Your credit history.
How is my credit part of a car dealer’s sales tactic?
You may run into a car dealer or salesperson that indicates to you that you won’t or can’t qualify for competitive finance rates, but “our finance manager is one of the best in the business and because of the volume of business we do with Acme bank and trust we will work on your behalf to get this deal done for you.”
The finance department for a car dealership can be a huge profit center for a dealership. In fact, as we have discussed before, the finance manager is every bit a sales department within a dealership.
Finance managers make money off of your deal buy getting the money at a lower rate than which they sign you up for.
For example if the finance department gets the money from their favorite bank at say 8% and you sign the financing papers at 9.5% (or higher) the dealership is very happy for you.
This is why is it so very important that you know your credit.
Let me repeat that… know your credit.
So take some time now and go to Equifax and find out your credit score.
When you know your credit score you can’t be misled. If you have had some credit problems in the past this even becomes more important. And while we’re at it, take the time to get your car financing ducks in order at GreatCarRates.com or Automotive.com at any of these sites the application process is easy and you’ll know something back in short order. Knowing your financing before you go car shopping is powerful stuff.
Let me give you an extreme example yet a very real example of how your lack of understanding can bury you in your car and financially. This can happen during a car sale because you have to have transportation and you have misplaced your trust in car dealership and salesperson by telling them about your credit and your financing.
Let’s say a dealer has a car on their lot that they have put $7000 into. You don’t know what the asking price for this car is because it is not readily available to see anywhere on the car. Many dealers use a code for the price in the stock number of the car so the salesperson can recognize the price but not you.
Now let’s say you really like this car and want to try to buy it. Moving forward just a bit for the sake of the example, let’s say that either through the dealer financing or by virtue of the fact that you’ve told the sales person how much money you have been approved for (A REALLY BAD mistake either way) the dealer now knows that a bank will loan you $11,000 on an approved vehicle (hold onto your wallet)!
Knowing just this little bit of information on you and relying on the fact that you aren’t a polished car buyer or shopper is a gold mine for a salesperson and car dealer, and this is potentially what the dealer can do for … err uh… or more truthfully TO you.
Let the blood letting begin oh poor uninformed car buyer with not so good credit!
Next I’m going to show you something that may startle you just a bit when it comes to the used car side of the car buying experience… hold on to your wallet next up is Car Dealers – Tricks And Sales Tactics part 3 chaaaaaa chiiiiiing.
