Car Buying Myths
When it comes to car buying, don’t believe everything you’ve read or heard. The general feeling is that it’s a long drawn out process that beats you down, and car salespeople are always trying to ‘put one over’ on you. The key word here is ‘general.’ While evidence can surely be found to support this theory, the truth is that car buying has significantly evolved in recent years and buyers have access to more information than ever before.
Doing your homework on the vehicle you want and educating yourself on the car buying process BEFORE going into the dealership will make it a more pleasant experience. And you’ll leave with the car you want at a deal you’re comfortable with. That said, let’s take a look at some common myths of car buying strategies.
Never Buy a Brand-New Car:
We’ve all heard that a new car loses value just by driving it off the lot (usually around 10-20%). However, this fact alone shouldn’t immediately sway you from buying new. Some cars will retain their value much better than others so it’s best to do your research on re-sale value over time. Also, you will likely get more favorable financing options if you buy new so the difference in cost compared to a 1-2 year-old model might be negligible.
Again, this is based on the premise that the dealer will always low-ball you on the price. Many people think they can get more money by selling to a private party. While this can be true in some cases, there is some risk involved and, depending on the price, private party buyers may need financing, or may even request to make payments in installments. You’ll have to weigh whether the potential headache is worth saving $1k – $2k compared to the dealer trade-in offer. Also, you may be able to get a tax break on the trade-in, making it even more of a wash.
Don’t Reveal Your Trade-in Until the End of the Process:
The common thinking here is that it will catch the salesperson off guard and you’ll get a better deal on the trade-in. The truth is that car salespeople cut several deals every year and have seen this tactic before. What is most likely to happen is they will have to re-structure the deal to factor in your trade-in, you’ll spend more time at the dealership, you’ll probably annoy the salesperson, and you won’t get a better price.
Your Own Financing is Always Better Than the Dealer’s:
Cutting the dealer financing out of the car buying process might seem like a win, but it isn’t always the best way to go. Dealerships have relationships with many lenders and, thus, more options for financing. They can also offer 0% financing (usually for new cars) which a credit union cannot match. What this will really come down to is your credit score. If your credit score isn’t very good, you’re probably better off going with a credit union. But if you have an average to above average score, you may be able to get a better rate through the dealership.
You Can Get a Better Deal at the End of the Month:
Many buyers believe that going into a dealership at the end of the month to buy a car is the best way to go. Again, this could be the case, but not always. You have to consider that they may have already hit their quota and are not motivated to cut any deals. On the flipside, they may try to inflate the price if they haven’t hit their quota for the month. Bottom line, don’t count on having an advantage by doing this. You can likely get a good deal no matter when you choose to buy.
Offering a Fixed Cash Amount Will Get You a Better Deal:
The pitch usually goes something like “I’ll give you ‘x-amount’ of cash to walk out the door with ‘x-vehicle’ right now.” Assuming it’s not a generous offer to the dealer, don’t expect this to work in your favor. On one hand, you’re not being flexible so don’t expect the dealer be. On the other, dealers are incented to push their financing. You’ll most likely walk out with no vehicle or end up compromising on the price.
While there is some value in knowing about these mostly hollow car-buying tactics, you have to consider the bigger picture and not rely on things you’ve always thought to be true just because you read it somewhere or heard it from your parents.
The best thing you can do before going into buying a car is to use the resources available to you and do your research. You’re not going to fool a car salesperson into giving you a better deal – that’s what they do for a living.
Advantages of Applying with Bluesky:
- Our lending platform is integrated with actual lenders that offer car financing directly to consumers. This gives you the opportunity to get approved instantly online before shopping for a car and allows you to negotiate like a cash buyer.
- We work with a network of automotive dealers that have a dedicated department or person that specialize in helping people with difficult credit. Through these partnerships, we are able to intervene if necessary and will be there for you after you submit your information.
- You’re not obligated to accept the terms of any auto loan offered to you. Whether you get approved from one or more of our direct auto finance lenders or a car dealer that provides bad credit auto loans, you’re in the driver’s seat.