With the gap between new and used car prices starting to narrow beleaguered sales people are seeing an angle they can work with customer’s intent on buying used. If they concentrate on the monthly payment rather than the full retail price of the car, this well used trick can lead the unwary customer into making the wrong choice when deciding which car to buy. When qualifying a customer, sales people will usually ask how the purchase is being funded and if there’s a monthly payment on their existing car. This is a way of establishing what the current payment is and steering the customer away from the price of the car or value of the part exchange and concentrating on the smallest and easiest part of the transaction. Most people would think that because a car is used that the monthly payment will be cheaper than on a new version, but with certain lease purchase schemes this is not always the case. The residual values are often higher on a new car to the extent where the actual monthly payment can sometimes be only a few Pounds more than a used car with the added benefit that you get to choose the exact car and colour you want with no mileage and no previous owner. But back to the original scenario; there are many examples where sales people will focus all their efforts into negotiating with a customer purely on the monthly payment. A customer might be quoted a monthly payment with a very high interest rate with the salesperson knowing they can always quote at the top and negotiate to the bottom creating the illusion that that customers are getting a great deal when actually if they are not careful they may not get a penny off the list price of a new car.
Now obviously in today’s climate this is not necessarily a regular occurrence by any stretch, but there much has been written and said about the state of car sales in the industry and if dealers find it confusing then customers will surely be completely baffled by the mixed messages coming out.
We have all been saying for some time now that no one is selling any new cars and that used cars are the thing to buy, but slowly and surely used car prices have been creeping up, the gap is closing and many clever sales people will use this as a smokescreen. Enticing new customers through the doors by stating that new cars are priced to the bone, (even though we know some car makers have actually raised prices) the customer, who takes all this at face value, may be confused and instead of asking questions could blindly accept the word of the sales person. It is called taking advantage of the confusion and buyers must always seek answers to the following questions;
How is the on the road (OTR) price?
What discount am I getting?
What is the APR?
I know the market for used cars is good is this reflected in the price I have been offered for my trade-in?
Without answers to these important questions there will always be the possibility of paying over the odds for a car and prospective buyers need to keep their wits about them.