Car buying service tips & advice
Car Buying Services invest less in the car lot and more in technologies that allow them to scan online classified ads (AutoTrader.com, Cars.com, etc.), wholesaler inventories, dealer inventories, and dealer-only auto auctions. As with any other auto dealer, there benefits and limitations of working with a Car Buying Service. Key Car Buying Service Benefits include:
- Selection. Walk onto a dealer’s lot and he’s going to sell you what he’s got in inventory. Whether he took it as a trade, bought it from a wholesaler or bought it at auction, he’s got an investment in those vehicles. While the average used car dealer may have 30 and 40 cars on the lot and the average franchise may have 5 times that, finding the make, model, body style, engine, color, miles and options you want may require sifting through thousands of cars. An auto buying service does just that. (More on used car dealers.)
- Price. The car buying service doesn't invest in vehicle inventory avoiding “carrying” and transportation costs. The car buying service may also save on the car lot. While many states require retail dealers maintain an office and minimal lot, their virtual display model saves investment in land, bricks and mortar. The net effect for consumers: you should be able to save money over “bricks and mortar” auto dealers. Further, like SmartCarCredit, most car buying services have relationships with multiple lenders. Ready to get started? Get auto quotes now!
Limitations
The primary car buying service drawback is that you don’t get to drive the car before committing to making a purchase often in the form of making a deposit. It’s a bit like buying outside of your city on eBay or AutoTrader. While car buying services vary on their deposit requirements and under what circumstances they are refundable, any reputable service will allow you to return the car if it is not in good working order. Further, the laws of your state may provide you additional options. For example, in California consumers can purchase an option to return the car “no questions asked” for a minimum of two days.
Tips
If you like the idea of finding the exact car you want at a great price, get the most out of a car buying service by following these simple tips:
- Give yourself time. Finding the right car will take time. If you want a domestic car such as a Chevy or Ford, most car buying services should be able to find you one within a week. If you tend toward the exotics, a couple of weeks is not uncommon.
- Compare prices. Know the prevailing price for cars you are interested in. While Kelly Blue Book (kbb.com) or NADA Guides (nadaguides.com) can help, it's best to find prices in your local market. Check out cars on AutoTrader.com and Car.com.
- Get a Carfax history report. A reputable auto buying service will automatically provide you the history report. If yours doesn’t, get the vehicle identification number (VIN) and get your own report at Carfax.com. This will tell you if title problem, stolen, taxi, major accident, number of owners, etc.
- Protect your downside. If you are at all concerned about repairs (perhaps you are buying a vehicle greater than four years old), get an extended warranty. While prices vary considerably, you should be able to get a quality drive train warranty from an A-ranked insurer for about $1,500. Also, know your auto loan options before calling the car buying service. SmartCarCredit can help with free car loan quotes.
- Consider a certified used car. States vary in their definition of a “certified” used or pre-owned car. So, it’s best to know your state regulations. In California “certified” used cars must include an inspection report, an assurance from the dealer that the vehicle: does not have frame damage or any other damage from impact, fire or flood that impairs its safety, does not have a branded title, was not a lemon buy-back. Further, the dealer can not sell the car “As Is” or with a warranty disclaimer.
- Be wary of new car buying services. Services such as CarsDirect.com, AutoByTel.com and AutoLand.com, commonly have Auto Broker licenses allowing them to make referral commissions of up to $1,000 from referring you to a new car dealer. Unless they’ve performed a service of value for you such as finding you a rare car, arranging financing, etc. it’s difficult to see how you benefit from the referral. As their commission will invariably be “baked in” to the cost of the car you purchase, save yourself the money by referring yourself to the new car dealer.
Related Links
|