One of the rules of any business is that, if the business doesn't grow, it stagnates. So car dealers are always looking to attract new customers, not just to procure those extra sales dollars, but to secure another ambassador for the dealership. New business often comes in the door by word of mouth. Attracting new customers, however, has been more of a challenge both during and after the recession. Typical causes include slumping regional economies, a sluggish new housing market builders and tradesmen are big buyers of light trucks and the challenge of a domestic industry Ford being the one exception coming out of bankruptcy.
And there is also the obvious: there are simply too many cars in the marketplace. As manufacturers roll out more new models every year, the industry becomes more fragmented. So, it's now more difficult than ever for a carmaker and its dealers to maintain or increase their foothold in the consumer marketplace.
Just as they work to attract new customers, it is equally imperative that car dealers retain existing customers. Repeat business is consistently a major contributor to any car dealer's annual revenues and its reputation.
Many — if not most — car dealers conduct customer satisfaction surveys to determine whether current customers are happy with the quality of service. Today the challenge is in maintaining brand loyalty, especially among younger buyers less fixed on a specific brand and often more focused on specific features.
An ongoing issue dealers and dealer groups face has been a relatively high rate of employee turnover. Salesmen and various department managers leave or are dismissed for various reasons: Perhaps they underperform and maybe they're underpaid. Retail hours play havoc with what is a generally acceptable home life, and while more dealer groups move toward a pay structure with some base salary, many sales people are still paid on straight commission.
And if that commission is a percentage of a declining profit picture so, then, is the compensation package in decline. What does all of this mean to you, the car buyer? Knowing more about how car dealers are operated — knowing that dealers face many more challenges than they did just a few years ago, even in a growing economy — helps make you a more informed consumer.
And that puts you in position to either get a better deal on your next new car purchase , or — at the very least — have a better idea of what that 'better deal' constitutes.
We get it. Ads can be annoying. But ads are also how we keep the garage doors open and the lights on here at Autoblog - and keep our stories free for you and for everyone. And free is good, right? That means researching what make and model you are interested in and how much they sell for in your area. If you're wondering whether it's worth the added time to do your homework on used vehicles, consider what you may be able to gain by doing so.
By researching specific vehicles that have the features and mileage you are looking for, you introduce competition to the car-buying process. A seller might not match the lowest price you find, but it cannot hurt to ask. Edmunds is a good resource for auto shoppers. It, along with Kelley Blue Book and National Automotive Dealers Association , track new and used car purchases to provide granular pricing information.
Beyond the valuable research tools available on the internet, you may choose to look at an online marketplace for buying and selling cars. Used car sites simplify the shopping experience with detailed searchable listings, car reviews, buyers guides, and more, meaning your vehicle could be just a few clicks away.
Some of the automotive magazines — particularly the largest, Car and Driver — are also useful for their lengthy backlog of reviews with a slant towards driving enthusiasts.
Once you have determined what you want to buy, and what it typically sells for, it's time to do some research in-person. Specifically, this means taking a used vehicle for a test drive and giving it a careful visual inspection. It's also important to ensure that everything the seller says about a used vehicle is true.
Get the vehicle history report Carfax and AutoCheck are two popular choices to confirm the odometer reading, ownership history, and reports of accidents and flood damage. If buying from a private seller, you can also ask to see a copy of maintenance records. This can help you get a better sense of what a used vehicle is truly worth, in terms of market value, and whether you're willing to pay that price, based on its condition.
If a seller seems reluctant to offer details about the vehicle, that's a sign that you may want to look elsewhere to buy.
Consider having any used vehicle you plan to purchase looked over by a certified mechanic who can point out any major issues, if they exist. Buying a used vehicle from a private seller may be an option if you plan to pay cash.
But consider how much a private seller is likely to charge for a vehicle versus a dealership. Depending on the seller, it's possible that you may be able to negotiate them down on the price if they have a fairly urgent need to sell. On the other hand, if a seller claims there's no pressing reason for the sale, other than wanting to get rid of the car, you may have a tougher time talking them down.
In terms of where to set your negotiation starting point, it may be helpful to choose a set dollar amount that represents the absolute maximum you're willing to pay. Then you can set your starting price below that amount so you have room to work your way up. Negotiating used car prices with a private seller could lead to a better deal but keep in mind that you may not get any type of warranty with the purchase. There are some advantages to purchasing a used vehicle from a dealership instead of a private seller.
So automatically, you may have a better chance of finding something that fits both your needs and price range. Dealers are also more likely to clean and perform a basic inspection of a car, plus they are governed by Federal Trade Commission rules as well as state and local regulations.
Buyers should ask how warranties will be honored and where any needed repairs will be made, however. The amount you can knock off the price ultimately depends on what the car is worth, how strong your financing position is, and how long the car has been on the lot.
Here are some things that can help as you prepare to negotiate:. Negotiating a used car price is something of an art, and it's important to have confidence as you begin to bargain. Don't allow a salesperson to intimidate you into making a deal that you're not comfortable with. CPO vehicles are thoroughly inspected, any maintenance issues are addressed, and they are cosmetically sound — no shredded interiors, bashed fenders or missing trim.
When talking to a dealer by their nature, certified cars are sold through dealers, not private individuals about a certified car, have them show you its inspection report, which will list all of the areas checked, whether or not there were any recalls on the model, and even details such as tire tread depth and the thickness of the brake pads.
CPO cars tend to have less wear and tear. Mercedes, for instance, will only certify cars six years old or less, with fewer than 75, miles. The German brand then adds a year and unlimited miles to whatever initial warranty is left, plus hour roadside assistance, trip interruption protection, and service loan cars. You pay extra for CPO cars, however. It turns used-car-buying into a new-car-buying experience. Like new cars, CPO vehicles are best purchased at the end of the month, when dealers are looking to make quotas and are more receptive to haggling.
However, a used car sale is not generally cyclical this way, though timing can still be employed. For instance, if you live in an area that gets a lot of snow, you'll likely get a better deal on a convertible in the fall and winter months. Conversely, there is usually an uptick in all sales around April, when people blow their tax refunds, so avoid shopping then, if possible. Knowledge is your best resource for getting the best deal. Knowing what other cars like the one you are bargaining over sell for is key to talking down a price.
But what else? Here's where your bargaining skills come into play. Unlike a new car, which may have never been driven past the dealer's lot, a used car has been on the road and as a result, it has already lost some of its value. When a lower purchase price is the goal, you don't want to go in with the wrong approach. Come off as too demanding, and the dealer may not be willing to make any concessions in your favor.
Go in too soft, and they may see you as a pushover. When you sit down with the salesperson and present your offer, be firm but polite. Research and compare lenders before you apply. Share your experiences with Canada's top lenders. Whether you have good credit or poor credit, building financial awareness is the best way to save.
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Speak with a trusted specialist today and see how we can help you achieve your financial goals faster. Loans Canada and its partners will never ask you for an upfront fee , deposit or insurance payments on a loan. Loans Canada is not a mortgage broker and does not arrange mortgage loans or any other type of financial service.
When you apply for a Loans Canada service, our website simply refers your request to qualified third party providers who can assist you with your search. Loans Canada may receive compensation from the offers shown on its website. Only provide your information to trusted sources and be aware of online phishing scams and the risks associated with them, including identity theft and financial loss. Table of Contents. Then again, getting your pre-owned car through a dealership may offer up a few more benefits than a private seller, because you can: Acquire warranties , accident reports, and other security features Test-drive a large selection of vehicles within the same day Access various perks and comforts GPS, satellite radio, etc.
New car or a used one? Check out this infographic to help make the decision. There are three main methods they use to fill up their storage lots and showrooms: Car Auctions One of the main ways that used car dealers buy and sell their inventory is through auctions, which are held across the country and can yield the widest range of vehicles that are available to the general public.
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