Why do car dealerships exist?

The link has been here before, but it can't be here enough (waiting for some wiseacre to repeatedly post it now ... ).

Informative, insightful and scary. Very well done series.

 

Ha! I absolutely refuse to let them talk payments.

I only want to discuss the price of the car I am considering.

 

Ding, ding, ding. One financial item at a time. Talk the actual price of the vehicle, THEN discuss payment possibilities.

 

I hate quoting myself, but her car comes in tomorrow. She hasnt signed anything yet, but is there anything -- good or bad -- she should look for?

 

You should pay for the car, sales tax and licensing.

They will also try to bone you/her for a "doc fee" - basically an outrageously inflated charge to do the paperwork. They will also try to sell you/her an expensive extended warranty and perhaps some other do-dads you don't need.

If you are financing the car through the dealer, make sure the interest rate is clearly disclosed and understandable to you. It should be around 7 percent. If it's higher, try getting a loan at a bank, credit union or even your auto insurance company.

 

Actually, she has every intention of getting the extended warranty.
Her dad bought it when he got his truck and for the $50 deductable no matter what happens, has proven worth while...
They told her an interest rate of "7-something" but she didnt remember what the something was..."

 

We bought a new car recently from a dealer.

We put about 60% of the car's worth as a down payment and got an interest rate through the dealership of 5.9% for the remainder.

We were charged a $75 doc fee. That was down from the $100 they were gonna charge us. I feel like we got a good deal on it, but I still (and always will when dealing with car purchases) feel like we could have done better.

 

Why do car dealerships exist? So they can air brilliant ads like this ...

 

I (heart) Carmax.

 

why

 

I suspect it's for the same reason many hate dealers.

"This is the price of our car. It will not change."

"This is what we will give you for your car. It will not change."

The two numbers have no relation to one another.

No haggling. No pressure. If you don't like our prices, good bye and good luck.

There's a lot to like about CarMax. If my tennis buddy wasn't a Lexus salesman, I would probably buy my next car at CarMax.

 

Not worried about the price of the car, was wondering about their penchant (or lack of it) for tacking on the hidden fees and costs in the loan...