By Car Buying Tips

By Robert Hammer and Stefanie Kelly

It’s Sunday morning and you’re scanning the classifieds. For months now, you’ve been thinking about buying a new car. Maybe today you’ll do something about it.

Then you see it: the car of your dreams, advertised at an unbelievably low price. But there’s only one available.

Now you think one of two things: either you’re going to hurry down to the dealership to take advantage of the price or you’re going to call to see if the car is still available.

Without knowing it, you’ve just fallen into the loss leader trap. A loss leader is an ad that seems too good to be true. It is a tactic employed by car dealerships to lure people, like flies into a spider’s web.

Once you call or go down to the dealership, chances are a salesperson will tell you the advertised car has been sold. The catch: now they’ve got your attention. That car may no longer be available, but they’ve got half a dozen others they’d like to show you. It’s the classic bait-and-switch; now you’re in the web and they’re going to try to sell you a more expensive car.

Let the psychological warfare begin. The salesperson has one objective: convince you to buy a car today. If he senses any hesitancy, he likely will low-ball you - throwing out a price that sounds like a fantastic deal.

It goes something like this: “If I sell you the car for ‘X,’ will you buy it today?” But this is merely part of the battle; his job, once you are in the web, is to keep you there by any means necessary, no matter how long it takes. The low-ball price is not a realistic one - a realistic price would contain a significant amount of profit and could be beaten easily by another dealer. It wouldn’t be competitive.

The salesperson’s approach here is to give you a price no other dealer will touch, an unrealistic price, while you are envisioning yourself behind the wheel. This is standard operating procedure at dealerships, a ploy designed to manipulate you into a transaction that’s not in your best interest. Only later will you hear the heartfelt apologies for the “confusion” that led to a price thousands of dollars more than the you expected to pay.

Buying a new car is a heady and potentially treacherous process. Once you are ready to take the plunge, you enter the land of loss leaders, low-balling and other tricky devices dealers use to make sure you don’t get away.

The presumption here may seem to be that the average person is an unwitting consumer. But the opposite is true: today’s consumers have access to a wealth of information consumers of yesteryear were not privy to.

Nonetheless, car dealers are not in the business of giving the best deals - they are in the business of maximizing profits on each sale. The salespeople smiling in your face don’t earn points with their managers by making friends with you; they earns points by sticking it to you and every other consumer who walks through the door, thereby making as much money as possible for the dealer.

Protect yourself and your pocketbook by exploring all options, including working with a broker who can eliminate the games, expedite your purchase or lease and save you time and money in the process.

Ideally, the only visit you should have to make to a dealer is to see the colors and options available and for a test drive.

A tip for that trip: tell them you’re going out of town tomorrow for a week, that you’re considering their car and one other vehicle and you want to make a decision while you’re away. Ask them to kindly show you the car and say you’ll be back if you decide this is the one you want.

Play the game to your own advantage.

Hammer and Kelly are with Hammer Auto, a new car auto broker in Palo Alto. For more information, call 813-6100 or visit www.hammerauto.com.