Deals on wheels: Part 2: you've calculated dealer costs, taken your test drives, and mapped out your payments. Now you're ready to deal

Tools of the Trade, Sept-Oct, 2005 by Michael Springer

Be Resolute. If the vehicle the dealer locates for you has extra features you didn't specify, negotiate out the extra option costs. Be especially vigilant about any added extras presented to you at this time. This is the last chance for the sales staff and finance manager to squeeze more profit out of you. You're more resistant to their tactics if you're a cash or cash model buyer since they aren't responsible for providing your financing, but in any case, remember that your research has led you to exactly what you want to buy already.

Don't let them force insurance or warranties on you that you don't need and refuse any dealer-added options such as an alarm system or dubious paint, fabric, or rust-protection treatments. If the dealership has already installed an item and added its price to your accepted offer amount, cross the line out on the invoice and don't pay for it. Make sure you get every promise that you were made in writing and scrutinize your buyer's order and invoice for any listed items that you don't agree to pay. Even if they don't make a large profit from your purchase and trade-in, the dealership still has a stake in getting your business because you represent a continuing source of profit through ongoing parts and service needs, along with the potential for subsequent vehicle purchases.

BUYER/BROKERS

If after reading this you decide you don't have the time or patience to follow all the steps, you may look into automotive buying services or brokers if they're allowed in your state.

For a fee, a service will negotiate and arrange for you to pay for the vehicle at the dealer. A broker, on the other hand, is a multi-brand order-based dealer with no inventory. In other words, he'll take your order for the vehicle you want. Along with using their experience and market knowledge, both gain discounts by buying through the fleet side of the dealership, which emphasizes volume-based sales, rather than the consumer side, which focuses on higher-margin individual sales. Brokers have no inventory overhead, buy wholesale, and can take advantage of regional sales slumps to save by ordering vehicles from other parts of the country.

Verify that special manufacturer's financing can still be obtained if its use provides your best deal when buying through either type of service. Remember, using a service or broker doesn't guarantee you'll get an overall better deal than doing the work yourself, especially after you add in their profit.

COMMERCIAL TRUCK BUYING

Depending on your situation, it may be advantageous to buy your truck through your business for liability, depreciation, or tax purposes. Different business models (sole proprietorship, LLC, Inc.) and varying state laws make it impossible to generalize any benefits, so check with your insurance agent and accountant or tax professional. Dealers may offer discounts on commercial upfit packages and service benefits for business users, but check if you qualify.

Some programs may require you to buy a fleet of vehicles for eligibility. Be aware that commercial use of your new truck can affect its warranty protection, too. Dealers might say that most commercial use is covered under the standard warranty, but it's wise to check out your specific situation and get its warrantability in writing. Any extended warranty purchase may have to be specified commercial and will typically offer less coverage or be more expensive.