Now there are many different car dealerships but I wanted to focus on franchise-based car dealerships. Franchise car dealerships are sellers that are officially selling for the brand name cars such as just selling Honda or Acura cars or selling just Toyota or Lexus cars.
I have broken down the pros and cons of purchasing from a franchise car dealership.
Pros of Buying from an Franchised Car Dealership
- They have more selections of cars
- They have new cars to buy
- They can afford to not make a profit when they sell you the car
- They have certified used cars
- They offer insurance packages
- They offer maintenance packages
- Maximum warranties are offered
Cons of Buying from a Franchised Car Dealership
- Prices are higher when compared to a non-franchise car dealership
- Maintenance is higher if you’re not on a prepaid plan
- They will charge for everything
Cons of Buy from Non-Franchise Car Dealerships
- Less selection of cars
- Limited to no warranties are available
- Limited to no certified used cars
- No selection of new vehicles
Avoid Buying New Cars
I don't buy new cars, I always buy used cars from car dealerships. For an average American, keeping the resale value of the car is very important because we don’t keep our cars forever. When buying a new car, as soon as the contract is signed, the car buyer looses $4,000 in the value of the car on the spot, because it's "owned" by someone by that time. I bought a 2017 Nissan Altima which was 6 months old, with very low mileage, which was good enough for me.
Guide to Lowballing Car Dealership
- Before going to the car dealership, research which car you want to buy at the dealership of your choice. Find the market value of the car from Kelly Bluebook.
- Before going to the car dealership, check your Credit Score to see if you have a good score, a good score should be around 700+.
- Before you go to the car dealership, set a budget with the car you researched.
- Get pre-approved for an auto loan from a Credit Union
- After you have done all of the things above, Google search a dealership that has good customer service.
- Go on the last day of the month. The last day of the month is when the car salesmen have to meet their quota. If they see a customer who is willing to buy then they'll do just about anything to get that last sale. They'll even get on their knees for you, just kidding.
- Give little shopping time for yourself to browse around. Basically, arrive 20-30 minutes before the dealership closes. The dealership will keep the business open after hours if they are confident that you will buy a car from them.
- When you tell them which car you want, talk to them as if you have little time. Don't ask too many questions about the car, because you already researched about the car.
- Get a premium maintenance package like oil change and all the goodies that come with them like tire insurance. Trust me when I tell you that it'll help you in the long run if you get the full package, because it's cheaper in the long run.
- Get gap insurance if you don't have a luxury car. The value of your car will drop just months after driving it. Only luxury cars (Lexus, Mercedes, BMW) will retain a steady value.
- Make sure you are always ready to walk away if the price of the car is out of your budget. The salesman will do their best to lower it; they'll even talk to their manager to get the car to a price that you can afford if it's within $2,000-$3,000 difference.
Take the tips I mentioned above and apply them. Remember, you're the customer and at the end of the month, the ball is in your court. Happy Shopping.
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