Top 6 ways to beat a car dealer before the end of financial year
Car dealers transact every day. You don’t. They’re match fit. You’re not. They’re ambush predators. You’re not. So … here’s how to win
It’s all part of the dodgiest script on earth: “This deal is only available today. Let’s get the sales manager to approve this low price - it’s completely outside my approval authority, but he’s a good bloke. How do you expect me to feed my family if I sell it to you for this unrealistically low price?” (Correct answer there: Who cares?)
It’s all crap. It’s a veneer of politeness over the real objective, which is: to greet you and gut you before you walk off the lot.
Do not play this game. Car dealers are ambush predators. They need you to stand on their ‘X’ - this is how ambushes work. Don’t stand on the ‘X’. Remember the ‘golden rules’. You’re the one with the gold. Therefore: You get to make the rules.
One per cent finance is a con. It’s not a real interest rate. What really happens is: They don’t discount the car as low as they’d otherwise go, and they pay the financier a real interest rate under the table, undisclosed - it’s called subvented finance.
Usually you get locked in for half the amount of the sale for a maximum of 36 months, and you have to find the balloon payment - some five-figure sum, inconveniently - in three years’ time.
So that means either refinancing at a substantially high interest rate, or they’ll use it as a trigger for you to trade and go again - which might not otherwise suit you.
See also:
Get real finance, and screw them down harder on price. That’s usually the best overall outcome.
People generally don’t appreciate that there are often two or three transactions on the table at a dealership. You buy a new car, sure, but you often trade in your old one, and you arrange the finance.
So, the car dealer can bend over, hard, on the price of the new car - if you unwittingly allow him to bend you over on the finance and the trade-in. And he’s better at this than you, on the balance of probabilities.
The best way to avoid this is to separate the transactions. Know how much your trade-in is worth. Investigate the best independent finance deal available for you. And only then, attend the dealership.
Tell the salesman there’s no trade in (maybe you’re considering selling the old car to a relative - whatever) and tell him you’ve got the finance sorted. Nail the price of the new car in absolute isolation. And only then you can introduce the possibility of the other transactions.
This is probably the most important tip of all. Pitch a low offer, and then walk if they don’t go for it. Whatever the offered price is, take about 20 per cent off, offer that as the limit that you can afford to spend.
If they don’t go for it, walk away politely. Let’s say it’s a $30,000 car - that’s the price they’re offering. $29,990 drive-away, kind of thing. You say: My wife, boyfriend - whomever - is going to separate my reproductive organs from me if I spend more than $25 grand.
If they decline to accept, just say: Sorry we can’t do business. I’ll keep shopping. I like this car though - gimme a call if you can nudge the price down to $25 grand and I’ll come back - provided I haven’t purchased elsewhere.
They hate that - but it’s a very effective lever. The person who’s prepared to walk away has the most power in a negotiation.
You can do this at half a dozen dealerships in one day - one of them is going to be under pressure. Just wait for the phone to ring and the clock ticks closer to end of financial year. You might be amazed how malleable the price becomes.
Finally - and this is a biggie: never pay a deposit until you’re absolutely sure. I have lost count of the number of people who have e-mailed me in a flap because they’ve signed on the dotted, paid $2k as a deposit, only to discover subsequently a far better deal.
Research first. Purchase second, once you’re absolutely sure. That’s the only sane way to do this. Do not leave anything blank in the contract. Do not leave more than $1000 as a deposit.
