a Car Dealer
You should always research the dealer’s reputation before meeting with them. Here are some things you should do before visiting a dealership:
- Check reviews online and see what others have said about the dealership
- It’s also important to know the market value of the car you want to buy
- This will help you determine if they are offering a fair price or if they are trying to take advantage of you
- You should also be aware of the various financing options available to you
Remember It’s a Business Transaction
When talking to a car dealer, remember that you are engaging in a business transaction. They want to make money and you want to get the best deal possible. Be respectful and professional while negotiating, but don’t let yourself be taken advantage of either. Even if it takes several visits or phone calls, keep trying until you get the deal you want. Don’t be afraid to take your time, as this will likely get you better results in the long run.
What’s Not Negotiable With a Dealer
Almost everything is negotiable when it comes to car dealerships. This ranges from the price of the car, the financing rates, services like extended warranties, to small things like floor mats and even the number of keys you get. However, there is a short list of exceptions. For example, the registration fees and taxes are usually not up for negotiation. That’s because this money is set by the government and the dealer just passes it on to the authorities.
Visit Lake Elsinore Honda To Buy Your Dream Car
If you’re looking for a car dealer who understands your needs and is willing to work with you to get the best deal, visit Lake Elsinore Honda. Our team of experienced professionals will give you all the advice and support you need to make an informed decision. We even offer easy financing options so that you can drive away in a new car without breaking the bank. Don’t hesitate to call us today if you want a great car-buying experience! We look forward to helping you find your dream vehicle.
Connect with us
