March 23, 2013  • By Dennis Beaver

Buying a new car is rarely a simple, straightforward procedure unless money is of no concern. Most of us want the best deal possible, yet, customers who understand how an economy functions know that for automobile dealers to remain in business, they need to make a reasonable profit. No profit = no dealership = jobs lost, and that’s not good for any community.

Debbie — a cardiology nurse — understood that economic reality when she went shopping for a new Honda at a dealer whose sales numbers make it one of the most successful on the West Coast. As she tells it, “The last car I bought was a Honda Accord and that was 10 years ago. It is the only make of car that I would ever consider buying again, but when it comes to negotiating  price and trade-in value, I knew my limits and needed help.”

And so she brought a close friend, a CPA and her lawyer — who just happens to write this column — to the dealership. Little did we know that buying a new, top-of-the-line Honda Accord would take almost an entire day and leave us wondering if we should have packed a suitcase and arranged for bail.

Bring your support system — assertive friends

“The Internet makes it fairly simple for new car buyers to discover a realistic price, yet there still is a great deal of old-fashioned bargaining possible over price and especially trade-in allowance. Many buyers are often terrified of price haggling, setting themselves up to pay much more than necessary, often sending this message: I just want to sign the contract and get out of here,” the general manager at one Central California Honda dealer told You and the Law.

He was describing nurse Debbie.

“Unless that type of a customer comes in with assertive friends, an almost certain result is overpaying. But there are huge traps even after a price has been worked out, especially if the customer has driven a hard bargain and the dealer is making less on what we call ‘the front end’ of the deal than desired,” he added.

“The focus will then be ‘on the back end’ selling, services or warranties, such as the Platinum Shield — for around $1,000 — where customers get a Scotchguard-like treatment for the seats, a questionable paint coating, VIN etching on windows, lost key insurance, and in my opinion something which has not been needed for years, regardless of where you live, undercoating — all of it pure profit for dealers,” he stressed.

‘Start by raising doubt, worry and the pressure begins’

“There is a well-rehearsed strategy which plays to the natural desire we all have to avoid expensive repairs. You will be told that the car has a basic 36,000-mile warranty and asked, ‘But what happens when it expires? A new transmission or engine costs thousands of dollars! And no one knows how soon after the warranty expires that things can go wrong, but you can protect yourself now by buying extended warranty protection, which only costs …”

“But today it is the rare car indeed that does not go well beyond 100,000 miles before any real problems arise. Few extended warranties are ever actually used, and pay high commissions to dealers. For some people who plan to drive a car until the wheels fall off, they can be a good purchase, but you can always buy these warranties later.”

‘You can’t leave’

There was one more thing the general manager told us:

“There is also a strategy at some dealerships to wear you down by making it difficult to leave — even if you make it clear that all you want to do is to buy the car and do not want anything extra. They will say, ‘For your benefit, before we sign the sales agreement, it’s required that you meet with our finance manager concerning the protection plan and extended warranties.’

“But, the guy is always in a meeting, ‘And we’re sorry, but I can let you go until he talks with you,’ so hours can go by, with one clear objective; that you will just agree to anything to get out of there!”

‘Either she signs now, or we’re going to XYZ Honda’

The greater part of a day had elapsed in helping Debbie buy her car, and after waiting almost an hour for “the finance manager” to see us, it was clear that I had a story to write.

Walking into his office, I met a mid-20s, arrogant jerk. “You have a choice. Either Debbie signs the contract now, or we leave. No more delays. She is not buying anything except a car. Do you get it?”

Today, she is the happy owner of a lovely Honda Accord in white orchid pearl.

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.

The post Before you go shopping for that new car appeared first on Dennis Beaver.

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.

The post Shopping for a new car? appeared first on Dennis Beaver.

Shopping for a new car is rarely a happy experience, even with so much information available online or in magazines such as Consumer Reports, as survey after survey reveals.

“It’s as if you are playing a game of cards and suddenly realize there are rules that no one told you about,” observes Ray Lopez, a 30 year “veteran of some of the worst sales behavior imaginable,” as he told us during one of the most interesting interviews with an author we have ever had.

Now retired, Lopez is dedicated to helping the public become smarter shoppers, and has done this remarkably well, with “Inside the Minds of Car Dealers.” So, if you are looking into the purchase of a new car, we recommend first reading his book.

One strategy saved a You and the Law staff member almost $4,000.

A magic show — Smoke and mirrors customers never see

“Think of a car dealer’s lot, showroom and hours of operation as a magic show — where the sales staff are the magicians, customers are the audience, seeing but not seeing the way in which they are manipulated,” he notes.

“Everything about the physical layout of the dealership-from where the sales people are ‘stationed,’ to the location of the sales offices – it’s all designed to catch you off guard, so that we can take advantage of your lack of knowledge.”

And it is precisely that — knowledge and insight — which Lopez gives the reader.

What’s the best day to buy a car?

“If possible, shop for a car on a weekday,” he points out, explaining, “Customer traffic is generally slower, allowing for the salesperson to give your more time and obtain a better price from management.

“But not mornings!! Absolutely not mornings or evenings!” Lopez insists, and the tools provided by this section of his book can easily save you hundreds to thousands of dollars.

“A morning arrival is someone who can’t wait to buy a car, and for me, is what we call a real lay down. I will get sticker price — or close to it — plus all kinds of extras you don’t need but which fattens my commission check.”

“What’s the problem with being an evening shopper at a dealership that’s open late?” We asked.

 “Consider this as dinner time at the zoo for lions — And you are on the menu!”

Walk in late? You’re tagged as a lay down

 “The fact that you are coming in that late tells the salesperson:

• You want — likely need  — a car and do not want to leave without it.
• This customer is really tired.  All they want to do is to get the car and go home.
• I can convince you that this is a great deal, that I am your friend and we are going to rush this through so the car can be driven home tonight.  So, they play on that, the term we use is, We play you.
• We work the “I’m your best friend” angle, telling you that we will give you our best offer up front, no need for a back and forth, we are going to help you.
• It is very much like a police detective, becoming your best friend, so your suspicions are never raised.

Trade-in or run an ad?

“Can I get more if I sell instead of trading in?”

“That question is asked by just about everyone, but it is not the right question to be asking,” Lopez maintains, and we completely agree.

“Yes, you can almost certainly get more selling it yourself, but think about what that involves.  First, you’ve got the expense of running an ad in the newspaper – depending upon how fast it sells; this could easily cost you several hundred dollars.

“But more than the advertising costs think of safety issues. Do you really want people calling or dropping by at all hours of the day and night?  Do you want strangers driving your car?

“These are important considerations, without even mentioning the legal issues involved,” Lopez points out.

“Simply because you sell your car As-Is does not mean that you are home free in the event it breaks down or there is a safety issue.  Your buyer could easily argue to a judge that you just had to know about a whole host of problems and kept quiet.

“So, trade your car to the dealer and eliminate those headaches,” is the advice of a car salesman who proudly admits to having “Gone over to the other side, and it sure feels great!”

The staff at You and the Law are happy that he did.

 www.insidethemindsofcardealers.com is well worth a look.

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.

The post What’s the best and worst time to buy a new car? appeared first on Dennis Beaver.