Buying a car can feel like a complicated process. Although dealerships are partly responsible for consumers’ negative feelings, you shouldn’t believe everything you hear. Here are 12 myths about car dealerships that you should stop listening to because they are outdated, made up, or just wrong.
Myths Are There To Protect You
Myths about car dealerships come from customers who want to be treated well and get a good deal on an expensive purchase. However, car dealerships have changed significantly over the last couple of decades. They use different methods to ensure they satisfy customers and make money. It’s more important now than ever to know the myths to approach the car buying process right.
Last Minute Trade-In
You don’t need to wait until the last minute to tell the salesperson you want to trade in your vehicle. This is called “parachuting.” Salespeople see it as a customer’s way of knowing the exact amount of their trade-in, which can be muddied by other numbers in the purchase. Asking an honest dealer to clarify the numbers in your deal can lead to a clearer picture of your trade value before you get that far.
Dealers Make Lots of Money On New Vehicles
Most dealers in competitive markets take losses when they discount new vehicles. The lack of a new car supply after COVID-19 factory shutdowns made dealerships more profitable, but this changed quickly, and dealer profits dropped by over 30% last year. Managers often chase money from the manufacturer’s sales goals, loans, and warranties instead of the car itself.
Cash Is King
Cash is no longer king with narrowing and even non-existent profits on new vehicles. Some dealerships offer incentives for financing through them. Thankfully, you have the option to pay off a car loan early or refinance.
Buying At The End of the Month
New car dealerships run on an incentivized schedule through their manufacturers, ending on the last day of the month. As long as they hit their target, they get manufacturer bonuses. The challenge and myth here is consistency. You might head into a dealership expecting significant savings, make an offer, and get turned away. The dealership may have already reached its goal or be so far away from it that making a deal isn’t worth losing money over.
There Is An Internet Price
Most dealerships don’t offer discounts when you buy through their website. However, many customers shop through the website anyway and can see all the potential discounts the dealer has to offer.
Dealership Finance Rates Are Always High
Your bank could offer a lower interest rate, but only sometimes. Car manufacturers frequently have special interest rates to encourage new and used car sales, which could be lower. It doesn’t hurt to check both.
Dealerships Don’t Recondition Used Cars
In some cases, legitimate dealerships have legislation that requires recalls to be fixed. Dealerships might still skimp on repairs that don’t need to be done immediately. You should carefully evaluate the vehicle for signs of noticeable wear and tear and check the brakes and tires especially. Otherwise, a good dealer will make the necessary repairs.
Special Orders Cost More
Want to order just the right color and package of sports cars or trucks? Special orders costing more is a partial myth. First, special ordering just the right vehicle might mean better value if the dealer only has vehicles with extra, costly features. On the other hand, there is a chance you could lose or gain incentives from the manufacturer or dealer since you won’t pay the day you place the order. This one is a toss-up.
Customers Don’t Need Dealers
Some customers believe that they can rely on independent auto shops and private sellers on Facebook and Craigslist to fulfill all their automotive needs. Not really. Even Tesla, the only car company selling directly to consumers, has considered opening dealerships.
Dealerships are a major source of used cars for people who don’t want to buy from a private party. Dealerships can make manufacturers pay for warranty work and have sued car makers over wrongful practices.
Get A Better Deal On Rainy Days
Don’t forget about snow, too. Some customers perceive rain or snow as slowing the car business down, making a rainy day a prime opportunity to get a better deal. Since most customers begin their research online whenever they want to and spend less time on the lot, the weather doesn’t matter much.
Dealers Don’t Want EVs
There is a grain of truth to this, but it’s not why you might think. Modern dealerships are set up for gasoline-powered vehicles. Equipping a dealership with fast chargers and other equipment to make electric vehicle sales and service possible on a large scale is expensive. For example, some Ford dealerships opted out of the investment, forcing manufacturers to relax parts of their electric vehicle program. Dealers want to sell cars, no matter what kind they are.
You Must Service Your Vehicle Where You Bought It
This myth probably comes from knowing that car dealers make more money from service than sales. Fortunately, dealerships don’t often have secret knowledge about your car that would prevent an independent repair shop, another dealer, or you from fixing your vehicle. The one shred of truth here is that a dealer may sell you their warranty, which requires at least some services to be taken care of in-shop to keep their guarantees. Be sure to read the fine print.
You Need To Be Ready To Negotiate
Some dealers ask for the opposite of negotiation. Instead, they advertise a no-hassle buying process with market pricing to avoid awkward, time-consuming negotiations. Rather than negotiate, wait until a vehicle price is lowered to the amount you are willing to pay, then jump on it.
Dealerships Always Want To Steal From You
Dealerships have earned the nickname “stealerships” from consumers believing they use unethical methods to make more money. In all fairness, some dealerships, salespeople, or service advisors may try to confuse or pressure you into spending more. The reality here is that dealerships want a positive reputation. They know that too many people out in the community saying bad things along with negative Internet reviews isn’t good for business. They aren’t all like that.
Some Old Knowledge About Car Dealers Isn’t True Anymore, So Knowing About Myths Will Help
Dealerships have changed a lot. Now that you know more about financing and negotiation, you can confidently approach dealers, at least at a reputable dealer. You should still walk away if a dealership tries to hide numbers or requires you to pay for additional things you don’t need.
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