The dealership can be a overwhelming place to many consumers. They are under the strange notion that the dealers there are there to assist them with the best deals. When in reality they are there to get the vehicle sold for the best price to the dealership. Relying on the dealer to help you sort through the terms and jargon that is passed to them from the dealership is a bad approach to purchasing a vehicle. Using this method you will pay much more than necessary simply because you don’t understand what is being said.
Accepting this happens more times then we wish to acknowledge here are a few tips to tricks that the dealers use to squeeze out more profits from unsuspecting consumers:
Leasing over Purchasing a Vehicle:
Many dealers will tell you that leasing is a better deal than purchasing, and lure you in with the promise of low monthly payments. Sounds good at first but as always there are loop holes. Many of the catches they don’t explain are the long contracts and stiff penalties for ducking out early on your lease! Among other things like limited mileage allowances, and hefty repair costs with additional charges for every mile you go over your contracted limit. Now you may say that a mere .10 to .20 cents a mile isn’t much but they will quickly add up!
Only a 2-3% APR on the Lease:
The dealer will only give you half the calculation in the interest rate. When in actuality you must multiply the 2-3% by 24 to get the actual interest rate. The dealer will quote you the lease money factor, instead of the complete rate to get you to feel you are getting a better deal. The formula looks more like:
3% money factor is instead 24 X .003 = 7.2%
Which is a lot different than the initial 3% he had stated before? This type of mix up could end up costing you a great deal in the end and though the payment s off. Make sure you ask them for the actual interest rate and not the money factor. Let them know you are familiar with their games and they will likely be straighter forward with you.
Early Lease Termination:
Many dealers exploit the consumers with this trick simply because people are happy with just knowing they can get out of their lease early and not suffer the penalty. However the very adult truth of the matter is many of our choices have a consequences. When you sign yourself into a lease you are just that locked in. The lease can be terminated early but you will suffer heavy consequences.
To avoid getting stepped on by the dealership and being on the short end of the stick, learn all you can about leasing before you sign one or talk with a dealer. After all they get paid more if they sell or lease you the car so they will tell you what you want to hear. Ask them questions, figure out how they came up with those numbers and most definitely ask them to show you how they got there. Do not sign the agreement because the dealer is putting pressure on you give yourself time to make a well informed decision. Whatever you do make sure you are not impulse buying give yourself a few days to think about it.
