5 Tips on Beating Dealership Finance

Wow this year has really flown by and it’s almost time for the End of Financial Year Sales (EOFY)!

If you are in the market for a new car now is the perfect time with all the sales about to begin.

Getting the right finance for a car can save you thousands. Don’t get taken for a ride (excuse the pun) by the dealerships.

Here are 5 Tips that will help you be able to make sure you are getting a good deal on the finance for your car.

  1. Don’t be fooled by the reputable dealership – When you go into a used car dealership we have our guard up because they have been getting a bad rap since cars were invented, but people never seem to suspect the dealership. These guys are just as cunning with their tricks and sales tactics only they create a better smokescreen with shiny cars and flashy offices.
  2. Base rate vs effective rate– Unsuspecting clients get suckered into the dealerships jargon as they will tell them whatever they want here to make the sale. If you go into the dealership and say can you beat this rate from the dealership down the road the answer is “of course I can!” The truth is that he will beat the rate but he will claw the money back out of your pockets through other bills or add-ons? Base rate is whatever you need to hear to make a sale whereas effective rate is what the whole thing will cost you at the end of the contract. I find it best to just talk in dollars and cents it is so much easier you to understand and compare finance products.
  3. Read the contract – After the excitement of buying a brand new car it is very hard to make rational decisions and be thinking clearly. Some dealerships will play on this and have been known to adjust parts of the contract such as extra fees, longer loan term etc. This is where you need to be really careful of the contract. If you don’t want to read it with a microscope then all contracts have a cooling off period so once you calm down it is best to take another look over the contract to ensure all is above board. If you think you are getting a bad deal check with your broker who has the experience to tell you if you have been ripped off or not.
  4. 0% or low interest rates – there is nothing for free and last time I checked car dealerships were in the business of making money. If you see these ‘bait rates’ advertised at different dealerships, you will find they have to meet ridiculous terms which no one would meet or they make it back on the fees and balloon payments at the end of the contract. A good example recently was a European car dealership was offering 2.99% interest! WOW! Except the terms were for 5 years with a 25% deposit but only for cars purchase under $30,000. (How many brand new European sport cars can you buy for under $30,000? Probably not any.)
  5. Get More than one quote – Despite what the dealership might say if you buy a car from the dealership you don’t have get the finance from them. It is such a great idea to always get three quotes for major items you are buying and a car is no different. It is best to compare their quotes to perhaps another dealership and get a third from your broker. We can give you a quote instantly that you compare with dealerships the only difference is they have their 1 finance product and we are able to compare 12 different lenders to find you the best deal.
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