By ANDREW J. LUCA
We all expect to pay more at the grocery store, malls and while shopping online these days. While a dollar increase for a bag of chips can certainly leave a bad taste in your mouth, the clearly marked shelf tag makes that purchasing decision yours.
Not so when buying a car today. As dealers continue to increase their sticker prices almost overnight, many potential purchasers are finding their “deal” with their salesperson changing – and 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 window sticker price on a new car uses the term MSRP, which is the Manufacturer Suggested Retail Price. The car’s manufacturer has suggested to its dealer that this figure is the amount their new car should sell for on the dealer’s lot.
Today, buyers will see the word “Premium” on an adjacent sticker attached to the MSRP. This number, on the other hand, is an additional cost that the dealer has tacked onto the car’s price usually for its own profit.
A premium, also called a “Market Adjustment,” is a result of inventory shortages, supply chain issues and/or a dealer’s operating expenses which can add hundreds or thousands of dollars to the cost of that new automobile.
Some brief research before stepping onto the lot will pay dividends in savings, even in today’s marketplace. Edmunds (https://www.edmunds.com/) and Kelley Blue Book (https://www.kbb.com/) are publicly available online resources that give their readers actionable information about the car buying process.
Additionally, each site can provide the interested shopper with specifics about the automobile they are thinking about purchasing, including any available incentives. When armed with knowledge about the buying process and the specific car being considered, the bargaining power and confidence of the consumer vastly improves as the salesperson sees you as an informed car buyer.
Know Your Rights
Even after you have done your due diligence on the car you want, where you want to purchase it from and how you expect to approach the negotiation process, you may still be told later that the terms have changed, and the car will cost more.
How can that happen, you ask. Some car dealers of late may say that no contract was ever entered into and they are willing to risk their legal lumps in light of the thousands of dollars being made with each sale these days on premiums.
Other dealers may try to use legalese and distinguish between a purchase agreement and a down payment agreement. Regardless, don’t fall for these tactics.
Here’s how not to be a victim of higher car prices. Get it in writing – email, text or the old-fashioned piece of paper. It is becoming more frequent when beginning negotiations for a new car to be told that due to inventory shortages the down payment “is the most important thing.”
As a result, unsuspecting customers are saying yes to the dealer ordering a car from the manufacturer and agreeing to an upfront holding or ordering charge. Yet, they are not being provided a Motor Vehicle Purchase Agreement (i.e. contract).
Afterwards, when the car arrives, buyers are told the price went up because of “Market Adjustments.” Before leaving the dealer, if you want that car, you want the terms of its purchase in writing. Ask to see the Full Purchase Agreement.
If “Bob” from finance is “unavailable at the moment,” have your salesperson put the dollar figure on their business card and circle that figure. 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 You’re Not Alone
At the moment, Dealer Premiums (Market Adjustments) are a part of the car buying experience. But, these unnecessary price hikes are not being found at all car dealerships and the word is getting out.
Once again, a little research beforehand can pay off big. If you are interested in a particular car, check out the dealership and whether they are one of the establishments demanding a premium well above the MSRP.
One of the ways to do so is to click on: https://www.markups.org/. This site provides consumers with a dealer’s “markups,” which are being posted by customers who have dealt with that dealership recently. The user can quickly search dealerships by name, state and the amount of the premium up-charge.
This car buying tool, like those referenced above, gives the car buyer a more level playing field when wheeling and dealing for that new ride, while helping prevent you from being taken for one.
About the author: Andrew J. Luca, Esquire is a co-founding member of the CKL Law Group, LLP and has been practicing Real Estate and Consumer Fraud law in New Jersey for nearly 20 years.