Car Buying – Closing the Deal

Once you have done your due diligence and you feel good about the price of the car you are looking at buying and you are moving toward closing the car deal, take one last reality check and make sure you have taken into consideration what the total cost of ownership is going to be to you.

Don’t forget about sales taxes and any other state and local fees you will be responsible for.

I distinctly remember the first car I proudly bought. It gave me quite an eye opener (and wallet opener) for a young guy when I went in to purchase my plate. The state that I was in at the time collected the sales tax at that point in time. Needless to say that took some of the shine off of the deal right at that moment.

Even though with today internet car buying information readily available to consumers, excellent resources such as Edmunds.com might not have the precise dealer cost.

This is simply because there is no way for Edmunds or Automotive.com to track all of the regional fees dealerships may incur such as advertising costs. So, as you move closer to closing a car deal, be mindful of this and not rant about the dealer adding bogus costs to their invoice.

Having said this, just as we have discussed previously about car dealer add-on’s, be very wary of additional dealer mark ups, and so called ‘market adjustments’ to the price of the car. If you feel you have crossed paths with these types of tactics, ask that they be removed and go somewhere else if not.

The reason that keeping your guard up throughout the entire car buying process including as you walk in the finance office to close the car deal, is because there are so many points of potential profit that the dealer can get from you during the course of the deal all the way through the signing process.

The actual profit percentage that a dealer makes on new cars isn’t as high as it once was, or as high as you might think.

The average dealer profit over invoice is 2%-6%.

This is why it is so very important to the profitability of a dealership to achieve much higher profit margins in other areas. And this is why you must remain very watchful as to what you are signing and exactly what all of the numbers are.

Although the profit margin over invoice may not be as large as you thought, the profit margin on add-ons such as security systems, glass etching, paint sealant and the like is … well very tidy for the dealer.

Financing your car is next…