Tuesday, December 22, 2020

Secret Tricks 'N Tips of the Car Dealer!

You can't "win" at a car dealer.  The best you can do is hope for a tie - or an armed truce.

A while back, a reader asked me about guides to dealing with car dealers. Were there really secret "tips 'n tricks" like the "sponsored content" online claims there are?  Not really - the odds of you "pulling one over" on a car dealer are nil - less than Trump's chance of success in overturning the election (other than by force).  Yea, I guess if you declared martial law and went into the dealership in a tank, you could force them to sell you the car at gunpoint at a "steal" of a price.  But that would be, in fact, stealing.  Failing that, the best you can expect is a reasonable price.

Even if you are a car-nut like me (or was), who has owned over 40 cars, boats, motorcycles, and other motorized vehicles, your skill in buying and selling vehicles pales in comparison to a car dealer, who sells more cars in a month that you would in a lifetime.  They know the score and have all the "secret tips 'n tricks" of their own - well-honed over the decades.  If you watch old sales training videos from the 1940's and 1950's, you'll see all the same old gags even back then - the inflated trade, the hostage trade-in, the "we have someone looking for a car like yours!" and so on and so forth.

A salesman with any amount of experience knows more about human psychology than a tenured professor with a PhD.   These guys know what makes you tick - your need for status, your insecurities, your FOMO - all of it. They can play you like a cheap violin.   That's the bad news.

The good news is, only if you let them. And today, we have weapons in our arsenal that can neutralize some of their bigger tricks, but only so far.   Again, the best you can negotiate is a "fair" price on a new or used car - a price that is still 5-10% higher than what the car would be worth, if you had to sell it the next day.

I mentioned before that buying a car from an individual is probably the best bet - but there are caveats.  So-called "curbstoners" pose as individuals selling their own cars, but are often people who buy and sell cars as a "side hustle".  If someone offers to sell you a car and it is not titled in their name, chances are they bought it from someone recently for cheap(er), and then got them to sign over the title, and are now re-selling it to you at a small profit.  If they re-title the car, they have to pay sales tax, so the car is still titled in the previous owner's name.  This doesn't mean it is a bad deal - necessarily - that depends on the price and condition of the car.  But some of these "curbstoners" can be very aggressive in cramming down price if you are selling, and padding price, if you are buying.

Then there are the dreamers and deceptive people.  When shopping for a used Corolla/Prism with my friend (many, many years ago) the most expensive car we looked at was filthy dirty with coffee stains on the seat, and a non-working ABS controller.  "You can fix that!" he helpfully offered.  When I was looking at pickup trucks, I saw one for sale in The Villages and had friends there check it out.  It looked like an "OK" deal, but he wanted over book value for it because of how much he owed on it.  When I asked him for the VIN number, he sent me a cell phone picture of the VIN plate on his wife's Ford Focus.   I pointed this out to him and he sent me the correct number. I did a CarFax on it and - surprise! - it had been in a major front-end wreck (hood, fenders, bumper, etc.).  Not necessarily a deal-killer, but the fact he lied to me was a big tipoff.  I took a pass.   For a little more, we ended up with the truck we have, with far fewer miles on it and no accident report (other than the various things I have hit with it since we bought it).

The problem for private-party sale these days is so many people are "upside-down" on their vehicles, so private party sale is getting harder and harder to come by.  The other problem is that vehicles are so expensive these days, few citizens are equipped to deal with transactions in the tens of thousands of dollars.  So private party sales are fewer and fewer, other then for less expensive vehicles (late model economy cars, for example) or end-of-life clapped-out junk you don't want anyway.  Sadly, this means more and more that a dealer may be one of the few options some folks have, and sad to say, the last three cars I bought were from a dealer - a big change for me, who bought his previous ten cars from private parties.

So, how do you survive doing business with a dealership?  After all, they have all these scams and cons and whatnot, right?  Well, first be aware of these scams and cons.  Second, do the research on the vehicle you want to buy after choosing one make and model vehicle to shop for.  Third, after doing the research, figure out what a reasonable price is to pay and then negotiate over the phone or by internet. Fourth, try to make the transaction as simple as possible - avoid trade-ins and other complications if you can.   You won't walk away with a "steal of a deal" but then again, neither will you get bent-over the table.

So how do these four steps work?

1.  Be aware of these scams and cons:  What car dealers love is someone wandering into the dealership, not sure of what kind of car they want, what make, model, or trim level, with no idea of what is a reasonable price to pay, other that what they can afford in terms of monthly payment.  If this is you, you have "sucker" written all over you and they will try to sell you the least amount of car for that monthly "nut" you are obsessed about.

Their tricks are numerous. The first and foremost is to keep you there for hours in a form of power-shifting.  If you are on-site for hours, then you have basically told them you feel "lucky" to be sold a car, and they have you.  Your blood-sugar will go down, and you will become dehydrated - clouding your thinking.  You may even have a meltdown because of this - they hope you do.  Oftentimes, people end up buying after making fools of themselves.

The simple way to avoid this problem, of course, is to not spend hours in a dealership, but rather negotiate over the phone or internet.  It can be done.  I've done it three times, now.  They will tell you this is impossible, of course - they want you to come in and sit for hours.  Just walk away from dealers and deals like that.

Other tricks include the hostage trade - which a reader told me was impossible as "it would be illegal".  Well no shit - dealers doing illegal things! What's next, lying politicians?  Oh me, oh my!  But I've seen it done before - that and the hostage down-payment check (which happened to me, 40 years ago or so).  "Sorry, the cashier went home for the night, and only she has the combination to the safe!  We'll return your check tomorrow!"   They cashed it.  It is a common tactic, and you'd be surprised how many people "go along" with a crappy deal rather than stand their ground - people can be passive.  And yes, this happened to me after I was at the dealer for three hours.  Duh!  I walked away from that deal and dealer.

When buying the hamster, the salesman wanted to "evaluate our trade" and wanted to have his "mechanic" drive off in the M Roadster.  We told him we weren't interested in trading.  What they wanted to do was hold the car hostage - to keep us there for hours - and get us to sign on a deal we didn't want.  Turns out the Fathom Blue car with sunroof and nappa leather was actually midnight black with no sunroof and a black interior.  "It's pretty close!" the salesman said - and apparently people go along with this.  Having driven for an hour to see it, you get tempted to go along as you have "invested" time in the deal.  We walked away - if he is willing to lie once, he would lie again.  And no, we didn't give him the keys to the M Roadster.  (We later found the exact car we wanted, three hours away, with the exact options and color we wanted, and negotiated the price via e-mail).

Inflated trade is another gag - you owe more money on the car than it is worth, or you have a weird idea that your car is worth more than book value just because you owned it (provenance!).  They cater to this mentality by padding the purchase price of the new car, or the financing price or excess fees, or whatever (or simply not giving you a discount you would be entitled to otherwise).  Again, these tricks only work if you are unaware of them and allow your vanity to get in the way of common sense.

The opposite of the inflated trade is the deflated trade - where they run down your car as having so many chronic problems it is worth nothing.  One particularly odious variation on this gag is to "convert" a repair customer to a new car sale.  A friend of mine had this happen to them, but they were smart enough to see through the gag.  They took an older car in for some routine maintenance and were handed an "estimate" by the service manager.  Their car would need $5000 in service just to make it safe to drive!  The service manager even tried the old, "under the law, I can't even let you drive this away in this condition!" gag.  My friend said, "try to stop me!" and left.  Good for him.

The horrible safety problems?  A cloudy rear-view mirror and some ball joints that were starting to wear.  Stuff you should fix, but for an older car, things you can fix a lot more cheaply at an independent garage.  The punchline was, a salesman showed up in the service managers office, just as the estimate was being presented, with a pitch to trade in their old "worn out" car on an off-lease used car they were trying to unload.  It is a perfect gag, as you are catching the "prospect" with their pants down - getting them to buy a car at a time and place not of their choosing, after doing no research or even knowing what kind of car they want to buy!  Don't fall for that gag.

It is all about power-shifting, and if you give them the power, you give up what little negotiating leverage you have.  It is like a friend of mine, whose car caught fire as he cruised into the car dealership.  Once they extinguished his trade-in, they sold him whatever lemon-on-the-lot they couldn't get rid of that month.   It was either that, or walk home.

The "we have someone looking for a car like yours" gag is mentioned in those old training films from the 1940's and 1950's.  Recently, a friend of mine fell for that gag, and asked me, "Do you really think they had a customer who wanted my particular car, or was it just a lie to get me to trade-in on a new car?"  The fact they asked the question means they knew what the answer was already.  But they wanted a new car, and this was just persuasion to get them into the showroom.  And they went, and they bought.

In that vein, are salesmen unethical or sleazy? Are they criminals?  Well, from their perspective, no. As one of these old training films puts is, people want to buy a new car, but they have reservations about spending the money.  A salesman, using these "tricks" simply pushes the "prospect" over the edge into buying - which is something deep down, the prospect wants to do anyway.  Who doesn't want a new car?  Right?  The salesman is just a facilitator getting you to do what you wanted to do all along.  I suppose a prostitute could argue the same logic.  Come to think of it, it really is the same profession.

While a new car is nice to have (or even a late-model used one) but if it stresses you financially, it is a decision you may later regret. Sadly, there are legions of people today who are "upside down" on a car - because that friendly, helpful salesman showed them "how affordable" it was, with a 7-year (or longer!) car loan.  And the same salesman - or someone like him - will show them how to fold that negative equity into another loan on another car - and start a series of events that will lead to slow-motion financial suicide.

But the shenanigans don't end with the actual sales contract.  In the case of the $500 hostage check, I signed what I thought was a sales contract, but what the dealer called an "offer form".  After an hour wait, they ushered me into the "closing room" where the price, the fees, and the interest rate on the loan were all changed - and of course, not in my favor.  The closing room is a place where they will try to sell you undercoating, paint sealant, and the floor mats that came with the car.  In the case of the hamster, the "closer" at the dealer tried this and I told them to piss-off.  "I can't work with customers like you!" he cried, and handed me off to another closer.  I was paying cash and that's no fun at all!  No extended warranty?  No undercoating?  No Tru-Coat?  You're no fun at all, Mr. Bell!

With the Nissan, they tried to "sell" us accessories that they had bolted on the car - window tinting, pinstriping, and running boards - all things the salesman had said were in the purchase price.  They relented only when I told them the deal was off.  Years ago, we bought a 1995 F150 and the dealer tried the same thing (floor mats, undercoating, extended warranty, etc.).  I had a cashier's check from the credit union for the purchase price and told them I was leaving unless they could finish the deal in the next 20 minutes.  19 minutes later, I drove away.  Did I get a "steal" price? No, a reasonable one.  But I didn't get ripped-off, either.  Being willing to walk away is your ultimate ace card.  Never feel that you have "invested" time in a deal, or they have you.

Knowing these tricks ahead of time will keep you from falling for them.  Spending as little time at the dealership as possible is one sure way to avoid these traps.

2. Do the research on the vehicle you want to buy after choosing one make and model vehicle to shop for.   With the Internet today, there is no excuse for not doing research ahead of time. And research starts with figuring out whether you really need to buy a car at all.   The big savings in car ownership occur if you can keep a car long enough to wring most of its useful life out, without going too far into the end part of the Weibull curve.

Most people do the opposite in two ways.  You have folks who trade-in their cars every three years (or worse, yet, lease) and thus incur the highest cost of car ownership.  There are others who keep a car well past its prime, to the point they are throwing thousands of dollars at it, sometimes every month, for an unreliable piece of transportation.  If a repair cost exceeds the book value, it is time to scrap itSelling your car before this occurs is an even better bet.

Modern cars are designed for a 10-year, 150,000-mile service life.  Sure, some go beyond this, particularly idiots who drive 30,000 miles a year.  But for the most part, cars get pretty ratty and need a lot of major work after a decade or so.  You can try to keep a car longer than that, but odds are, it will need things like CV joints, struts, transmission work, or major engine repair - sometimes even the cost of a set of tires exceeds or comes close to the book value at this point.

There is another advantage to running a car longer.  When it gets to that age, it isn't worth much, and you can afford to sell it in private party sale, donate it to charity, or give it to a needy friend or relative.  It is a lot easier to dispose of a $3000 car than a $30,000 car.

Assuming you are making a rational choice to replace your vehicle, the next step is to research what vehicle to buy - one that meets your needs, not just your wants.  Sure, a sports car is kind of sexy, but kind of impractical for hauling around four kids (not that it stopped my Mother from doing this).  Sports cars and esoteric cars can be harder to sell and take care of.  My Mother had no business buying a Fiat!

Similarly, a big, butch 4x4 pickup truck sounds all manly, but is an idiotic thing to commute to work in.  The day after we decide to sell our travel trailer is the day we sell the pickup truck - it is just not a every enjoyable vehicle to drive, as a passenger car - which may be why it was traded-in with 20K on the clock.  But even within such segments, you can find niches where demand isn't so high.  Both the F150 and the Nissan were two-wheel-drive vehicles, and thus the dealers were willing to bargain more, as young men who are insecure about their manhood "have to have" a brawny 4x4 and will pay any price whatsoever.  But more about that, later.

Look for a good quality car that maybe others have overlooked.  Everyone wants an SUV or pickup truck today (but won't, once gas goes to $5 a gallon, which it does, periodically).  No one wants sedans, so dealers offer better bargains on them.  A minivan may be more useful than an SUV, but since all the mommies at soccer practice want an SUV, dealers are offering better deals on the minivans.  Even among trucks, a 4x2 is harder to sell than a 4x4, a Nissan harder than a Toyota.  Which are being offered with incentives and which are being sold over over-sticker?  This is not to say you should look for a lemon - really cheap cars are really cheap for a reason: they suck.

Similarly, exotics are often a bad deal - overpriced and expensive to own and they don't last nearly as long as a more plebeian make.  BMWs, Jaguars, Land Rovers - even Mercedes - you never see many of these on the road once they are about ten years old as even the most simple repair exceeds the book value - an often the book value plummets down to nearly nothing.  Meanwhile, more mass-production cars are still on the road as they are more reliable (as more hare made) and parts are cheap and they are easy to work on.

Once you pick the make and model, figure out the pricing.  KBB.com, NADAguides.com and Edmunds.com all have pricing guides for new and used vehicles - with each option priced as well.  Once you have picked one make, one model, and even trim level, it isn't hard to figure out a "fair price" to pay for a vehicle, new or used.   And picking one make, one model is important.  You cannot compare a Ford versus a Chevy on price - they are different vehicles and have different price points. Decide on one or the other, shop that model, and you'll start to understand what a "reasonable price" to pay is.

We decided early on to look at the F150.  And we looked at about 30 of them, in person and online.   We found that some folks - dealers or private sellers - were dreamers.  One rural dealership had clapped-out 150,000-mile examples that they wanted more for than the big-city dealers with low-mile units.  We downloaded window stickers, ran Edmunds pricing guides, compared models and features, and pretty soon realized what we wanted, in terms of options and what we were willing to pay.  Once we had a few picked out, we ran the CarFax on them - often provided by the dealers - to review the maintenance history and accident history.

With the Nissan, we looked at these for three years before buying.  We knew that eventually the X5 would have to be replaced, and wanted to have something in mind when that happened.  We knew pricing on those things backwards and forwards, by the time we pulled the trigger.  And we picked that truck because the Toyota people wanted five grand more for a truck with similar options - and Toyotas have a horrible reputation as tow vehicles - they sway!

All the car manufacturers have interactive websites (which can be slow and annoying) which allow you to research options and "build and price" a vehicle.  If you click on "get price" however, you will be hounded by salespeople trying to sell you an entirely different vehicle at an outrageous price. These manufacturer websites are useless in that regard, and when you try to negotiate on price, they tell you that you "have to come in" to discuss it - and at that point, well, see #1 above.

3.  Figure out what a reasonable price is to pay and then negotiate over the phone or by internet.  Dealer sites usually have inventories of their vehicles and prices and options.   With the Nissan, we looked at many of these trucks and even visited a dealer.  A year later, in late October, the sales manager calls us and wanted to move five trucks before the end of the month to make as sales goal.  Another "salesman's story?"  Probably.  But the price he quoted was reasonable, and the X5 had 180,000 miles on the original clutch. We used Edmunds "Fair Market Value" (FMV) to figure what a reasonable amount to pay was.  We haggle over the phone and once we agree on a price, drive down to look at it, and close the deal.  It was an OK deal, not spectacular.  You never come out ahead with a brand-new anything.  But it was a good little truck and I would still have it today, if it would have towed the Escape.  

With the hamster, we used the KIA website to figure out what options to get (in this case, all of them - they call it "the whole shebang" package) and then went looking for a car in dealer inventories.  After a false start in Jacksonville (those bastards!) who tried to sell us a different car, we found the car we wanted, down to the paint color, in Charleston - a three-hour drive away.  Now, wanting a particular car and color is problematic.  Once you decide you "have to have" X, they kind of have you. And if "have to have" is the new Corvette C8, well, they have you over a barrel.  But other, more plebian cars, are made in mass numbers, and if you can't find what you want in one dealer's inventory, chances are, you can find it in another's.  Or you can wait - as we were prepared to do - for the right one to come along.

As it turns out, fully-loaded hamsters were kind of hard to sell at that dealership, which catered more to an economy-minded crowd.  So they were eager to unload the car and negotiated a price that was pretty reasonable, compared to Edmunds "TMV".  We went up there, cash in hand, and came home with the car. Yes, they tried the "closing room" nonsense, but we noped out of that, and made it clear we were willing to drive away if they didn't honor the price they gave over the phone (or by e-mail, I forget which).

The same was true with the F150.  We went to look at the truck and test-drive it - something you should do with a used vehicle.   We thanked the sales person and gave her our card and told her we would think about it.  Over the next three days, she texted us and we went back and forth over price.  We had already figured out a "reasonable" price to pay and once we were below that number, it seemed like a no-brainer to pull the trigger on it.  Again, they tried the undercoating and extended warranty deal, but we noped out on that, and by paying cash, avoided financing fees and other hidden costs.

It is possible to agree on a price over the phone or by text or e-mail, despite their protestations that such things are not possible.  But be sure to ask about hidden charges - whether this is the final price and what other fees are involved.  Some dealers play a game of tacking on a $599 "processing fee" which is basically their profit in the transaction.  Or they tack on junk fees for various "services" such as loan fees, which I will get to shortly.  Don't be obsessed by these fees, but rather look at the overall price when comparing deals.  If one dealer adds on a $599 processing fee, but the overall price is less than another dealer, well, that is still a better deal, even if these fees are kind of stupid.  Sure, you can ask them to dump the $599 fee - don't be surprised if they don't negotiate further on the price, though.

4. Try to make the transaction as simple as possible - avoid trade-ins and other complications if you can.   We were fortunate in that in these last three transactions, we could pay cash and had no trade-in complications.  Not everyone can, and I couldn't when I was younger.  But it was very rare that I used dealer financing, or traded-in a car, except when I was very young and naive - and I got screwed, of course!  Today, interest rates are at all-time lows, but still people pay double-digit interest rates on cars, particularly used cars.  It is so bad that, as one reader pointed out, you can make out better buying a brand-new car at 0% financing than buying a used on at 10%.  Same payment, but a new car.

As part of the "research" portion above, you should have an idea of what your credit score is, as credit reporting agencies hand these out like candy these days.  Car dealers use a FICO-9 score, which goes to 900 for some inexplicable reason (more money for the FICO people, I guess, selling a separate score). If your credit is in the trash, really you have no business financing a car, as it will likely cost you more money than you can afford, you will be upside-down on the loan, and the car will not outlast the loan payments - it is a common story.   Get your financial house in order before you go car shopping.

I should mention insurance, too.  If you have a bad driving record and a poor credit history, you will pay more in interest and insurance than you do for the car. I did at age 25.  I was an idiot.  Don't be an idiot.  All the insurance websites such as GEICO, allow you to "get a quote" on insurance.  It can be startling how expensive insurance on a new or newer car can be.  If your driving record sucks and your credit history is poor, consider saving up and paying cash for a used car.  No, you are not "entitled" to a new Camaro, even if you think you are.

And sadly, many of the people who end up over-a-barrel on these deals, wandered into a car dealer after seeing a shiny new Camaro or Charger and decided "I have to have THAT!" at which point the friendly salesman concocted a deal, the math of which would stump Einstein (who was bad at math, but I digress) and slap temp tags on the car, five hours later.

Figure out what you can afford, not in terms of monthly payment, but overall price.  Talk to your local credit union and see what interest rates they have.  Maybe the car dealer can beat those, maybe not.  Maybe the credit union doesn't have "loan origination fees" or "document fees" attached to their loans.  I used my credit union, several times.  The interest rates were not necessarily better, but competitive (particularly for used cars) and there were no junk fees.  Plus, by separating the loan transaction from the purchase transaction, it was easier to negotiate with the dealer, particularly when I had that cashier's check in hand.

The more complicated you can make any financial transaction, the easier it is to rip off the consumer.  If you go to a dealer and want to buy the car, trade-in your old car, and have them arrange financing, that's three separate transactions you are bundling in together.  If you lease, well, that's four or more (adding in the repurchase at end of lease, plus excess wear charges).  If you keep it down to "I give money, you give car" it is easier to see what you are actually paying, as opposed to what you think you are paying.

So, if your old car is nearly worn out (but not past the Weibull curve) you can sell it to a friend or neighbor, for a few dollars.  Chances are, that is more than the dealer will give you - such cars are usually wholesaled.   A friend of mine recently traded-in a 20-year-old 300,000 mile Subaru.  Yes, it can happen, but she threw thousands at it, before throwing in the towel.  By the time she traded it in, one side window was made entirely of clear packing tape  Was that worth the hassle? Anyway, they gave her $50 for it and the sales manager said that was too much!  It was more of a hassle to dispose of the car for her, so in effect, she gave it away.  If you have a three-year-old car, well, it gets trickier, as you want to get good value for it, and it is a lot harder to sell private party.   But once you bundle the "trade" into the deal, well, good luck, as now you have to research what a reasonable trade-in value is, and that will always be lower than what it would sell for.

The point is, the simpler you can make the deal, the better.  The worst possible way to go about this is to go into a dealer and say, "I want to spend $500 a month!" and they will put you into the worst jalopy they can get you to accept - for $600 a month, of course.

* * * 

That's about it.  Not very sexy, it is?  Just basic common sense - which is becoming less and less common these days.

But what about that listical I clicked on, online?  It said there were 34 secrets I should know!  Well, we all know about click-bait articles by now, don't we?  "The States best for Retirement" for example, uses two slides for each of the 50 States, and says little or nothing at all about each - but got you to click on 100 slides, didn't it?

It is not that such articles are entirely worthless, only that they tend to state the obvious.   Some of them are what I have stated above - do the research, simplify the transaction, don't fall for add-ons in the closing room.  Others are somewhat helpful - buying at the end of the month (when sales goals are short) or end of the year (when they want to move out last years' models).  With the latter, of course, the resale value of the car is often even worse than before.  You buy a 2013 model in November of 2013, and by January of 2014, it technically is a two-year-old car (since 2013 models were on sale in 2012).  If you plan on keeping the car for many years (and you should) it makes no difference.  That really only affects the buy-and-trade mentality people - and they are hemorrhaging cash anyway.

I guess I should mention that big-city dealers are often a better place to get a bargain than small town dealerships. Not only will they have a better selection, they get bigger kickbacks from the manufacturers in the form of sales incentives for selling volumes of cars.  The big city dealership wants to move X cars by the end of the month to make that sales goal.  The small town dealership doesn't care, because they only sell a few cars a month.  And often, small town dealerships rely on shady financing and high-pressure sales tactics to move cars - they want high profit per car, rather than a small profit on a number of cars.  Our local Nissan dealer, for example, had trucks on the lot two model years old, unsold, brand new, and were asking sticker price for them!  The big city dealer had a current model year truck - at a higher trim level - for less money.  And by trim level, I mean the difference between manual and power windows!

In our small town, the local dealers rely on poverty financing, as there are a lot of poor people.  They aren't interested in me with my checkbook, as I am no fun at all. They seek out the bad credit, high-interest buyers who are upside-down on their current car.  They count on repossessing the car as a matter of course.  They just re-sell it to some other chump, at an even higher price.  You're never going to get a "good deal" from a shady operation like that, so why bother trying?

And in that regard, the car dealer and car salesman hates buyers like me and you (hopefully you).   Cash buyers and educated buyers are no fun at all - they only want us at the end of the month or end of the year, when they can sell a car quickly and cleanly.  As a salesman, why waste valuable time with a "prospect" who buys only every ten years or so, and isn't going to fall for all of your gags?

I mentioned leasing in passing, and have a separate posting on that.   Again, the more complicated you can make a deal, the worse off you are.  Many folks like the idea of leasing, as they pay less per month and get a new car every few years.  These are the same folks who have a "contract" cell phone plan and brag about how every so often they get a "free upgrade" to a new cell phone - not realizing that over time - and not a very long period of time - they are paying thousands more for cell phone and data service.

A friend of mine has a fancy iPhone, but in order to be able to "afford" it they have a contract plan with little or no data.  "We just use Wifi!" they chirp, and every time they want to use data on their phone, I have to turn on my Wifi hotspot on my phone so they can use my data.  It is, in a way, like another friend of mine who serially leases cars. Whenever we go anywhere, they say, "Can we take your car?  I'm only allowed 12,000 miles a year, and I'm going over my limit!"   I guess I have a lot of deadbeat friends - who regale me with how great their iPhones and leased cars are, as they use my old equipment that they make fun of.  Gee, I should find new friends (or leave the hotspot off!).

Funny thing, too.  When my car-leasing friend turned in their last car, they owed $5000 in "excess wear" and "excess mileage" charges.  They decided to get off the leasing merry-go-round but the only way to do it was to fold those wear charges into a new car purchase loan.   Dealers love leasing as it locks you into buying the same brand or family brand of cars, often from the same dealer.  Great for them, not so great for you.  The "free cell phone upgrade" gag is about the same way, I guess - once you are with Verizon (or AT&T - which use incompatible technologies) you are kind of stuck.  Who wants to walk away from an upgrade?  If you just stick with it another year - free iPhone!  But I digress.

The point is, you are never, ever going to "beat the dealer" and get a car for a steal of a price.  The best you can hope for is a reasonable deal at a reasonable price - and you'll only get that if you do the research, and settle early on one make and model car and then shop the hell out of that.  And even then, only if you simplify the deal as much as possible

In my lifetime, I only "beat a dealer" just once, when I bought a motorcycle in the dead of winter, during a snowstorm, at a decent price.  I crammed down the owner, as he had zero showroom traffic and a rent payment to make.  And part of this was getting him to throw in accessory items (helmet, luggage rack, cover) as part of the deal.  Those are high-markup items he hoped to make a decent profit on.  But they were also display items in inventory, so it didn't really cost him much to throw them in.  It helped that I was buying a slow-selling model as well.  He groused about the whole deal, but went along with it.  After all, I needed a motorcycle like I needed a hole in my head.  I guess I got a pretty decent deal on it, as three years later, I sold it for what I paid for it new, which is unheard of with motorcycles - particularly Japanese bikes.

But that is the exception to the rule.  And likely he broke-even on the deal.   And it wasn't like I got the bike for $50 or anything outrageous.  And you know what?  In retrospect, I would have been better off not buying that bike - as well as most of the vehicles I have squandered money on over the last 45 years.  You never come out ahead buying a car - it is a depreciating thing, an expense, an appliance. Oh, sure, if you are astute, you can "curbstone" a car and buy it for cheap, fix a few things and flip it - but it is a business and involves work - it ain't free money.  For the rest of us, it is just a huge life expense, the largest in our budget, in many cases.  Even a basic car can cost you $7000 a year in expenses - believe it or not!

Cars are often sold on an emotional basis - in fact, almost always. Even if you are buying a new delivery truck for your business, chances are, you look forward to having a nice clean, new truck that is this years' model.  As the salesmen training videos on Youtube say, people want a new car, so it isn't hard to persuade them to buy one.

And it goes without saying that cars as Christmas presents is just nuts.