Car Buying Tips: Things That Go Bump
Filed under Buying Process, Getting Started
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So you’re fresh off our quick little on the car lot, meet and greet quiz and you’re not sure what just happened and why you just made so many egregious mistakes and you’ve not even set foot in the car dealership yet!
So, let’s break it down.
By the way… if you’ve found your way here and not taken the quiz yet, you need to do so… go here for car buying quiz.
What just happened with a little bit of seemingly harmless small talk out on the lot between you and the sales person?
For the salesperson… plenty.
The sales person now knows:
- You are planning on trading in.
- What you owe on your trade-in.
- What your position of equity or negative equity you are in.
- What monthly payments you’re comfortable with.
And has gotten you to already mentally spending $50.00 more per month than you intended.
The biggies here are the monthly payment information and the fact that you’ve just been mentally bumped.
Good job by the salesperson… you however… need to invest in my car buying guide.
Right now the salesperson has about $3,000 more negotiating dollars in his/her favor to work your deal with… or should I say… against you.
$50.00 per monthly payment bump times 60 months (standard 5yr financing).
You openly admitted that your current payments were around $350.00 and you openly admitted that for the right car you would consider as high as $400 per month payments… so here is some typical math given the two payment amounts over the life of the loan.
If you were able to stick to your original $350/month budget had you not revealed it to the salesperson.
18,500
5% Interest Rate
60 mo
349.12 x 60 = 20,947.20
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But… since the salesperson has bumped you mentally both the salesperson and the sales manager can pour on the pressure (and oh yes, the charm) knowing that they can most likely get you to $400.
Here is what your $400/mo payments look like over the life of the loan.
21,200
5% Interest Rate
60 mo
400.07 x 60 = 24,004.20
You can see that by using the mental bump method in the car buying process, the sales staff has you now paying almost $3,000 more dollars in total.
This is why you NEVER give up any of this type of information to the salesperson during the course of any conversation.
They simply do not need to know anything about your budget or what you want your monthly payments to be. The only information the dealer needs at this point is your name and what type of car you’re looking for… period.
