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8 Common Myths About Car Dealers

Debunking 8 Popular Car Dealer Myths


Car dealers have it rough, most people think that they are almost evil.  In truth, car dealerships are just like any other business, and in some cases are even more regulated.

Myths About Car Dealers min

The myths about car dealers run a wide spectrum, here are just a few of them.

1. New Car Sales Are Where Dealers Make Most Thier Profit

This is 100% false.  As discussed above, dealers make a very small margin on the sale of new cars.  Where they make more profit is from after sale add-ons, parts and service.  Some dealers will even make some money by offering Car Insurance on site.

2. They Add Hidden Fees

There are times when you see items on your invoice like freight, PDI, and regulatory charges, be assured that these are mandatory fees.  If you do have any questions about fees on your invoice then ask the salesperson to explain the fees.  If a charge on your invoice is optional you should be given the choice to opt out of that fee.  In the circumstance that you would like to verify anything on your invoice you may try the Vehicle Sales Authority of British Columbia, they are an independent non-profit regulatory agency that has a wealth of information on their site.

3. The Markup On Cars Is Extremely High

I am sure the dealers wish this was true, but it is not.  In a survey done by J.D. Power, 36 percent of people believe that the dealers make over $3000 per vehicle when in reality they make just of $1000.  On a car that sells for $30000 that works out to roughly a 3% margin, and that is if they sell it for the listed price.  A simple truth is that you can expect to pay anywhere from 3 to 7 percent above the dealer’s invoice price.

4. The End Of The Month Is The Best Time To Buy

This is true.  All involved, including the dealers, manager, and salespeople all have a goal or target to reach each month.  If they are below the set goal, they will push harder to get the sale.

5. Dealers Hate Electric Cars

The could be nothing that is more false.  Car dealers are in the business to sell cars and they will sell any type of car that they can.  The only way that dealers make any money is to sell the customer what they want, and if more customers demand electric cars then you will see more of these available at car dealerships nationwide.

6. Dealers Hate To Sell Used Cars

Another myth that we can say is false.  The numbers show that dealers make more money on average when selling a used car over a new vehicle.  Dealers will get used vehicles for low prices from auctions or trade-ins which allows the profit to be higher.

7. They Hate Internet Customers

Car dealers know better than others that technology changes, they see it every day with the new features that cars now come with.  Customers that come from the internet are a growing source of sales for dealers that are using it as a marketing tool.  In some cases, internet customers can be 25% of dealers sales for any given month.

8. Buy On A Rainy Day

This is very much false.  There are on average, 30 days in a month and dealers need to sell on all days.  The weather makes no difference at all in your sale price.

Are planning on buying a new car?

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