A car dealership or vehicle local distribution is a business that sells new or used cars at the retail level, based on a dealership contract with an automaker or its sales subsidiary. It employs automobile sales people to sell their automotive vehicles. In the United States, direct manufacturer auto sales are prohibited in almost every state by franchise laws requiring that new cars be sold only by dealers. Used car dealerships carry cars from many different manufacturers, while new car dealerships are generally franchises associated with only one manufacturer.
If you’re looking to buy a used car, you’re far from alone. Between private-party and dealership sales, nearly 40 million used cars exchange hands each year.
Buying a Car
If you’re in no rush to buy a car, the end of a model year is a great time to get a deal. Determining when this is for a particular car can be difficult, but if a dealer has two years of a new vehicle on its lot (say, 2014sand 2015s), chances are the older ones are going to be priced to move. The last week of the year is another good time to buy. You’ll find lots of specials and manufacturer incentives at both times of year.
If you’re looking to get information on a car or talk about a deal, but you aren’t quite ready to buy, a weekday afternoon is a great time to go visit a dealership. You’ll get more personal attention than you would on a busy weekend.
Don’t be afraid to listen to dealership suggestions. I’m not talking about bait and switch, but salespeople offering really good alternatives. When I sold cars, it was common for people to come looking for a particular model because of its low sticker price, but then drive out with a nicer car at the same or a lower price, thanks to the special programs and incentives that they didn’t know existed.
If you’ve already picked out a car from a dealership’s online inventory and worked out a price, do as much of the deal paperwork you can get over the phone. In many cases, you can be in and out of a dealership inless than an hour if you started the deal-making process online and over the phone. Why sit around in a showroom if you can avoid it?
Test-drives are still an important part of car buying. Bring along the people who will regularly ride in the car with you, if possible. Have them try all the seats. It’s better to learn that your teenage son doesn’t fit in the backseat before you buy the car, not after.
When you’re trying to negotiate a lower sales price, give the dealership a reason to discount the price. If you’ll use the service department, say so. If you’ll refer friends, be sure to say that, too. If you’re likely to give a perfect survey or buy a future car from them, share that with the dealership, too.
Check your insurance rates on the car you’re looking to buy before you buy it. This is one that people often forget to do when car shopping, and it can really come back to bite them. Here’s an example:
Make sure you really like the car you’re buying and that it really meets your needs. It sounds so obvious, but go check how many one- and two-year-old used cars sit on car lots. Most of them are trade-ins from people who just bought the wrong car. Take your time and make the right choice.
When deciding where to buy, read online reviews to help you pick a dealership. In addition to checking their ratings, see if the dealerships you’re considering include free perks such as lifetime oil changes or free car washes. Or free manicures and massages.
If you need an extended test-drive, just ask for it. One of my customers drove over a steep grade on her daily commute. It was 20 miles from the dealership, but because it was very important to her to test the four-cylinder crossover SUV’s ability to climb the hill, that’s where we went. A good car salesperson will understand your needs, and let you test the car accordingly.
It’s smart to ask if you can drive the car home and park it in your garage. Most dealerships will go along. Yes, I have seen people buy cars that didn’t fit their garage or parking spot. There’s no clause in the sales contract for returning a car because it doesn’t fit your garage.
If you’re serious about your music, bring some along to test out the vehicle’s audio system. Stereo specs don’t tell the whole story.
Never buy a car you haven’t test-driven at some point. Online specs and descriptions are not a replacement for a test-drive.
Don’t get caught up on only one aspect of a deal. There is more to an overall good deal than simply a low selling price. Pay attention to everything that’s being offered to you, including trade-in value, interest rates and additional costs.
If you’ve tried to buy the same car at five different dealerships, made the same offer five times and no dealer has accepted it, it’s time to face facts: It’s not them, it’s you. Or, more precisely, it’s your offer. You can either raise your offer or pick a less expensive car.
Get a good explanation of your new car’s features. I’ve met so many people who traded in cars after years of owning them without ever knowing how to use some of the features. And in some cases, they didn’t even know the car had a particular feature.
If you’re unsure of your credit standing (or you know it’s bad), bring a copy of your paycheck and a home utility bill to the dealership to prove you have income and to confirm your home address.
When you’re car shopping with iffy credit and you want the dealership to arrange the loan, go there while banks are open. Since the dealership will be trying to find a lender to write the loan, you’ll greatly increase your chances of getting approved for a car during “bankers’ hours.”
If your credit is really bad, don’t give up hope. You still may be able to get a fair car loan. Check with a big and big-name car dealership. Bring along a copy of your credit report and visit during bank business hours. Ask a sales manager to review your credit profile and see if there is anything the dealership can do for you. Get the general manager involved, if possible. (GMs are famous for not grinding you down. They just want to get the deal done.) Sometimes these dealership big shots can make deals happen.
Don’t overbuy. The most expensive model in the line isn’t necessarily the best one for you. I once worked with a retired couple who wanted a top-of-the-line car. They insisted on all the available bells and whistles. But they weren’t particularly tech-savvy and never really got the hang of the navigation system, which they didn’t really need, but which controlled both the air-conditioning and radio. They spent endless hours with me at the dealership trying to master the thing. I was happy to help them, but I think if they had skipped the pricey navigation system, they would have enjoyed the car much more.
Be very careful about co-signing a car loan. If the person for whom you co-sign stops paying, you’re on the hook for the money, or the poor credit reporting, or both. I can’t count the number of car shoppers who’ve run into trouble because of co-signing for friends, family or co-workers. The bank doesn’t care that your ex-boyfriend was supposed to make the payments and that you just helped him get the loan. That repo now belongs to the both of you.