Car
Buying - Closing the Car 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.
|
