Car Dealers HATE When YOU Ask These 3 Questions

Presenting Ourselves as Strong and Competent Customers

In this section, the speaker discusses the importance of presenting ourselves as strong, competent, and capable customers when dealing with car dealerships. They emphasize asking three key questions to avoid overpaying.

Three Questions to Ask at the Dealership

• The first question to ask is about the out-the-door price, which includes all fees and taxes. It is important to get a breakdown of the selling price, sales tax, title registration, and any dealer fees.

• The second question is about dealer-installed accessories. It is essential to inquire why you have to pay for accessories that you didn't want or ask for. Additionally, questioning inflated retail prices for these accessories can help negotiate better deals.

• The third question pertains to add-ons and accessories listed on the worksheet. It is crucial to ask why certain items like gap insurance or warranties are included if they are not necessary or desired.

Understanding Out-the-Door Price Worksheet

This section focuses on understanding the out-the-door price worksheet provided by car dealerships. The speaker explains that while taxes are required, many other line items may not be necessary.

Clarifying Required vs Non-required Items

• The out-the-door price will list required items such as taxes and the selling price of the vehicle. However, many other items may not be mandatory.

• If an item is taxable on the out-the-door price worksheet, it means it is not required. It is advisable to ask the dealer to explain each item explicitly.

Dealer-Installed Accessories and Overpriced Add-ons

This section discusses the issue of dealer-installed accessories and overpriced add-ons that can increase the cost of a vehicle. The speaker provides insights on how to address these concerns.

Questioning Dealer-Installed Accessories

• Asking why you have to pay for accessories you didn't want or ask for can help negotiate better deals.

• Some accessories and add-ons are added by distributors, not the original equipment manufacturer (OEM). These items may be non-negotiable if they are listed on the Monroe label or window sticker as part of the car's package.

Negotiating Below MSRP with Distributor Add-ons

This section focuses on negotiating below the Manufacturer Suggested Retail Price (MSRP) when distributor add-ons are included in the pricing.

Negotiating with Distributor Add-ons

• Some distributors add their own accessories and add-ons at ports, which increases the MSRP. While negotiating below MSRP is still possible, these distributor-added items may be difficult to remove from the pricing.

• It is important to understand that while MSRP is suggested by the manufacturer and not negotiable, selling price can still be negotiated below MSRP.

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What is the Buy Rate on a Loan?

In this section, the speaker explains the concept of the Buy rate on a loan and why it is important to ask about it when financing a car purchase.

Understanding Financing Options

• When financing a car purchase, most people are more interested in financing than paying cash.

• It is important to ask about the Buy rate on the loan, especially if the dealership is arranging the financing for you.

• If the dealership arranges financing (known as indirect lending), they send your credit application to a bank and receive an approval with a specific interest rate.

• The amount that the bank charges the dealership for the money is called the Buy rate.

Importance of Knowing the Buy Rate

• Dealerships have the option to charge customers a higher interest rate than what they receive from the bank.

• By asking about the Buy rate, you can determine how much markup there is on your loan.

• Knowing both the Buy rate and sell rate (the interest rate offered to you) allows you to negotiate better terms for your loan.

Demonstrating Competence as a Customer

• Asking about the Buy rate shows that you are knowledgeable and informed as a customer.

• Salespeople and finance managers appreciate customers who understand these concepts.

• By asking questions about financing options, add-ons, accessories, and out-the-door price, you demonstrate competence and confidence in negotiating your car deal.

Efficient Car Deals: Ask Three Questions

This section emphasizes that asking three key questions can lead to efficient car deals. It encourages customers to seek dealerships that provide transparent information.

The Power of Three Questions

• Asking three essential questions can streamline and simplify your car buying process.

1. What is the Buy rate on this loan?

2. How much are you marking up the Buy rate?

3. What is the out-the-door price?

• These questions help you gather important information and negotiate effectively.

Benefits of Asking Three Questions

• By asking these questions, you demonstrate your capability, competence, and confidence as a customer.

• Dealerships appreciate customers who have realistic expectations and understand the car buying process.

• If a dealer refuses to provide this information, it is advisable to find another dealer who will be transparent with you.

• Obtaining all necessary information upfront can lead to a quick and efficient car deal for both parties involved.

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