5 Things Car Dealerships Don't Tell You

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kingr
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5 Things Car Dealerships Don't Tell You

Post by kingr »

Make no mistake, the average dealership - especially brand dealerships and other reputable, known car outlets - are above-board and wholly law-abiding, pleasant places to do business. Towards the lower end, however, reputation sometimes counts less and you can often find that after-sales service is either poor or non-existent at some less sterling dealerships. With that said, every dealership - yes, even that one at the new leafy mall, gleaming with hot stock - have a jargon and sales approach that allow for less than fuzzy feelings at times.

Is that Corolla “that came up from a branch in the Cape” really a lucky score up in Jozi, or was it actually the one that fell off the truck on the way up, now being moved sideways into the market? Is that premium you’re being quoted on a new Golf really exclusive of insurance, additional warranties and other add-ons, when you’re looking at it on paper? And that awesome, sporty Beemer sedan - did you happen to notice that it has an engine change recorded in its history? The new engine might have been popped in after clients drove the heck out of it as a demo model up until a few months ago.

While jaded petrolheads know this of the industry, it’s often alarming for the average householder picking up a “new” sedan for the school run that their car might previously have been in pieces on a highway somewhere. Certainly in the top end of the used car market, most buyers assume that the car is almost-new and was probably sitting somewhere unwanted, or locked up in a little old lady’s garage before you came along to scoop it up. But perhaps the often-encountered grumblings after a car deal hinge on legitimate observations of how buyers are ever so softly steamrolled into signing on the dotted line, unaware of pertinent aspects of buying a dealership car.

While not a train smash, as the dealership is not fraudulently presenting a car as something it isn’t, the salesman also knows only too well that if he adds “Of course, this car had extensive accident damage but all good now!” that it will turn the average buyer right off. And while even the majority of buyers might consider stripping and fine-tuning line items in a finance deal unnecessary, this is precisely what dealerships often trade on to bundle everything in their favour. Although industry-speak probably works just fine for most car buyers, here are five things you might not know about selling to and buying from a dealership.

#1 Dealerships don't always buy your trade-in car

While not a real concern in terms of any legal or other sense, many buyers “selling” their old car to the dealership when buying a new one don’t know that often the dealership isn’t buying their car at all. That car goes to an associate dealership or gets posted on autobid to be sold off as a necessary evil. Based on volume and other incentives from automakers, many dealerships factor your car in as a throw-away they can afford to treat like so much junk, as their focus is on new car sales, not optimising all vehicles they deal with.

Perhaps the majority of motorists couldn’t care less what happens to their old car, but some might have a bit of a sore heart knowing that their loyal old baby doesn’t necessarily get some spit and polish and a position on the dealership’s floor, but rather ends up lost in an impersonal secondhand market.

Related: 5 Reasons A Car Dealership Offers You A Low Trade-in Value

Some dealerships might legitimately be unable to put your car into stock, as speciality dealers like brand or performance car dealers have a specific product approach to maintain. Just because a Polo is the most popular car in South Africa right now, doesn’t mean that every dealer will happily pop one onto their showroom floor. Some dealerships are limited in range for good reasons, and many more are simply limited in terms of available space, so don’t be surprised if your old car disappears completely after the sale.

#2 Extended Warranties - you have options!

A persistent bugbear of back-office deal-making remains the fact that - with very few legitimate exceptions - you always have options on an extended motoring warranty. A dealership might gloss over this, or speak in such a way as to promote their desired warranty option that may or may not be in-house or otherwise more beneficial to them, not you. The fact remains that you have the option to choose your own extended warranty, even if an extended warranty is a stipulation of the deal.

For example, while a dealership might have a certain car or two that comes with predetermined, non-negotiable warranty stipulations, you have the right to choose any extended warranty when financing a used car, as long as it meets the requirements imagined within the finance deal. In other words, if Warranty “A” offers the same benefits in terms of genuine mechanical insurance that is mandated by the finance house, you don’t have to take Warranty “B” that’s being bundled in the deal.

Related: The 3 Best Extended Motor Warranties For South African Car Owners

Even where an extended warranty is a proviso for finance, you can choose a suitable warranty that you’d prefer. Honestly good dealerships won’t try to plump up their score on extended warranties, but very often are offering you the genuinely best option for the vehicle. Never forget, however, to ask and check for yourself to see what’s available, as even great dealerships don’t make a habit of reminding you of your options here.

#3 Car Finance - you have options!

Broadly, you can finance a car deal with any company you wish. When sitting in the office, imagining what it’s going to be like driving your new beauty home, it’s easy to forget that even brands with their own finance facilities - Audi Financial Services or Volkswagen Financial Services for example - cannot preclude you as a South African consumer from shopping around for finance. Let no dealership force a major brand or major finance house on you as the “sole” financing option - it’s simply not true.

Related: What you need to know about car finance

Very rarely, a car might somehow be “attached” to a certain financing option, but to imply that this is standard for the dealership or even the industry would be wrong. Also, just because there’s a Wesbank Finance and Insurance consultant on the floor, doesn’t mean you have to take Wesbank finance on the deal, for example. You have the right to look at all financing options when arranging to finance a car, but because of internal politics - typically linked to profit motives - this truth is often at least obscured, if not avoided all together.

#4 Car Insurance - you have options!

Very much like extended warranties, you might find out months after the sale that you can do much better on insurance than what you originally imagined. A car dealership has a limited responsibility to suggest market-related insurance for your new purchase, but don’t expect for a moment that even within that service they’ll be looking out for your interests.

Look at all available options - call around - and remember that you have the right to pick your own insurance company when buying your next car. It’s very useful to ask friends and colleagues with whom they insure their cars, as Hippo and other engines also don’t necessarily give you all the best options. Many smaller insurers exist, and many make a business out of trimming premiums to the bone, so use word of mouth and personal intel to sniff out good premiums too.

Related: What you need to know about car insurance

You might well find that a smart dealership gleans a great deal from a certain insurer and that their offer is indeed the best, period, but don’t generally think that anyone is optimising your insurance premium except you. This is another aspect of motoring often not extensively discussed when doing the deal, but it’s in your best interests to insist on your right to insure with whom you wish, based on your own homework.

#5 Car Dealerships sell accident-damaged cars!

This is probably the greatest shocker for some prospective buyers, as although the law categorises a write-off car as such, often precluding it from appearing on most dealership floors, the category of “accident-damaged vehicles” allows for huge scope, unbeknownst to most motorists. In a nutshell, if a dealership can have an accident-pranged car restored to an original cosmetic and mechanical appearance cost-effectively, and still sell it within their profit guidelines, it becomes an option to place on the showroom floor.

Further complicating things is the fact that these repaired cars are often once-removed. In other words, the dealership itself might not have done the restoration, and for many this just makes the whole deal less attractive. Of course, the vast majority of consumers never find out that their new baby was a yard wreck some time back, but if you’re the type of motorist who considers the amount of repairs to date to impact on reliability and even performance going forward, unknowingly buying a previously damaged car is going to leave a bad taste in your mouth. Although perhaps not mechanically malfunctioning, the lack of disclosure at the time of sale does constitute grounds for a car’s return, just for the record.

Very often, a belated concession on price is going to be the best outcome for all parties, assuming that the accident damage has no persistent issues that remain, and it’s merely unwelcome to know that you’re driving a once-pranged car. Of course, if persistent niggles remain because of the accident, your case for a return or extensive repair becomes watertight.

On the flip side, you might well feel assured - assuming the repairs are disclosed when buying the car - that they were affected at least under the auspices of a good dealership, if not actually performed by them. This can bring a measure of assurance, so it’s not all bad news. With that said, the rub comes in when previous accident damage is not disclosed, and most of us end up feeling somewhat cheated if we discover it down the line, as there is typically no price concession on repaired cars, lightly “masked” by non-mention, when buying from dealerships.

Conclusion: Just ask!

What then to do, when beneath the veneer of “how things are,” several other realities often lurk? Ask.questions Ask questions like “Has this car every been in a smash?” whether it looks brand new or not. Ask about insurance and warranty options on a car you fancy, asking to see comparable quotes and ask about the finance deal itself and shop around a little to see if you are offered a better rate elsewhere. It’s also perfectly acceptable to ask the F&I putting the deal together to find better quotes on aspects that bother you. Their profit ultimately hinges on the sale going through, so they’ll often make sure they shave the extra bits to ensure the sale happens.

It’s largely because we assume that the point of contact has been optimised for us, that we allow things to float through without the “hassle” involved. That might be a human tendency, but the smart consumer knows that business seldom optimises for anything except its own interests, so deconstruct everything and look at it fifteen times if needs be, before signing on the dotted line. Being willing to do your own homework at the time makes the average dealership recognise you as a savvy client, and what follows will be more a honest, detailed and ultimately affordable deal, in your favour.
Kurt #3337

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