In this post I provide vehicle buying tips which will enable you to save thousands of dollars.
I am amazed by the number of people who spend a fortune on expensive vehicles and who, worse yet, create for themselves what becomes a perpetual monthly financial obligation.
I have had the pleasure of living next to a wonderful neighbor for 26 years who has been involved in the business of vehicle sales for roughly 35 years. Over the past couple of decades, he was second in comand at the local GM dealership. He had the pulse of what was going on at all times as his position allowed him to oversee the sales and operations aspect of the dealership and he interacted extensively with his counterparts at other dealerships (GM and other brands).
Just before Christmas 2016 we sat down over coffee so I could get his take on the changes he has witnessed in the industry. Of particular interest to me was the extent consumers were purchasing services/features that added thousands of dollars to the purchase price of a vehicle.
Based on our conversation I have compiled the following chart. It is a high level synopsis of the added services a dealership will to try to upsell. The price for these services vary between dealerships and, secondly, the current fees will likely change over time. I have, therefore, purposely excluded the dollar value for each line item. You can, however, expect to pay several thousand dollars if you agree to purchase all the add-ons.
There is no need to pay for additional treatment by the dealership. If you really feel you need it, get coverage backed by the vehicle manufacturer or an established third-party company. You do not have to buy on the spot. Take your time to compare contracts. Before you get too far in your negotiations, tell the dealership you will not pay it.
Toward the end of our conversation, my neighbor recounted what transpired during his recent purchase of a new vehicle (surprisingly not a GM!). He knew the tricks of the trade and clearly indicated early in the negotiation stage of the transaction what he would/would not pay for.
When it came time to pick up and pay for the vehicle, he had a bank draft for the remainder of the amount negotiated. The invoice he was presented, however, reflected an additional ~$500 admin fee and a ~300 loss locator fee. He indicated he would not pay these fees and was ready to walk and to take his business elsewhere. Within minutes the dealership eliminated these charges.
Clearly, my neighbor’s buying experience was not unique. Read what CBC’s investigative team uncovered in Manitoba.
You may want to seriously reconsider the need for the added services listed within this post. You will feel grea knowing you saved several thousand dollars which can be deployed toward more important things.
Part 2 of this post will address the financial aspects of the vehicle purchase. I will also present statistics on the magnitude vehicle related debt in the US and Canada.