This question will become the focus of a series of posts about people who screw people, sometimes for a living. And, hopefully, lessons I’ve learned and want to pass on.
Part 1 – Car Dealers and Finance Managers
Their job is to sell you a car, and in the process get as much money out of your pocket and into theirs as possible. That is exactly the opposite job to mine – to buy a car and keep as much money in my pocket as possible. They will often tell you anything they think you want to hear to get it. They will lie, cheat and steal.
I have bought two new cars in my forty-something years. The first was right after I realized that my father did not hide new car keys in my college graduation celebration cake.
It was a cute little bright red Nissan Pulsar with a T-Roof, and it was two days before my 22nd birthday. I only went to one dealership (another mistake), and I’ll never forget my mother’s advice that day, as I balked at having to pay $235 a month for the next five years. “You’re always going to have a car payment, sweetheart,” she said. ” Get used to it.”
I didn’t realize at the time that I was getting shafted. Those heartless shysters saddled me with a 10.5% finance rate. I had settled for a car payment I could afford, not found the best interest rate. The finance manager and the salesman probably got a trip to Tahiti for giving me a rate likely 2 full points above what I was eligible for.
I was a naive consumer, but I paid that note (this is where I learned another valuable lesson that many don’t know: your payments are due on your due date. If you pay after the due date but within the grace period you don’t get a late charge, but you get charged additional interest that they tack onto the last payment on your loan! So, please make your payments on time!).
I drove that very reliable car for five payment-free years after I paid off that note, and I liked it. I surely did like it. That’s how I learned that I didn’t need a new car every few years, and that no, Mom, I won’t always have a payment.
On the 10th anniversary of the purchase of my first one I bought my second new car. I had learned a thing or twelve in that ten years. I was much better prepared this time.
I visited several dealerships, and watched as salesmen and finance managers tried to steal money out of my pocket. I had researched and comparison-shopped and waited until the time was right and even called in a favor. They laughed at my offers and lied about expenses and tried to wear me down. I wouldn’t even discuss financing until I had a price. I left more than one, more than once.
In the end I made a good deal, and they hated my guts. When I sat down with the finance manager, I had a secret he didn’t know. I had gotten pre-approved for a car loan before I even walked through the door. Still, they tried to hide unnecessary charges in the contract. They lied to me, insisting to me those charges were required when they weren’t. I remember sitting across from that guy and actually saying the words to him, “How do you sleep at night, knowing that you screw people for a living?” I wound up using their financing, as my pre-approval gave me leverage to get an even better interest rate from the dealer. Money in my pocket.
Alas, that is the last new car I’ll ever drive.
Shortly after I got married my husband decided to get a new car for himself. He’d bought several new cars, but had driven this last one for eleven years. My new brother-in-law is in the car business. He is one of the shysters and rat bastards of which I speak, and in his case I say it affectionately. Mostly.
He’s the one who explained the process to me, really pulled back the covers on this very shady business. As consumers we can get oh so much better deals by buying used. Cars depreciate so much in the first year. And he recommended that we wait until January (much to my husband’s chagrin). Why? Because after the turn of the year the car becomes a year older in just one day, and therefore you can negotiate price based on it being 2 years old instead of the one year it actually is.
Also, most people know about the Kelly Blue Book, but did you know there’s a Black Book which most dealers use as a price reference? And that the prices are much less than Kelly Blue Book? Yeah.
That’s what inspired us, with some help from said brother-in-law, to buy our 2001 our Dodge Durango in January of 2003 for just slightly more than half of what it originally sold for. I added an extended warranty that I purchased from my local credit union (never, ever buy an extended warranty from a dealership unless you want to pay an egregious markup, and always, ALWAYS buy an extended warranty on a Dodge). Also, if you have cash in hand for the whole thing – or even just for the down payment- charge as much as the dealership will allow you to, then pay the credit card company immediately. Why not get the credit card rewards?
When my husband totaled my lovely Acura (through no fault of his own), we used the same principles to buy our 2004 Hyundai Sonata. Those salesmen hated me even more than the Dodge guys. The finance manager met with me even though I paid cash – “Are you sure you don’t want to keep that money liquid in case of an emergency?” he asked. “We offer great rates to people with excellent credit like you.” Really? Really? Oh, and you want to charge me $400 for VIN etching the windows, something that my insurance company will do for free? No thanks. Enjoy looking in that mirror, fella.
Another thing I learned – when buying a used car, always buy from a dealership. If they know there’s something wrong with the car they have to tell you. A private seller does not.
Of course, that’s assuming the dealer is following the law, and since we already established they are rat bastards and shysters, I wouldn’t take their word for it. I would, however, take the word of my mechanic, who will be looking over the car before I buy it. That’s B-E-F-O-R-E, my friends.
Next year the extended warranty on the Durango expires, and we’ll likely get another vehicle to replace it. It will definitely, absolutely be a used car. And the car dealers and finance managers will hate me some more.
That’s okay. I have no problem sleeping at night.
Like this post? Read the other post in this series!