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New Car Buying Myths and Misconceptions to Avoid

SAN FRANCISCO, April 29, 2015 (GLOBE NEWSWIRE) -- Cartelligent has released its list of common car buying myths and misconceptions. The service, based in Sausalito, California and with branches in East Bay, Silicon Valley, Los Angeles and Orange County helps thousands of people purchase cars each year across all manufacturers. Its team of professional car buyers has put together a guide to help consumers understand the true facts behind a number of the most common misconceptions around car buying.

Car buying myths range from the mundane (visit the dealership on the last day of the month) to the absurd (you'll get a better deal if it's raining outside). Most of these are relatively harmless, but some can wind up costing consumers both time and money.

Cartelligent negotiates thousands of car deals every year - in this article, they use their expertise to clarify a number of the common misconceptions people have around car buying.

1. The internet is the best place to get a good deal on a new car.

Companies like TrueCar and Costco sell the consumer's information to dealerships that are willing to honor a pre-set price for a given vehicle. Assuming the dealership(s) that buys the lead even has the vehicle the client wants in stock, the only part of the deal that has been agreed to is the price of the vehicle. The lease or finance interest rate, trade-in price, and other products such as an extended warranty still need to be negotiated.

Cartelligent recommends: Consumers should use the internet for education about what is a fair price, but should not assume that an online "deal" is fully negotiated or will save time and money overall.

2. Paying cash will get a better price.

"Cash is king" may be true in many cases, not when buying a new car. (The exception to this is when manufacturers offer cash only incentives) The dealership is usually incentivized to finance the vehicle and may even pad the interest rate offered in order to increase the amount they make on the transaction. This means that the dealership can make more money when the consumer chooses to lease or finance, and is therefore less motivated to further discount the price on a cash deal.

Cartelligent recommends: Consumers should choose the financing option that makes the most sense for them financially, not the one they think will get the best price on the vehicle.

3. It's always better to bring in your own financing.

Bringing in outside financing means that the deal is the same as paying cash to the dealership and, as above, they may be less likely to discount the price. Manufacturers often run highly discounted interest rates in order to help sell cars - these can be significantly lower than what a bank or credit union will offer.
Cartelligent recommends: Consumers should do their homework and know what the manufacturer is offering as well as what they can get on their own, then make the decision that works best.

4. A lower price or payment means it was a better deal.

Many car buyers will focus on a specific number - the price of the car, the monthly payment, interest rate, etc. This can make it easy to manipulate the surrounding numbers. They could wind up paying $3,000 below MSRP, but paying an extra $4,000 in inflated interest or making a payment that's $50 lower, but has a term of 72 months instead of 60.
Cartelligent recommends: Consumers should do the math to look at the deal as a whole rather than focusing single-mindedly on a single component of it.

5. Buy now or the deal will go away.

Unless the car is in limited supply or is a true loss leader, the odds are good that there will be similar deal available next week or even next month. It may take the form of a lower interest rate instead of a rebate, but the overall amount paid for the vehicle will be roughly the same.

Cartelligent recommends: Make sure that the overall deal is a good one. If it's not, walk away and keep looking.

6. You should wait till the end of the month to buy your new car.

If a particular dealership is a few cars away from a manufacturer's sales target and the consumer buy something they have in stock (compromise may be required on colors or options), they may be more likely to accept a lower offer than normal. However, if they have already hit their target or there is no target they are chasing that month, the deal available on the 31st will be no different they the one available on the 1st (and compromise may still be required on colors or options).
Cartelligent recommends: Consumers should buy the vehicle when it makes sense, and get it configured the way they want it.

7. Wait until the last minute to mention the trade-in.

Dealerships are so used to this trick, it has a special name, "parachuting the trade." It can add hours to the amount of time spent at the dealership because the entire trade-in evaluation won't start until after the rest of the deal is negotiated - without really changing the amount received for the trade-in.

Cartelligent recommends: Consumers should do their research on both the value of the trade-in and the new car so they can make sure they're getting a fair price for both.

8. Special ordering your vehicle will cost more money.

Special ordering can actually save consumers a considerable amount of money on many vehicles, especially European vehicles that can be configured in many different ways.

Cartelligent recommends: If waiting a few weeks for the new car to arrive isn't a problem, special ordering can be a great choice.

9. The new car needs to be services at the dealership where it was purchased.

A large percentage of cars that come in for service were not purchased at that dealership. Dealerships make a lot of money servicing cars and would like to service as many as possible. There's no reason not to take the new car to the closest dealership regardless of where it was purchased.

Cartelligent recommends: Buy the new car where it makes sense to do so and get the car serviced at whatever dealership is convenient.

10. It's possible to out-negotiate or trick the dealership into giving up a better deal.

Car dealerships negotiate hundreds of transactions each month; a single consumer probably only buy a new car once every few years. Even for people who are good negotiators, the dealership will always have more information and be better able to control the transaction than they are.

Cartelligent recommends: (This one is a little self-promotional, but hey, we believe in the value of our service.) We negotiate thousands of new car deals every year, we know the market, the available incentives and can use our buying volume to get you a below market price on any new car.

We welcome inquiries about these tips or about car buying in general. To set up an interview with one of our experts, please contact Jessica Carstens at 415-339-4562 or email jcarstens(at)cartelligent(dot)com.

About Cartelligent: For over thirteen years, Cartelligent has connected car buyers with the new car they want, at the right price. Thousands of satisfied clients have saved time and money while avoiding the hassle of the traditional dealer experience by working with Cartelligent to help them enjoy the car buying experience like never before.

CONTACT: Jessica Carstens 415-339-4562 jcarstens@cartelligent.com

Source: Cartelligent