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A former car dealer has revealed the tips and tricks you need to keep in mind when buying your next car.
Jase Patrick, who was a car salesman for fifteen years, has shed light on the often deceptive tactics salespeople use to get customers to end up with a higher bill.
Between 80 and 85 percent of new vehicles purchased by Americans in the past three years are financed, and up to 40 percent of used vehicles are financed, according to a recent study. Experian Report.
That’s why it’s important for the former car salesman to help educate people about the methods used to increase monthly payments before signing the papers.
“The online price is just to get people into the dealership; it has no correlation to what they pay,” Patrick warned.
Former car dealer Jase Patrick is helping to shed light on the auto finance industry
Around 85 percent of new vehicles purchased in the last three years are financed
Being in a hurry when signing documents
One trick Patrick warns car buyers to watch out for is if they feel pressured into signing paperwork by a salesperson.
Patrick He told the American Prospect About a first-time buyer, Mario from Corona, California, who was in a hurry and was told by a salesperson that he couldn’t see his completed auto loan contract.
“This is the ideal client,” Jase told the publication, “this is what (salespeople) train for.”
By rushing Mario into an unfair financial settlement, the 20-year-old nearly signed a deal that would have cost him more than $20,000 more than necessary over the life of the loan, according to Patrick.
Interest rate linked to the guarantee
Patrick, now a chief financial officer, advises potential car buyers to be wary of dealers who claim that buying a lower interest rate is tied to purchasing a vehicle warranty product.
In fact, it is illegal to tie a lower interest rate to a guarantee, Patrick told American Prospect.
However, many dealers will continue to claim this is the case in order to “sweeten” the original product being sold, he explained.
Salespeople are looking for the “perfect customer” they can milk for profit, Patrick warns
Junk Add-Ons
According to Patrick, it’s important not to get carried away by car dealership finance and insurance (F&I) representatives who add more unnecessary products to monthly payments.
In Mario’s case in California, Patrick said these sellers had added $7,100 worth of extras, including a warranty, a “door guard,” nitrogen-filled tires, two anti-theft systems and a guaranteed asset protection (GAP) policy.
The door protector could be purchased for $10 on Amazon, but Mario would be charged $695, Patrick said.
Furthermore, “nitrogen-filled tires” often contain no more nitrogen than is found in ordinary air. According to the FTC.
Several dealers advertise the same car
A quick and easy way to weed out dealers who might be looking to milk your customers is to see if the car they are advertising is also being promoted by other dealers.
Patrick described these ads as fishing expeditions in search of a customer to whom something else can be sold, thereby increasing the dealer’s profits with the sale.
This is because these are customers who want a car but cannot afford to pay for it in full, so they may find themselves in unfavourable financing conditions.
