By ANDREW J. LUCA
We all expect to pay more at the grocery store, in malls, and when shopping online these days. While a $1 increase for a bag of chips can certainly leave a bad taste in your mouth, the clearly marked shelf label lets you make that buying decision.
This is not the case when buying a car today. As dealers continue to raise their purchase prices almost overnight, many potential buyers are finding that their “deal” with their seller is changing — not in their favor.
Protect yourself and the deal you negotiated with a few simple steps that will keep more money in your pocket and put you in the car of your dreams.
Know the lingo
The sticker price on a new car uses the term MSRP, which is the manufacturer’s suggested retail price. The car manufacturer suggested to their dealership that this figure is the selling price of their new car at the dealership’s lot.
Today, buyers will see the word “Premium” on an adjacent sticker attached to the MSRP. This figure, on the other hand, is an additional cost that the dealer has added to the price of the car, usually for their benefit.
A premium, also known as a “market adjustment”, is the result of inventory shortages, supply chain issues, and/or dealer operating expenses that can add hundreds or thousands of dollars to the cost of this new car.
A little research before stepping into the field will pay dividends in savings, even in today’s market. Edmonds (https://www.edmunds.com/) and Kelley Blue Book (https://www.kbb.com/) are publicly available online resources that give their readers actionable insights into the car buying process.
Additionally, each site can provide the interested buyer with details about the automobile they are considering buying, including available incentives. When armed with knowledge about the buying process and the specific car being considered, bargaining power and consumer confidence improve dramatically because the salesperson sees you as an informed car buyer.
Know your rights
Even after doing your due diligence on the car you want, where you want to buy it and how you plan to approach the negotiation process, you may be told later that the terms have changed and the car will cost more.
How can this happen, you ask. Some newer car dealerships may say no deal was ever made and they’re willing to risk their legal fees in light of the thousands of dollars made with every sale these days on premiums.
Other dealerships may try to use legalese and distinguish between a purchase contract and a deposit agreement. Either way, don’t fall for these tactics.
Here’s how not to fall victim to rising car prices. Get it in writing – email, text or the old-fashioned piece of paper. It is increasingly common, at the start of negotiations for a new car, to be told that because of a shortage, the deposit “is the most important thing”.
As a result, unsuspecting customers say yes to the dealer who orders a car from the manufacturer and accept an upfront holding or order fee. Yet they do not receive a motor vehicle purchase agreement (i.e. a contract).
Then, when the car arrives, buyers are informed that the price has increased due to “market adjustments”. Before you leave the dealership, if you want this car, you want the terms of its purchase written down. Ask to see the full purchase agreement.
If “Bob” from finance is “unavailable at this time,” ask your salesperson to write the dollar figure on his business card and circle that number. Then take a moment and write an email to your salesperson (the email address is on their business card) thanking them for their time and confirming the price of the car.
Know that you are not alone
Currently, dealer bonuses (market adjustments) are part of the car buying experience. But, these unnecessary price hikes are not found at all car dealerships and the word is spreading.
Again, a little preliminary research can pay off big. If you are interested in a particular car, check with the dealership and if it is one of the establishments requiring a premium well above the MSRP.
One way to do this is to click: https://www.markups.org/. This site provides consumers with a dealership’s “margins”, which are viewed by customers who have recently done business with that dealership. User can quickly search for dealerships by name, state and premium amount.
This car buying tool, like the ones referenced above, gives the car buyer a fairer deal when they ride and deal for that new ride, while preventing you from being mistaken for one.
About the Author: Andrew J. Luca, Esquire is a co-founding member of CKL Law Group, LLP and has practiced real estate and consumer fraud law in New Jersey for nearly 20 years.