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Your
Car as “Piggy Bank” – Part Two
Impatience
Costs You Money
When
you are looking for your new vehicle (whether it’s brand new, or just new to you), you’re
eager—who wouldn’t be? But be careful – and
patient. Buying the car immediately can result in you
leaving quite a bit of (your) money on the table. Why?
Because by not taking the time to properly research
the car, costs, dealer promotions, and financing options,
you could end up with a deal that doesn’t benefit
you as much as it could (or should). Below are just
a few of the real-life examples of this we at Frank
Price Company see every day.
Example One
We had two clients interested in Nissan Pathfinders.
We encouraged them to wait two or three weeks because
we felt that Nissan would come out with zero percent
financing very soon. One client wouldn’t wait,
and we helped him get the best deal we could on his
car. But he ended up with a 5 ½ % interest
rate, while the other buyer purchased the same car
few weeks later—but with zero percent interest.
The buyer’s impatience cost him roughly $4,000
in interest over the length of his loan. We don’t
always know what promotions may be coming, but there
are certain promotions that manufacturers offer every
year around the same time—and we like to use
that knowledge to our clients’ advantage, if
they let us.
Example Two
Another client wanted a one-year old, four-wheel drive
Toyota Sequoia. He called us, but only waited a couple
of weeks, then bought the car from North Carolina.
Because four-wheel drive vehicles are more popular
in NC than SC, they sell for more in NC. The client
paid $2,000 more on his new car than he would have
paid in SC—bad enough—but to add insult
to injury, exactly three days later, we found the
exact car he’d originally wanted: one year
old, 7,000 miles on it -- for $8,000 less. This client’s
impatience basically cost him $10,000. Most of us
surely don’t have $10,000 to waste. Having
a buying agent would have helped him and his impatience
cost him plenty. Even if you don’t have a buying
agent, we can’t emphasize enough that
you have to do the research. Most people don’t have
the time or background knowledge to do this research
thoroughly enough—and that’s where Frank
Price Company can help. Years of experience and contacts
in dealerships all over town mean that you can benefit
from our expertise.
Example Three
Another potential client called Frank on a Saturday
night at 7:30 p.m., after spending the day at the
Infiniti dealership. When Frank returned the call
Monday morning, the man had already bought the car.
If only he’d known: we had just secured an
identical car to what he bought, and from the same
dealership, a week or so before, and our client paid
$1,400 less than what this man paid. Chump change?
Not to most of us!
Example Four: Same Applies to Used Vehicles
People seem to think they can buy a used car in a day
or two, but the fact is, most used cars on car lots
are not the most desirable. You should consider three
things when you look for a used car: reliability,
background/history of that car (has it ever been
in a wreck), and finding out if the car was maintained
properly (this can be verified by the service record
on the car, either from the dealership or the former
owner). After these three are right, then you
must determine if the car is priced reasonably.
We
look for cars that fit the bill on reliability, history,
and maintenance, then we balance those factors
against the asking price. Generally, the very cheapest
car you can find is probably not the best (there’s
usually a reason it’s the cheapest), but you
shouldn’t pay the most, either. You shouldn’t
pay top dollar because, after all, it is a used car.
Dealerships often don’t see it that way, and
if the car meets the first three criteria, they will
put a high sale price on the car.
How Much Profit Is Reasonable?
Most dealerships average $2,000 - $2,500 gross profit
on used cars, whereas when we broker the deal, it’s
generally between $800- $1200. On new cars (excluding
higher end models), the dealership’s profit
is approximately $2,500. For most new cars we broker,
the dealership’s gross profit averages $300.
Quite a difference, and especially when it’s
your money.
Why Can You Benefit from A Buying Agent?
One potential client called us but before we could
take action, she said she bought the car (an RX300)
from the dealership because they told her there were “no
discounts on that car”, so she figured she
didn’t need Frank’s help. But the salesperson
didn’t reveal all he could have, and we could
have gotten her a $2,000 to $2,500 discount on that
RX300.
We
know you’re excited about your purchase and
you want your car as quickly as possible. But if you’ll
have a bit of patience—not too much, but just
a little—we think you’ll see that Frank
Price Company can save you money and help you get the
best deal you can. Don’t be the next “example” in
our newsletter!
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