"Penny and a pen?"

by Dom Genova

I have to say it's the biggest misconception in the car business. Most people believe that bigger dealers can buy their vehicles from the factory for less.

They can not.

It is right in the dealer franchise laws but this poses a problem for a lot of dealers as one dealer does not have an advantage over another.

This becomes a problem for you, the public, and follow my logic.......................

IF dealers pay the same price for their new cars and trucks, it compels some dealers to claim that they can offer you a deal that others can not.

Lets debunk some of these offers:

"Penny and a pen !" :  Anyone can get 100% financed if their credit is good enough or they put 100% down!

"We finance everyone !" :  This is usually a claim on older cars. The dealer gets the entire cost of the car as a down-payment and the balance is financed. If the car is repossessed he still has a claim against the balance. We all know that there is no legitimate way to loan money to people that do not pay it back. Not everyone is credit worthy.

"We give you $5,000 over book-value for your trade-in !"  : Sure, if the dealer is including the $5,000 rebate you would get anyway ! So think of it this way, if a dealer was going to give you $5,000 more for your used car than it is worth he would have to sell it to SOMEONE ELSE for $5,000 more than it is worth or charge you in some hidden way for the 5 grand.

"We know what others paid for their car and our price is the lowest !" How? Does everyone want exactly the same car, have the same trade-in, have the same credit ? I do not believe this hooey for one minute.

"0 DOWN!" : The word "down" can mean many things, a direction, goose feathers, or money to reduce your payment. ON A LEASE, the word "DOWN" means money that is used to reduce the cost the dealer sells the car to the lease company that is going to lease the car to you. It does not mean "0 out of pocket" ! There could be plenty of fees and conditions in the small print that hide the fact that you can technically advertise "0 DOWN" but you have to come up with thousands!

"Used cars from $79 per month !" Literally, I saw a mailer for a 10 year old car with 118,000 miles that was advertised for $79 per month for 72 with $1,000 down. The problem here is that its a 6 year loan and I bet the car lasts only a year or two ! I tell customers to make sure the car will last at least the life of the loan.

 "All rebates applied!" in the small print  Simply stated, most times this means the advertised price is not actually available. Read the small print in the ad, it can be comical. I saw one ad where you have to be a recent college grad, in the military, employed as a real estate agent, owning a competitive lease, have a direct mail coupon from the manufacturer and (get this!) have bought a CASE FARM TRACTOR in te last 12 months. You needed all that for the price to be good.

 

All the above is the tip of the iceberg and does not include the "fake keys in the mail", tent sales, blowout sales, "my brother-in-law ordered too many cars and we have to get rid of them" sale, I am sure I can think of more but you get the picture!

If you have your own story about your experience with stuff like the above, please tell me, I would love to know!

My e-mail address is wnydealer@aol.com

Regardless, be careful out there, read the small print and go to a dealer who wants to sell you a vehicle in a transparent way. They are out there and paid the same for their inventory as everyone else!

 

Dom