When you’re buying a new car unfortunately the experience often includes dealing with a pushy car salesman.
A salesman that will tell you that the extras and benefits they can throw in for you are unbelievably amazing deals… even when they’re not.
We’ve put together a list of common new car sales tactics, things like accessories and add-on services used to rack up the total purchase price of your car or, worse still, lock you into that dealer for servicing (which you should never EVER do, ever!)
- Free Servicing
Did you know that dealerships make the majority of their profit from servicing? Well, they do, so if they’re offering servicing for free it means they’ll add to your purchase price or dump you with upsells and unnecessary repairs throughout the life of your car.To make sure you’re really getting value for money you need to know the true value of the car you’re looking to buy, the average servicing cost and then compare that to what the dealer is quoting.Also, don’t forget to read the fine print. Most dealers will void their free servicing if you’ve taken your car to another mechanic, which forces you to go to the dealer for things that aren’t included, like new tyres.
- Fixed-Price (Capped) Servicing
Fixed price servicing is becoming a more common offer from dealerships and at face value, it seems like a good budgeting tool. BE WARNED though, the Australian Automobile Association (AAA) has issued a warning for consumers to read the fine print.Most fixed-priced services are still massively overpriced. They’re also more likely to upsell extras along the way, have a tendency to run out just prior to any major service intervals and become void if you take your car to a different mechanic.Shop around, read the fine print and beware of upsells at every service.
- Demonstrator Vehicles
Demonstrator vehicles can seem like a great deal, however the regulations surrounding a “new” and “demonstrator” vehicle is a little foggy. A demonstrator vehicle is a new vehicle that has been used as the “test drive” vehicle or as a company car by the salespeople. Before that car hikes up too many km’s, they’ll sell the car at a reduced rate. Seems like a good deal, right?BE CAUTIOUS though, there aren’t any regulations outlining how many km’s a “new” car should have. Therefore pretty much all cars will have done some k’s. A new car, however, really shouldn’t have more than 10km on the odometer, simple the logistics of getting them from the factory to the dealer. If the new car you’re looking to buy has more than this, it may be something cheeky at work. Like your dealer has sourced the car from another location and driven it rather than putting it on a truck. Or maybe it’s been damaged and driven somewhere for repairs. Ultimately, if you see more than 10km, ask the dealer why.
- 0% Finance
When a 0% finance offer on a new vehicle comes up where the dealer pays the interest to the financier, instead of you. It can seem too good to be true, but in most cases it actually ends up cheaper to just pay the interest yourself and negotiate a lower sale price. You may also find that there are loads more restrictions on the finance when you take up these 0% options.If you’re still unsure, run the numbers yourself using a car loan or leasing calculator. The trick is to understand the lifetime costs of financing your car and ensure that the lifetime rate with the dealer is lower.
- Extended Warranty
Extending your warranty from three to five years seems like a no-brainer. And yet, a recent study actually revealed that many extended warranties effectively offer little or no value.Between years four and five in the life of your vehicle, precisely when extended warranties kick in, that new cars usually start to experience mechanical problems. Why would they want to give this prime source of revenue away?The terms of the warranties state that the warranty company has absolute discretion over the claims paid. So the reality is on many occasions the warranty companies either don’t pay, or only pay a percentage of repairs. It’s a false peace of mind.
Ultimately, spotting new car sales tactics isn’t always easy. Plenty of people get trapped by them everyday. The best way to protect yourself is by arming yourself with knowledge; know the car’s true value, work out your expected servicing costs and understand your finance options
BEFORE you head to the dealership. And, most importantly, never ever, ever sign anything that locks you into servicing your car at the dealership.
For more tips and tricks on anything auto related, check out the Blue Toro Blog.