As a car buyer, you are typically at a significant disadvantage when it comes to understanding the process and how the car dealership earns money. When you purchase items at the grocery store or most other retailers, you understand at the buyer how the store earns a profit. They purchase items at wholesale and then resell those items at a higher price to the consumer taking into account their overhead and needed profit margin. But, do you know the car salesmen tricks they use to earn a profit?
But, things are a little different at the car dealership where there are many car salesmen tricks to squeeze you out of more money. There are so many other factors that go into their business model such as financing, your trade-in, holding inventory, loans from their bank, and a host of other things that are combined into how they price their cars and what price they ultimately sell them for.
My wife and I are considering buying a new car, and I dread it. I always feel like I’m getting taken advantage of by the car salesman and the dealership. Understanding more about the behind the scenes of a car lot arms you with more knowledge, better pricing power, and a chance of earning a fair deal. Here are some things behind the veil about car dealerships you may not know.