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The car dealer has controlled the process of buying a car for many years as a way to get you to spend more money. These secrets will provide you with the information that cause many to overspend on their car. When you know these car buying secrets you will being scammed.

The best car dealer secret for making money is getting the car buyer emotionally involved in the new car. The buyer of a new car gets excited when they are buying a car. The car buyer that uses emotion to buy a car can spend more money than is needed by missing some of the details. The car buyer that uses logic and treats buying a car as a business transaction will be money ahead. Keep something in mind, the car buyer that uses emotions to buya car will spend more than they need to spend.

Another car dealer secret is that the car dealer very often increases your financing interest rate. When you finance a car or car dealer financing scams the car dealer the lender will approve your loan with one interest rate, but charge you a higher interest rate. The two rates might cover a span of several percentage points. The amount of the difference of those two rates might bring the car dealer many hundreds or thousands of dollars. The best way to avoid this car dealer trick is to get a car loan quote from your bank. Then compare the rates of both sources and choose the best.

The price adjustments, sales programs and other discounts that deteremine the price on a new car is a closely held secret. There is a number of different places where you can get the invoice price on a car. You might think that the dealer pays invoice price for the car but they actually pay less. One way that the dealer pays less for a car is called dealer hold-back. An amount that can range from one to four percent of the car can reduce the dealer cost from dealer holdback. This is often called secret money because the auto dealer gets money from the manufacturer to sell you a car. This amount usually is around 3 percent, so on a $20,000 car that is about $600.

Wait there is more; there are times throughout the year that the car dealer can participate in manufacturer’s contests. The manufacturer hosts these sale programs based on the amount of sold cars during certain period and provide extra discounts. This dollar figure might be from $500 up to a thousand or more depending on the number sold. These selling contest are kept secret until they start and may be done several times a year for a specific period of time.

These car dealer secrets can make a big difference in the price of you car even though there are many more. Many buyers have car buying questions about these car dealer secrets and you will find a wealth of information on the Internet. You can find most of you car questions answered on the Internet plus you will save some money. The car salesman may be polite and nice, but remember that they are trained to sell cars by whatever means possible. The average car salesman does this everyday and they are trained to make profitable car sales.

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Getting the best price on your next car just got easier. Just read over the following car buying secrets and put them to good use.

1. The Dealers Real Cost

The Manufacturer’s Suggested Retail Price (MSRP) is the price that consumers supposedly are meant to pay. Of course, most know they can do better than that, so they look for the Dealer Invoice Price (usually listed on the sales sheet on the vehicle). They try to get a price close to that.

What many people don’t know is that this does not necessarily define the lowest you can go, because it is not the actual dealer cost. In fact, this is number is essentially a lie that manufacturers and dealers create to help THEM with negotiations. For a variety of reasons, the dealers real cost is almost always substantially less than this, so keep that in mind.

2. Dealer Incentives and Holdbacks

Among the things that lower the dealers true costs are special incentives they are offered by the manufacturer, as well as holdbacks. A holdback is an amount paid to the dealer by the manufacturer upon the sale of a car. Doing it this way (rather than simply selling the cars to the dealer for less, is a way to artificially inflate the cost on paper, which helps with negotiations with “smart” buyers.

There are places where you can find out about holdbacks and incentives. Consumers Reports, for example, in addition to having some information about these things in their magazine, also has a service that provides you all of this sort of information about any car you are considering buying. Look for their “New Car Price Service.”

3. Overpriced Extras

Much of the profit on a new car is made from the extras that consumers buy. Some certainly can be worth the price, but others are almost worthless or at least grossly overpriced. Though there are exceptions, as a rule avoid undercoating, rustproofing, fabric protection, windshield etching and extended warranties.

4. Don’t Mention Your Trade In

Negotiate everything else before you mention that you have a car to trade in. Otherwise, the dealer may hold out for a higher price on the new car just so he can appear to be offering you a decent price on your trade in. Prior to going to the dealer, look up the value of your existing car in one of the used car price guides (available in your public library or online), so you know what you might get selling it on your own. Take the dealer offer if it is anywhere near this.

5. Buy At The Right Time

When is the right time to buy if you want the best price? Certainly you can watch for sales, special manufacturer rebates and such. These can save you hundreds of dollars or more. But one of the lesser known car buying secrets is to shop near the end of the month.
 
Why? Because many car dealers pay bonuses to employees based on total sales for the month. Towards the end of the month then, the sales people are often trying to meet some goal that might win them a bigger bonus. This gives you more negotiating power. Mention at some point “I might wait until (pick a day that is the first or second of next month) to make a decision.” You might just see the price come down at that point.

6. Buy Used

What is perhaps the most valuable of these car buying secrets, is also a secret of millionaires. Although millionaires may buy more Mercedes or BMWs than Honda Civics, about 40% of them buy these cars used. Why? Because they recognize value. Surveys of repair costs and other data show that a three to four-year-old car costs up to 50% less per mile to own as a new car (less if you are paying cash, because part of the savings is in the interest savings on a lower-priced smaller-loan car). A three year old car should look almost new in any case.

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