Cars Cars

the Way Car Dealers Rip You Off

Introduction

Cars have become a necessity in today’s world and not having a car or proper means of transport could make life very difficult. At some point in our lives we are going to realize that a car is needed whether it is a new one or a second hand, we usually end up going to through a dealer. It’s quite obvious that the car dealer is going to maximize his profit and each penny he takes extra is your loss. There are a few common techniques the dealers follow to earn more profit it’s important for the customers to know them. The way car dealers do their business is not also as simple as it seems.

First of all, the way car dealer earn profits is through mark up. The difference between the retail mark price and the dealers cost (invoice) is usually 10 – 15 percent. It might not seem to be a big deal but when we talk about a car of a value of around $30,000 then then profit of the dealer would be around $3000 and if we assume that he get to sell a few hundred cars a month then only his mark up would be in millions of dollars, which in no case is justified.

When a dealer sell a new vehicle it’s like a lottery to him, the sale he makes RDR’d to the manufacturer informing him that the product has been sold, once this is verified, the manufacturer pays the dealer a set amount for hold back and advertising. This amount is usually not listed in the Invoice or listed in a less than obvious place and usually abbreviated this way the dealer can earn a great deal.

The way car dealers will always undervalue a trade in, if your car is worth $12,000 then surely the dealer will tell u a price of $11,000 of even lower so making an instant profit of a thousand dollars or even more. The dealers charge their customers the document fee which is usually around $300 to $600. In reality it’s a lot lower than this value and a major portion of it goes into the managements pockets. A very bad business practice is the bump sticker.

A bump sticker is real looking sticker that the dealer places next to the manufacturer’s window sticker with a higher marked price than the real marked price. The dealer will try and justify the cost by suggesting that it contains some special product like window etching, paint job and more. Once a costumer negotiates away the bump sticker he thinks that got a pretty substantial discount but in reality he gives the whole marked price.

There are some cases one has to put a down payment towards the purchase of a new car. The way car dealer will say "the lender is requiring 20 percent down" or that "You’re going to have to pay taxes in cash. The bank will finance the car, but they will not finance any tax or fees." This is totally a lie. If one secures his own financing before he buys, then the factor of the dealer cheating you can be minimized.

Tips and comments

A person should be well-aware of these things when he goes to buy a car and should never blindly trust the way car dealer do their business because every penny you lose is his profit and he will always try to maximize his profit.

By Khurram Hussain, published at 03/06/2012
   Rating: 4/5 (11 votes)
the Way Car Dealers Rip You Off. 4 of 5 based on 11 votes.

Comments

Most Recent Articles

  • How To Report Car Wrecks To the Police
    A car wreck can be terrifying. It usually happens unexpectedly and can cause injuries to you and your passengers or destroy your car. You may worry that you were at fault, or you may even be...
  • How To Find Mp3 Players Car
    Most people like listening to music as they drive to or from work or even when taking a road trip. Music while driving gives you a feeling of relaxation and you get to enjoy your ride or dri...
  • About Infant Car Seat Graco Recalls
    Sometimes, car seats are recalled due to malfunctions and problems that some parents have noticed that theirs have. If several models of the car seat have a problem, there is usually a recal...