Secrets About Car Dealerships


Things You Should Know About Car Dealerships

Do car dealerships have secrets? Of course, they do! Most industries have what’s known as “industry secrets” and the automotive industry is no exception. These secrets have nothing to do with gossip around the dealership, but more to do with how they operate their business and maximize sales. Knowing and understanding these secrets will help you better navigate the car buying process because you’ll have a better idea of what’s happening behind closed doors. If you want to get a better deal on your next car purchase, read these five secrets!

1. They REALLY Want To Sell You a Car

The first secret you need to know is that car dealerships are trying hard to sell you a car. Most car salespeople have monthly sales quotas and can be awarded bonuses if they’re able to sell a certain amount of cars in a month. Dealerships put a ton of time and effort into building an infrastructure that allows almost everyone to get a car loan, regardless of their credit score. This means that when you go shopping at a dealership, don’t be so fast to accept a deal or financing option. Chances are, you’ll be able to negotiate more than you would think if you’re willing to be patient and leave the dealership and return another day. 

car salesman standing in car dealership

2. Not All Salespeople Are Car Experts

This secret may come as a surprise to a lot of people, but it’s true. Not all car salespeople are car experts, or even well educated on the vehicles they sell. A lot of them know just enough about the vehicles to make a sale to an uninformed customer, which is most customers. You may be asking yourself if all salespeople need to do sales training on the vehicles they sell, they do, but it doesn’t mean they’re not being helped by a co-worker who knows better. Because of the lack of knowledge of many car salespeople, the customer ends up losing because they take advice on a car that isn’t necessarily true. The worst part is that most customers have no idea, so if you can, do your own research and really learn about the vehicle. If you find that your research has you more knowledgeable than the car salesperson you’re working with, it’s probably best to walk away. 

3. Car Dealership’s Make a Fortune on Trade-Ins

Car dealerships know that when you’re looking to upgrade your car and get rid of your old car, you typically want to sell it quickly and don’t have a ton of options. Because of this, they’ll buy it off you for as little as possible and then sell it and make a nice profit. It’s a smart move to check out Canadian Black Book before bringing your trade-in to the dealership so you can get a better idea of its worth. Bring in your Canadian Black Book appraisal of your vehicle into the dealership to use as leverage and if they aren’t willing to buy it off you at the appraised price, consider selling privately. 

customer at car dealership taking pictures

4. Don’t Buy Based on the Monthly Payments!

One of the first questions a car salesperson will ask you upon entering a dealership is what you can afford to spend monthly on your car. While this may seem like an honest question, it’s actually a sneaky trick. Once you’ve committed to a monthly payment amount, the salesperson will find a more expensive car and play with the financing terms to make it fall within your monthly budget. All they need to do to make this happen is adjust the length of the loan term, down payment amount and interest rate. Because of this, it’s best to plan what you can afford based on the sticker price and then use a car loan calculator to see what the monthly payments will be. 

5. Dishonest Dealerships Will Try and Sell Every Additional Add-On

While this doesn’t apply to all dealerships, it certainly applies to a good chunk of them. Some dealerships will add extended warranties to your car purchase without mentioning or just glazing over the extra costs of the warranty. This isn’t to say extended warranties should be avoided, but this decision should be left up to you without any pressure from the salesperson. It should also be noted that you have 30 days after buying the car to decide whether or not you want to buy the extended warranty. Some unethical dealerships will also change the interest rate or lengthening the loan terms before having you sign the contract so it’s important to be vigilant and double-check any contracts before signing!

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Car Loans Canada works with dealerships across Canada to help Canadians get the vehicle of their dreams for a price they can afford. All of our dealerships are ethical and certified by our team of experts. Fill out our short application today and get approved for a car loan and connected with one of our many dealership partners!

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