3 Misconceptions About Car Dealerships

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When looking for the best new car deal in Canada, many people are often turned off, and weary when it comes to negotiating costs with the sales rep at a dealership. One of the biggest misunderstandings about car dealerships is that they don’t care about the client – they just want to make money off of buyers. While making money is obviously important for any business,  many dealers do actually want to sell a car that will satisfy the needs of their customers; no salesperson wants to receive vehicle returns, deal with complaints or be responsible for negative reviews, because it’s just bad for business. Keep reading for some of the biggest misconceptions about car dealers.

Dealerships & sales reps are primarily driven by greed

One of the biggest misconceptions about car salespeople is that they are primarily driven by greed and use questionable, and unethical methods to trick you into closing a sale. The truth is that salespeople are simply interested in doing their job but they also have to meet their monthly sales goals because failure to do so could result in a salary decrease or even job loss.

New vehicle sales are the lifeblood of dealers

According to studies, about 36% of people think that car dealerships earn over $3,000 per new car, when in fact dealers only earn roughly $1,160 per car. Dealers profit even less if the consumer wants to negotiate the price. Generally, new car buyers should expect to pay anywhere 3% – 7% above dealer invoice price when looking to score a deal on a new car. Vehicle dealerships are most known for their new car sales, yet new cars seem to be their lowest-margin product. Dealers mainly profit from post-purchase add-ons, such as replacement parts, servicing and warranty extensions. A dealer might even sell you a car at invoice price if you agree to pay the full price for the extras.

Hidden fees are ‘snuck in’ to make more money

If you’ve ever bought a car before, you might have heard the salesperson use terms such as “security fee” and “vehicle preparation fee” to describe optional charges such as VIN etching or floor mat installation. Despite it seeming like they’re speaking in code, the dealer will never charge a fee without listing it on the price quote beforehand. There are also some mandatory fees that will be included, like PDI, tire stewardship, freight, air tax, and regulatory charges such as OMVIC or AMVIC. If you see any additional fees you don’t understand on your quote, make sure you ask your salesperson for clarification. They should be able to explain them to you and allow you to opt out of a charge if it optional.

How Car Cost Canada can help you get the best new vehicle price 

So how can you get a good deal on a new car? By using our dealer price invoice report. This report tells you the price that the dealer paid for the car you are looking into buying. With the report in hand, you can then go to the dealership prepared and ready to negotiate on a better price.  

Looking to get a great deal on a new car? CarCostCanada is the place to go to get the best new car deals in Canada! Take a look at a dealer invoice report today!

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