What’s Happening Behind the Scenes at a New Car Dealer

Have you ever been to the new car dealer showroom and wondered just exactly what is going on behind-the-scenes? Here’s some background that may help you understand your new car dealer just a little bit better.

• There’s a lot of moving pieces involved in a purchase. Whether you are buying a new car or a used car, there can be a lot going on. Most people who walk into a new car dealer do so on the weekend. The slowest day is usually Tuesday. If you go in on the weekend, you may see lots of salespeople helping customers look at cars, but there is almost certainly a bottleneck back in the financial office, where managers are offering extended warranties, and customers are considering offers and reading through paperwork. While that is happening, cars are being washed, gassed, and prepped. For those who have not yet struck a deal, the car dealership has to run credit checks, get approvals for loans, get an appraisal for any cars being traded in, and negotiate a final price. Whether you want to buy a used car or a new car, there are a few things you can do to speed up the process.
• Don’t forget your driver’s license and insurance. If you are going to drive a car away, the new car dealer has to be sure that you are legally allowed to drive. They also need to have proof that you have insurance.
• Bring the information for your trade-in vehicle. If you are planning to trade in your old car, you will have to prove that you own it! Don’t forget to bring the title, or pink slip. You also need to have a copy of your current registration. You’ll also want to bring the account number for the loan on your trade-in if you have one. All this proves that the car belongs to you and that there will be no issues later if the dealer buys it off you.
• Come ready to pay. You might be paying with a bank check, a credit union check, cash, or a money order. You may even pay by credit card after the financing is done for the loan. Find out before you go what kinds of payment the dealership accepts, and if you want to really speed things up, call ahead and ask to a financial manager.
• Why does the salesman disappear for so long? After you start discussing things with the salesperson, he or she may say that they have to talk to the manager, and then disappear. What’s going on? Most salespeople at your new car dealer are not authorized to make a deal on their own. They can’t decide the trade-in value of your old car or offer a discount on a new car. They have to get permission from the sales manager, who will be busy working on the same things with other salesmen, too.
• Why can’t I test drive right away? If you saw a car online and stop by to look at it in person, remember that there is only so much space at the new car dealership. The car might not be on the main lot, and it may have to be driven to your location. Then it will have to be prepped. If you want to avoid this problem, call ahead and make an appointment to test drive a specific vehicle.
• Are they making a lot of money off the sale? Most people assume the dealership is making a lot, but these days the markup is quite small. Even if you pay full price for a new car, the dealership may bring in less than $500 in profit. That’s barely enough to cover expenses, so most dealerships now make their income in the service department, in used car sales, and in the finance office.

Buying a vehicle can be a complicated but rewarding process. There’s a lot going on at the dealership, prepared, call ahead, and maybe go in on Tuesday.