So you’re looking for a car. Where do you start? What make, model, year, color, options, and safety features are important to you? Do you buy new or used? Trying to find the right car at a price that works can be a nightmare.
A couple years ago, I worked as a car salesman during a job transition—going from full-time ministry to full-time car salesman was quite the change. The organization I worked for was great and they were incredibly transparent with both their employees and their customers, but there are still a few secrets in the business. Here are some things you should know before heading over to the dealership:
1. The time we spend with you is valuable.
Dealerships assign salespeople to customers in a pre-determined order; when a salesperson is finished with a customer, their name goes back down to the bottom of the list and they may not have an opportunity to interact with another customer the rest of the day. So when a customer comes in and spends an hour or two test driving but doesn’t purchase, the salesperson who worked with them doesn’t earn any commission from that time. Because car salespeople are paid largely on commission, working with a customer who never intended to buy a car that day can really hurt their income. 2.We’re selling you a car so we can sell you something else. Dealerships make very little on the sale of a new car. I made most of my commission based on the value of someone's trade-in, financing, service plans (like oil change packages), and options like leather seats and splash guards. Most people buy a new car because it will come with some kind of warranty, but what the dealership may not tell you is that if you don’t service that car at that location, your warranty is void. Dealerships are not money makers because of the cars they sell—they make their money through the cars they service. 3. Dealers aren’t necessarily the best place to find a used car. Financial expert David Bach says, “Nothing you will do in your lifetime, realistically, will waste more money than buying a new car.” New cars typically decrease 20-30% in value over the first year, so used cars are generally a better deal. However, used inventory at a new car dealer is often limited. If you are looking for a used car, look at websites like Carmax or Truecar before going to a new car dealership. 4. The "final price" isn’t always final. You will usually end up paying more than your agreed upon price. At most dealers you will see a dealer handling fee, or a “doc fee.” What this really means is “our profit.” I have seen this fee as low as $500 and as high as $2000. Then there are registration and title fees, and state taxes too—where I live, the customer would pay about 8% in total taxes. On a $20,000 car, that’s $1,600. Make sure you know how much you want to pay and what you are paying for before you ever walk through the door. 5. We don’t care about your personal finances. “It’s their money and they can spend it how they want.” This is the mantra that was drilled into me when selling cars. I would often think, “if they buy this $2,000 tire package from me, I can pay my phone bill and get groceries this month.” About half of my customers ended up stacking their car debts, meaning they would trade in a vehicle (or sometimes multiple vehicles) that they still owed money on. Then they ended up with a larger monthly payment that would pay off their trade-ins as well as their new car. That meant I was able to finance them more money, which made me more money. At the end of the day, my goal was to excel in my job and bring money home to my family. If you are looking to buy a car, research thoroughly before you go in. Most car salespeople are great—they are charismatic and fun to be around. If you know what you are doing before arriving at the dealership, you will be able to have a good experience and get a great car that fits your family and your finances.
Mitch is a leader and pastor in Denver Colorado. He has served in local churches as a youth pastor, family pastor and first impressions pastor and is excited to plant a church in the near future. Mitch and his wife Anna have two daughters, Alexis and Madison.