A consumer who recently sought my advice about a new car purchase joked that after shaking hands with a car salesman "you should count your fingers."
Although exaggerated, his cynicism may be shared by many Canadians. Car dealers ranked No. 22 out of 23 professions (behind telemarketers and ahead of arms dealers) in a trustworthiness survey released last year by Toronto-based Pollara Inc. A mere 4 percent of 1,200 Canadians surveyed said they had a lot of trust in car dealers, with a full 31 percent of respondents saying they distrusted dealers a lot.
The results are no surprise to Kendrew Pape, a former car salesman and coauthor of The Essential Guide to Buying and Selling a Car in Canada. Pape believes that car buyers need to treat a showroom like a battlefield. Buyers who want to score the best deal must know their opponent's tactics and come armed with a strategy, ammunition and reinforcements.
"Like every other industry, the automobile manufacturers and dealerships have spent thousands of hours refining their marketing and sales practices to benefit themselves," notes Pape.
Here are tips to help consumers gain the upper hand in showroom skirmishes.
Don't go into a show-room until you've researched financing, pricing, features and reliability. Study car-buying guides. Never shop when you're tired, hungry, distracted or rushed.
If negotiations become protracted, dealers often bring in a fresh "closer" to clinch the deal. Consumers should bring along a friend to provide reinforcement and a fresh perspective if the haggling drags on. A trusted friend can also keep you from overspending or getting too emotional about a purchase.
Bring a notepad, calculator and test-drive checklist. Carry business cards from competing dealerships to pull out and ponder if negotiations stall.
Don't leave a deposit unless you're absolutely certain about a purchase or unless conditions of cancellation are written on the agreement. Deposits can be nonrefundable and forfeited if a buyer backs out of a deal.
Driving down the price of a vehicle is only half the battle. Dealers also try to sell you expensive add-ons. "The classic mistake consumers make is letting their guard down once negotiations on the car price are over," says Pape. Beware of option oversell and know the pros and cons of high-markup items such as fabric protection, rustproofing, paint sealer and extended warranties.
Beware of camouflaged costs
Sales staff are adept at massaging figures to create affordable monthly payments. But when you add in insurance, gas and maintenance, your driving costs can quickly balloon from affordable to unmanageable. Never lose track of the total cost of driving a vehicle.
Would you pay a furniture store an extra $250 simply to process a deal for a bedroom suite? Yet some car dealers expect buyers to pay up to $250 just to handle the paperwork of a car deal. "What you're really paying for, in most cases, is a crock of nothing," says Pape. Car buyers should save their objections until they're about to sign the papers. To close the sale, the dealer should waive or reduce the fee. Also, if you're charged for gas, make sure the tank is full when you get the car.
Make sure any offer on a used car is conditional on a detailed inspection by a technician of your choice and a check of the ownership history. Some dealers have little or no idea of a car's past. Others may have convenient lapses of auto amnesia when asked about accident damage or mechanical problems.
If you need a car in a hurry, make sure a specific delivery date is written on the contract. Without this, the dealer may have up to 95 days to supply the car. You could be stuck without a car or any cancellation rights for three months.
Maryanna Lewyckyj is consumer advocate for the Toronto Sun. She conducts car care seminars for women through her company, Autophobics Anonymous.