I just read this article on Yahoo Finance, courtesy of Bankrate about using a car-buying service to shop for a new car. I’ve heard of this, but I’ve always been a little skeptical about the service. What if they don’t get you any deals? Do you get your money back?
The way it works is you give all of your information to the company including credit information, (scary) contact information, and information about what type of car you are looking for. Then, you shell out a couple hundred bucks, and they go shopping for you. Apparently, they are supposed to negotiate the best deal possible for you to get the new car. According to the article, some companies can negotiate prices close to invoice. However, sometimes the price they give you isn’t the “out-the-door” price.
Some car-buying services give you a price that’s close to invoice, but neglect to tell you of added dealer fees and other costs that suddenly appear when you go to pick up the car and sign the paperwork, he says.
“That good deal you thought you were getting is not such a good deal anymore,” Shebesta says.
The article advises you to get a copy of the buyer’s order before you go into the dealership to pick up the car. Also, it’s important to remember that you won’t get as good of a deal from these services if you’re looking for one of the more popular cars.
Car-buying services have their own pricing structures when negotiating deals. “Our pricing structure is to negotiate 1 percent over invoice for cars, but 3 percent over invoice for high-line vehicles like Lexus, Mercedes and BMW,” says Oxsalida.
However, some cars may not be included in these guidelines. “There are also vehicles that are excluded from our program based on supply and demand,” Oxsalida says. “For example, a new model coming out that already has a waiting list would be excluded.”
Also, the article points out that these services are not for everyone. You might do better on your own. But, make sure you go into the dealership equipped with your most powerful tool: knowledge of the vehicle.
Shoppers who go it alone are likely to have better luck if they first research the cars in which they are interested. “To learn about car values, research car sites on the Internet,” Fix says. “Know the cost of any extra features for the model you’re looking for.”
Have you used one of these services to buy a car? How was your experience? Did you feel like you saved a bunch of money? Write a comment below and share your experience if you’ve used one of these services. Please research these companies before you use them, because I can foresee there being a lot of scammers out there just looking for you to shell over your money while they don’t do jack squat to help you find a deal.