Buying a used car from a dealership - advice?

[funkedelic2]

Hey guys i am seriously considering picking up a car from a local dealership and would like some advice.

First off i should mention that this would be my first purchase from a dealership. Any car that i have owned in the past has been through private sales. I have always had the idea that dealerships were rip offs and that i could get a better deal privately. The only time i considered buying from a dealer was if i was buying brand new. The car i'm looking at seems like a good deal, plus it has all the options i want and the color combination i'm looking for.

The car i am looking at is not at a manufacturer dealership but an independent one in the city. Now here is where the questions come into play.

On the ad itself it says "finance rates start as low as 4.99%, everyone approved, blah blah blah". In my eyes, thats not a very good rate at all. I know its not a new car and i can't expect a 0 or 1% interest rate, but 5% seems steep. I have pretty good credit. Last time i checked i was in the 800 score. Will the dealership offer me a lower rate because of my credit, or am i still looking at getting fucked at 5%? I am thinking maybe it's best to get a loan from the bank if that's the case.

Which brings me to my next question. How much of the sales price can i look to knock off? I know factors come into play such as whether its priced well, how long it has been sitting, ect. But let's say the car is listed at 25k. What would be reasonable to ask off? I don't want to pay the list price, but then if im buying from a dealer, sales tax and "doc feeds" come into play as well. I'm just trying to figure out how much i can actually negotiate and come out with a reasonable offer.

The dealership states that the car comes with a carproof report and full mechanical inspection and which i imagine that they do in house themselves. Should i bother taking the car in some where else as well?

I know these questions might seem dumb or like common sense but just wanted to do my Reconnaissance before i actually went down to test drive or move forward with the vehicle. I Rather ask stupid questions then be stupid and over pay or get ripped off by a dealership like i've seen many other members have on this forum.

Thanks in advance for any replies and advice

[ExtraSlow]

Let's break this down into parts:
- Finance rates on used cars are always a lot higher than on new cars. 5% isn't actually that high compared to some I've heard. If you can get a bank loan for lower, or HELOC that shit at a better rate, do that.

- How much of the price you can knock off is anyone's guess. There are no rules, but you can expect that they'll play you for the fool in this regard. If you are serious, and ready to buy that car, or ready to walk, you have the power in that negotiation. If you have your heart set on one car you can't find anywhere else, they have the power.

- The mechanical inspection at a non-manufacturer dealership is worthless. If you value an inspection, pay for one at a trusted mechanic.

- I would run my own car proof check as well. I'm not a very trusting person when $25k is at stake.

- you should expect that they are trying to screw you on fees, taxes or trade-ins. Get everything in writing and make sure it says something like "includes all fees and taxes" near the total.

- Don't trust them to do any work or improvements to the car. If they say they'll fix someting before you pick it up, make sure it's fixed beffore you pay.

- Do not put down a deposit. Ever. If you want to buy the car, buy it all at once.

Good luck, I hope you get the car you want.

[funkedelic2]

Originally posted by ExtraSlow
Let's break this down into parts:
- Finance rates on used cars are always a lot higher than on new cars. 5% isn't actually that high compared to some I've heard. If you can get a bank loan for lower, or HELOC that shit at a better rate, do that.

- How much of the price you can knock off is anyone's guess. There are no rules, but you can expect that they'll play you for the fool in this regard. If you are serious, and ready to buy that car, or ready to walk, you have the power in that negotiation. If you have your heart set on one car you can't find anywhere else, they have the power.

- The mechanical inspection at a non-manufacturer dealership is worthless. If you value an inspection, pay for one at a trusted mechanic.

- I would run my own car proof check as well. I'm not a very trusting person when $25k is at stake.

- you should expect that they are trying to screw you on fees, taxes or trade-ins. Get everything in writing and make sure it says something like "includes all fees and taxes" near the total.

- Don't trust them to do any work or improvements to the car. If they say they'll fix someting before you pick it up, make sure it's fixed beffore you pay.

- Do not put down a deposit. Ever. If you want to buy the car, buy it all at once.

Good luck, I hope you get the car you want.

Good post, thanks ill keep a lot of that in mind.

[MGCM]

have u compared prices with kijiji? i personally would avoid used car places, they are out to make as much money for as little effort as possible. That almost ALWAYS means stop gap fixes to sell the car and then your stuck with the expensive repair(s) when their stop gap measures fail.

[funkedelic2]

Originally posted by MGCM
have u compared prices with kijiji? i personally would avoid used car places, they are out to make as much money for as little effort as possible. That almost ALWAYS means stop gap fixes to sell the car and then your stuck with the expensive repair(s) when their stop gap measures fail.

Yes I have. I compared private sale to dealer and its not too far off. Car is low mileage, 60k on it and still under manufacture warranty. According to the ad it's a one owner lease return and it's a 2010.

[Rat Fink]

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[Redlyne_mr2]

Originally posted by Rat Fink
How does a lease return end up at an independant dealer? Are they able to buy them at auctions as well? (I thought only the manufacturer dealers can buy those at in-house auctions).

What dealer is it? You can PM me if you want. I used to work at a dealer in Lethbridge and became familiar with many of the dealers in town. Some of the independant dealers in Lethbridge are downright SCARY and I wouldn't even buy a handful of 25 cent gumballs from their lobby. I would ALWAYS take a used car to a third party shop for inspection. You can PM me if you want and I can let you know of a decent place if you don't know of any.

Another thing you can do is have the VIN run through whatever manufacturer it is and get a warranty history report that will show you all the warranty work it has had done to it. If you can track down whatever dealer it had its services done at, you can get them to print a history of EVERYTHING (even oil changes) if you wish. If by some chance its a Ford I can get you the warranty history if you PM me your VIN - takes a minute- but I've always seen you drive euros so I doubt its a Ford. :rofl:

The franchised dealers get first right of refusal on lease returns, if they don't want the car it goes up to auction for the other dealers to buy.

As for the rate, if it's a non franchised dealer or if you're buying an older vehicle you won't have access to any cheap money. The low rates are generally offered by the manufacturer to promote the sale of vehicles on new and slightly used cars. If it's a cheaper vehicle or if it's older than 5 years it falls into the bank rate categories. 4.99% is a decent fixed rate, if you went to your bank looking for a car loan you'd be looking at 7 - 10%. Heloc's are a huge pain in the ass to setup and are a variable rate. Loc's are an option but again are a variable rate and require discipline to pay down as they aren't a fixed term like a car loan. There was an interesting study that came out that showed the average LOC car buyer takes 10 years to pay off their vehicle. Calculate the interest on that.

Rat Fink's suggestion about previous warranty work is an excellent idea, it will show you the vehicles past. Have them pull the carproof, it will save you $40, just make sure all 7 to 8 pages are there.

The all in price is very important, the dealer will charge fees against the car, that's part of their business model, just make sure you get the all in price and that you're happy with it.

Have them show you any recent reconditioning work. It will give you an idea on whether or not the dealership cares about the condition of the car they're selling you.

Good luck

[ExtraSlow]

Originally posted by Redlyne_mr2
Heloc's are a huge pain in the ass to setup and are a variable rate. Loc's are an option but again are a variable rate and require discipline to pay down as they aren't a fixed term like a car loan. There was an interesting study that came out that showed the average LOC car buyer takes 10 years to pay off their vehicle. Calculate the interest on that.
Just want to clarify that you can get fixed rate and fixed term HELOCs, or variable rate is also an option.

[msommers]

Deals can be had at used car lots but tread lightly. I hate to say this but assume everything they tell you is bullshit and do everything you would do when buying privately. Do everything possible to lower the risk, and 100% take the car to get inspected elsewhere. Frick I wouldn't even trust a dealership inspection conducted and their own dealership. With the VIN, you might be able to pull up service records if they were done at the dealership.

Again, just do everything you would do for a private sale. Protect your own ass as much as you can.

[Redlyne_mr2]

Originally posted by ExtraSlow

Just want to clarify that you can get fixed rate and fixed term HELOCs, or variable rate is also an option.

true true.. It's just when most people think LOC's they think prime or prime plus 1 which isn't always the case on fixed rate.

[funkedelic2]

Originally posted by Rat Fink
How does a lease return end up at an independant dealer? Are they able to buy them at auctions as well? (I thought only the manufacturer dealers can buy those at in-house auctions).

What dealer is it? You can PM me if you want. I used to work at a dealer in Lethbridge and became familiar with many of the dealers in town. Some of the independant dealers in Lethbridge are downright SCARY and I wouldn't even buy a handful of 25 cent gumballs from their lobby. I would ALWAYS take a used car to a third party shop for inspection. You can PM me if you want and I can let you know of a decent place if you don't know of any.

Another thing you can do is have the VIN run through whatever manufacturer it is and get a warranty history report that will show you all the warranty work it has had done to it. If you can track down whatever dealer it had its services done at, you can get them to print a history of EVERYTHING (even oil changes) if you wish. If by some chance its a Ford I can get you the warranty history if you PM me your VIN - takes a minute- but I've always seen you drive euros so I doubt its a Ford. :rofl:

It's a Calgary dealer and its not a ford, Pm'd anyway

[turbotrip]

used car dealers generally price roughly around 15% over what they paid. make sure you do your own mechanical inspection, and refuse to pay any of their dealership/documentation fees.

[Kramerica]

Never been in the market for a new car and every time I look at used dealer pricing it just looks retarded. Like everyone said get a third party to inspect the vehicle and be prepared to walk away, they need the sale more than you need that specific vehicle they're offering. I've offered what I thought was fair for a vehicle before, person said no way and I found a better deal afterwards only to have the original person phone me back up and say they'd like to take my offer afterwards.

[jdmXSI]

Extraslow and redlyne covered more than what I was going to say.

I would like to add is if you finance the car through them, make certian they do not put a "fuel cut off" in your car. I have heard of some non-manufactured dealers installing them on cars just incase the customer does not make a payment, they just cut the fuel supply and pick the car up... Just some food for thought since we had that happen to a client of ours and the only way they found out is because their fuel pump to failed and a tech noticed what they have done.

[Boosted131]

If you're worried about the financing rates just pay cash then you get it cheaper as well.

[RY213]

Why would a franchised dealer pass up on buying a lease return? I've seen some lease returns at independent dealers and always wondered this. Have they been in accidents or are lemons or something?

[Twin_Cam_Turbo]

Originally posted by jdmXSI
Extraslow and redlyne covered more than what I was going to say.

I would like to add is if you finance the car through them, make certian they do not put a "fuel cut off" in your car. I have heard of some non-manufactured dealers installing them on cars just incase the customer does not make a payment, they just cut the fuel supply and pick the car up... Just some food for thought since we had that happen to a client of ours and the only way they found out is because their fuel pump to failed and a tech noticed what they have done.

I have seen this fuel cut off and other jury rigged stuff on vehicles that come through our shop as well.

[turbotrip]

Originally posted by RY213
Why would a franchised dealer pass up on buying a lease return? I've seen some lease returns at independent dealers and always wondered this. Have they been in accidents or are lemons or something?

high kms, rough condition, history of problems, etc.

[SkiBum5.0]

Originally posted by RY213
Why would a franchised dealer pass up on buying a lease return? I've seen some lease returns at independent dealers and always wondered this. Have they been in accidents or are lemons or something?

Here is a scenario: Dealer X has 6 New Model A's on his lot that are costing him interest past 90 days.

Customer A brings back leased Model A. Dealer passes on keeping it because it would make it more difficult to sell New Model A. ie Any $ made on the used vehicle would be nullified by the cost of the New Model A's sitting on the lot.