Buying a car can be a stressful experience for anyone. For some of us, the anxiety begins before we start negotiating financing or even step foot onto a car lot. But no matter how eager you are to get the experience over with, or how persistent a salesperson is, you should never buy a car without being certain itâs right for you.Ron Montoya, consumer advice editor for Edmunds, says that dealerships are good at applying pressure. âThereâs always a sense of urgency that âtoday is the best day to buy the car,ââ he says. âWhile that may be true for the seller, itâs not always the case for the buyer.â
According to a 2018 Cox Automotive study, you may be tempted to give in to the pressure after spending a whopping three hours at a lot, which is the average amount of time buyers spend. But no matter the circumstance, you should always be prepared to walk away in the presence of red flags.
Like most things in life, a bit of preparation can go a long way. Here are some of the ways you can reduce your risk before approaching a dealership or private seller when buying a car:
Doing your financial homework can help you determine what price range is truly affordable for you, instead of letting a salesperson decide. Loan payment calculators can also help you get a realistic view of affordability by taking interest rates and fees into account.
Another factor in determining affordability is the amount of financing you get approved for. Having a loan preapproval from your bank or credit union, before visiting a dealer, has several benefits: it sets realistic expectations about the maximum sales price you can shop for and helps you avoid more expensive or even potentially predatory dealer financing. If the dealer can beat your preappoved loan offer either through one of its lender partners or through the manufacturer, youâll know youâre getting the best deal possible.
Montoya, who purchases fleet vehicles for Edmunds, an auto industry research firm which tests cars, says the best way to prepare for a purchase is to understand the market price of the car you want. You can do this by looking up values through sites like Kelley Blue Book or Edmunds, checking out a variety of ads and car-buying websites, and even by getting a few price quotes, so you can compare them to the offers you get from a dealership.
Having a sense of manufacturer and dealer promotions can not only help you narrow down which models to buy and which lots to visit in your area, but it can also help you understand if the dealer is truly offering a âone day onlyâ sale, or if itâs just a tactic to pressure you into buying.
Interacting with a salesperson whoâs been trained to haggle and close the deal might leave you feeling outwitted. Some level of stress is normal, but these are the real red flags to look out for:
For example, your trade-in value is lower than what you discussed or your monthly payments are higher. You should also look out for add-ons you didnât agree to, like an extended warranty or a âservice contractâ that increases the overall price tag. Montoya says it should be a deal-breaker when written terms donât match what you discussed.
Itâs easy to assume that signing a contract means your deal is final, but some dealers include contingencies, including âspot deliveriesâ that might be âyo-yo transactionsâ meant to intentionally deceive buyers.
If your contract states, for example, that your financing isnât final, you may be asked to come back later and get a different loan with worse terms, for the car youâve already taken home. If the dealer wonât state in writing that your financing is final, they may be breaking the law. This is a definite sign that you should walk away.
Brent Miller, executive director of a community center where musicians work, practice and perform in San Francisco, recently shopped for a new car. Miller says despite visiting a reputable dealership for his purchase, the salesperson repeatedly pushed him to make unwanted decisions. âIt was amazing how much pressure there was to sign the contract without reading everything, even before I had a loan offer,â Miller says.
If youâre encouraged to buy a different car than the one youâre shopping for, or to close the deal without looking over the numbers, Montoya says you should walk away.
Itâs a red flag if your salesperson gives unclear information about pricing and loan terms. If you canât get a straight answer on what your monthly payment will be, the length of your repayment term or your interest rate, you shouldnât sign a contract. A good tip is to keep your focus on the out-the-door price of the car â if you get the lowest price possible, a good monthly payment should follow.
If you feel a dealer is attempting to take advantage of you based on your citizenship status, income or other factors, you should go elsewhere. One way dealers do this is by marketing to you and conducting negotiations in your first language and then offering you a contract in a different language, with higher fees. Regardless of the circumstances, never sign a contract if youâre unsure what it says.
So youâve attempted to negotiate a deal with no luck, or youâre simply uncomfortable with the transaction. Itâs completely within your rights to walk away at any point before, and in some cases even after you sign your contract.
At this point, walking away is as simple as putting one foot in front of the other. Montoya advises that even if the dealer already pulled your credit information, youâre still under no obligation to stay. While you may be concerned about the hit to your credit, know that making multiple auto loan applications within a short period of time will have a small impact on your scores.
If youâre having trouble ending the negotiations, Montoya suggests shutting down persistent salespeople by shifting the blame to someone else, like your spouseâŚeven if youâre not married.
Whatever your explanation, walking away or telling the dealer youâre going to shop around is perfectly acceptable. If you really are interested in buying the car, walking away may also be a useful negotiation tactic.
Regardless of the time and effort invested by both parties, you are under no obligation to sign any contract youâve been presented. At this point in the process you can still simply say ânoâ to the dealer.
If you sign a contract and drive away with a car, but then get called back based on a contingency, you may be able to walk away from the deal.
If youâre called back because financing fell through, you can demand to get your down payment back and unwind the entire transaction. To complete the process youâll need to make sure that the application and contract are cancelled and that you get copies of all the documents.
If, on the other hand, you simply wish to return the car because youâve changed your mind, your options may be limited. Some state laws may allow you to return your car if you discover itâs a lemon, but contrary to popular belief the âcooling off periodâ unfortunately doesnât apply to cars.
In some circumstances you may have a special option to cancel, particularly when it comes to buying used cars. New York state law, for example, gives you a set amount of time to file paperwork and cancel your contract. Your dealer may also have a special clause that gives you time to reconsider and return your vehicle. But if neither your state nor your contract stipulates that you can cancel, your best shot is to ask the dealer to give special consideration to your case.
The best way to avoid a bad deal is to be your own biggest advocate. Educating yourself about market prices, understanding affordability and researching consumer protections in your state, all before you talk to a salesperson, can help you stand up to pressure and recognize red flags quickly.
Ultimately you shouldnât be afraid to walk away, no matter how difficult the dealer makes it to leave. Both the car and the financing have to work for you. âI want people to buy a car when its right for them and do it on their own time,â says Montoya, ânot a dealershipâs time.â
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