Buying a Vehicle The Potholes and Curves

Updated: Aug 5

Buying A Vehicle – What to expect - the purchasing process


There are many ways to buy a vehicle, some ways will cost you a lot of money, others won't. I have bought numerous vehicles over the years, both new, used, older and not so old, I've financed, leased, and also paid cash. I've even invested in a used car dealership and became licensed, so I know all the ins and outs. Here I will explain all of them to you, and then you can decide what's best for your situation.


First thing Know your credit situation if you are planning on financing, as the better your credit is, the better it is for you, as in a better interest rate and terms. Figure out the style of vehicle that you would like and features, then figure out your budget, and stick to it, most dealerships will always try to max out your budget. When you are at the stage of talking budget with the dealership, always tell them a lesser amount, do not disclose your maximum budget, because if you do, I can almost guarantee you will be exceeding it, and this can cause financial hardships down the road. Typically a dealer will also ask, what are you looking to spend per month concerning a payment plan. Them asking this question is a tactic of them figuring out what type of purchaser you are (finance or cash). Never answer this question directly. The reason being is they can do the financing in such a way to fit almost any payment amount simply by extending the time of the loan and working the numbers. The correct answer to this is simply as cheap as possible, or the lower the amount, the better. Just give them the answer to this question as basically the maximum I want to spend as in the total price of the vehicle, and leave it at that. Chances are they will show you some vehicles in that price range, as well as several slightly over. Because they will be showing you the vehicles that are over your already stated budget. Giving them a lesser amount that you are shopping in will give you a window where a vehicle that you might like, you can stiff afford.


So you found the vehicle that you want. You have taken the vehicle for a test drive, this includes driving it around town for a bit, hwy driving, and also go over some rough roads or gravel roads, see how it handles. Sometimes the sales rep will go with you as well, that's ok, as its a good time to question them about the vehicles as in options, how long it has been on the lot... Now its time to sit at the desk and go over all the details, and finalize the purchase. Several options are available to you when purchasing. You can pay cash, this is buying the vehicle outright and you own it, paying cash means just that, paying in cash. It can also mean paying with a money order, certified cheque, or with your debit or credit card. Financing the purchase means you are borrowing funds for the purchase in some manner, this could be through the dealership, as basically all dealerships offer that option, or you have arranged for financing some other way. The third option is to lease. Leasing is when you rent the vehicle. I will go into all of these options in detail and the pros and cons of each, as well as understanding the pricing of the vehicle later in another blog, as this blog is more about the purchasing procedure.


So you're sitting at the sales reps desk, and they are going over all the options with you as well as the conditions of purchase. Here is where you can negotiate, and make sure you do, especially for a used vehicle, more so than a newer one. A used vehicle is where a dealership has the potential to make more profit than on a newer one, as chances are the used vehicle was either purchased directly from a dealer auction, or from a wholesaler who is typically in most cases only licensed to sell to the dealerships, and not to the public (though some are licensed for both), or the vehicle was brought in as a trade-in. Whereas a new vehicle is purchased directly from the manufacturer at a set price, and they also have a lot of competition from other new dealerships, so, therefore, there is very little negotiation room in the purchase price of a brand new vehicle, if any at all.


Some of the terms of the condition of sale that I put in, is I would like the option of taking the vehicle to my mechanic and have the vehicle assessed by them first for overall condition. Any items your mechanic finds, get them addressed by the dealer before taking ownership. The sales rep will also try to get you to purchase an extended warranty, as well as possibly a rustproofing package as well. Word of advice, Never purchase these items know as an upsell directly from the dealer, as you are paying way to much for these items. If you want peace of mind with an extended warranty and a rustproofing package, price them up outside of the dealership, as both of these items have a huge markup, or even negotiate, you are willing to pay a certain amount if they include these in the purchase as well or at a big discount in there price for these upsell options. Most dealerships will include some sort of warranty in the purchase, and typically if you find, or experience a problem with your vehicle, its usually within that time frame, shortly after purchasing. If they don't offer any type of warranty, then negotiate for one.


Once you have hashed out all the terms of the purchase with the sales rep, typically they will then say, well I need to go over all the details with my manager and get them to sign off on the deal. They will leave to go talk to them. The sales rep already knows the minimums that are acceptable for the sale. This is just a tactic to try to improve on their profits, as the sales rep will typically come back and say, well we can't do this, this or this, but can do this. Don t feel the pressure to sign unless what they offer is acceptable to you, remember this is negotiations, the dealership knows all the tricks of the trade and tactics. You can go back and forth several times, but remember, this is your money, and you have other options and even tell them that, they will agree if they want to sell the vehicle. But make sure you do your homework first, as in have the vehicle assessed by your mechanic, even ask your mechanic how much they think the vehicle is worth, also look up other identical vehicles and compare the prices and condition. That way when you are negotiating, you are educated and fully prepared. But also remember, the dealership is in business to make money as well, so make sure you are being realistic in your negotiation requests and tactics.


Once the negotiations are over everything is all said and done, and you have signed on the dotted line, typically the dealership will ask for a deposit, make sure that this deposit is refundable. After that they will give you a delivery date, typically within 5 business days, as they will have to detail the vehicle, safety it, and transfer the ownership, so that the only things for you to do, is pick the vehicle up, and drive away.


Price is what you pay. Value is what you get


Shane Lifeman





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