Believe it or not there are secrets that the auto industry wants its customers to know about, but really never goes out of its way to tell them that the industry would like them to know about them.
The first is simply this: if you are looking for the best deal on a car, wait until the end of the month; thats it, theres nothing more to it. Oh, the car does have to be paid for in the same calendar month so dont go into the dealership so late that you wont be financed until after the new month starts, even though the deal was begin on time.
The second is that as the year winds down youll find your best deals, as well. Taking this to the extreme, if you want the best possible deal of the year, outside of the day after Thanksgiving that will have come and gone by the time this piece is out, and then the last week of the year in December just before the new year starts.
This information, by the way, was gleaned as a result of selling cars at various dealerships for nearly six years both online and on the sales floor.
Indeed, todays buyer is probably more knowledgeable about the car that he or she is trying to buy than the salesman might be, especially if its an off-brand preowned model that just happens to be a great deal.
The reason that buyers are so up-to-date on their car knowledge is quite simple: the Internet. You can go to sites like Edmunds or AutoTrader or Cars and find out quite a bit about the cars in which you are interested. Then, if you go to KBB (Kelly Blue Book).com and plug in some numbers you can find an approximation of not only what you might be paying for a vehicle, but also what your vehicle is worth. (Be honest with your estimate of its worth and remember that dealers can detect repaints and replaced parts. They will knock the value of your trade down its sad, but necessarily true because dealers cannot pay the sky-high prices that many buyers think their cars are worth.
With all of this information at the buyers fingertips, its little wonder that margins are getting smaller and smaller. Its simply because buyers know how much a dealer spends for a car and can then figure out the trade value of their car and then can do the math. They then begin their negotiations with some unrealistically low figure, knowing the dealership will have to come down from its figure and the final figure is usually somewhere in the middle.
If, however, the buyer is really aggressive and pushes the dealer and the dealership needs to move the car, then the buyer may be surprised at the sweet deal he or she may be getting, simply because the car dealership:
- Needs to move the car.
- Needs to make its own quotas to keep its inventory coming
- Needs to make its own monthly forecast
The salesman is the person who feels this the most because the money has to come out of some part of the deal and it usually comes out of the part of the deal where the salesperson has traditionally earned his best commission. Truthfully, the closer to invoice the salesman can sell the vehicle, the more commission he will make.
Dealerships are very seldom concerned about what their sales force is actually doing or if they are surviving (the car industry has one of the highest turnover rates in the business world) so they will take a short deal with very little profit to move one extra vehicle because it might just be the vehicle that helps the dealership meets its quota.
Lets put theory into practice for a moment with two mythical buyers, one who just had to have the 2009 Blattmobile early in the month so he could show off to his family just how well he is doing. The second buyer is the person who bides his time. Who do you think gets the better deal?