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If we took the time to debunk every myth that exists in the car buying industry, this page would go on and on and on forever. There's a game around every corner, and a myth behind most every promise. What we'll attempt to do is to discuss the Top 3 Myths that exist out there, so even if you decide not to use our services, we can still save you money on your next new or used vehicle purchase.

Myth #1: Buying from No Haggle Dealerships like CarMax or Bankston's "No Hassle" Pricing is a good deal

Unless you just can't stand to negotiate at all, these deals are no big deals. These types of dealerships are relying on the fact that you're intimidated by the mere mention of negotiation. They show you the Kelly Blue Book Retail value of a car, and then their price, and it seems at first glance to be a pretty good deal. But, let's take a closer look. The CarMax in Plano, Texas has a 2002 Ford Crown Victoria LX with 23,000 miles listed for a "No Haggle" price of $12,998*. The Kelly Blue Book retail price for this car is $12,345. Wow! What a deal! Not. That's priced even $600 over the full Retail Value, albeit with the CarMax guarantee on top of it? Shouldn't you snap that car up?

No. Let's talk about Retail Book Prices for a moment. Have you ever watched The Price is Right or any other game show and seen the suggested retail prices of the appliances, electronics, or other prizes and thought to yourself, that's way too high! That doesn't really sell for that price. Well, that's what Retail Book Prices on cars are like.

Let's look at how we should approach this car. The wholesale value (also know as Trade-In, Actual Cash Value, or ACV) of this car is around $7,900 - $8,700 (if it is in excellent condition). In other words, that's about what the dealership owns the car for. That's what they would have given you in cash had you approached them to sell the car outright. Add in their "Make-Ready" (the name given to the process of preparing the vehicle for sale on the lot) and Advertising costs and they most likely have somewhere between $8,400 and $9,200 into the car.

You could probably buy this car at a car dealership that is a traditional 'haggle' dealership for somewhere between $8,900 and $10,400 depending on various factors such as the time of year, day of the month, weather outside (yes, even weather effects the price you pay for a car), the current economic trends, and other intangibles such as how new the salesperson is to the industry or the dealership. So as you can see, $12,998 is NOT a very good deal for this car. You'd be overpaying by over $3,000 if you bought this car from CarMax.

One positive thing worth mentioning about Car Max is that they do do a very good job in screening their used cars, so it's highly unlikely you'll get a vehicle that has had previous damage or been in a flood. However, it it will not protect you from buying a car that has had previous paint work done. We've found several vehicles on their lots that have had obvious signs of paint work done.

If you care more about the ensuring the quality of your vehicle versus just the price, then Car Max might be a good choice for you. But, keep in mind that many used vehicles still retain their factory warranties, *and* CarFax reports can tell you whether the vehicle has had any previous damage or flood claims.

Myth #2: Buying a Rental Car or a Demo Car is a good deal

Absolutely not. Let's look at Rental Cars first. To begin with, nobobdy treats their rental cars with much respect. It's not your car, so who cares. A scratch there, a ding here, spilling coffee on the upholstery - it all adds up. But wait, don't they get washed each and every time they're returned? Yes, with the same type of quality wash you get when you go thru a free or $1 car wash at your local gas station. These companies are working thru dozens of cars every day. They don't have time to hand wash and/or wax each and every car as it comes in. You'd be lucky if the car got dried off all the way after it went thru the wash. What does that matter? Dried soap and water on an unwaxed car are some of the quickest ways to ruin the luster of a new paint job - which effects the long term quality of the paint and the subsequent value of the car for you. Yes, rental cars have their routine oil changes and maintenance done, but once a car hits enough miles where it's going to need more expensive items like brakes, tires, or otherwise, it's most likely time to sell - perhaps to you if you're not careful.

Demos are cars that dealerships use to let their salespeople, managers, or owners drive. Once they hit a certain amount of miles - usually 5,000 or 6,500 - they get 'grounded'. Once grounded, they're under the gun to get these cars off the lot - often with spiffs or incentives to the salesperson who sells it. These cars are often smoked in, - even if dealership rules prohibit it - driven hard - especially if they are high profile or high performance vehicles - and are generally just not good values for you to purchase. Stay away from "Program Cars" too. That's usually just a fancy word for a demo from the corporate, regional, or district offices, or a vehicle that was used in a promotional event such as a Golf Tournament or Car Show..

Myth #3: Buying a car based on a monthly payment is a good strategy

If you do, you would be a salesperson's dream customer. The easiest way for a salesperson to make a big profit on a customer is with the ones who come in saying something like, "I'm not going to pay one dime over $350 month!" No problem. A dealership can easily manipulate the cost of the vehicle you're buying, your trade-in, the number of months, or interest rates to accomodate you - and pocket themselves a tidy little profit at your expense. There is a multi-pronged approach to successfully buying your next vehicle. It shouldn't be based on only one aspect of the deal. We can advise you, teach you how, or negotiate the entire deal for you. See our services page to see how, or contact us for more information.

Myth #4: Leasing companies like D&M and AutoFlex are great ways to save money on a car?

Yes, they will save you money vs. what it would cost to buy the same vehicle, but these companies only act as brokers for major manufacturers like Chevrolet, Ford, and Honda. In our opinion, this is a HUGE myth. You can get a much better deal by spending the time to work out your own lease deal directly with a dealership.

* - Price as shown on August 4, 2006

 

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Top Used Car Buying Mistakes:

1: "AS -IS" Document
Buyers are required to sign the AS-IS document when purchasing a used vehicle. You have the right to have the vehicle professionally inspected to determine the true condition before purchase. Buyers have little or no rights after the sale.

2: Take Back Period
Many buyers believe that there is a 3-day take back period, or they can take it back if they have not made the first payment. There is are no Law stating the buyer can get their money back if the buyer is not satisfied after the purchase.

3: Used Car Lemon Law
There is no Lemon Law for used vehicles in Texas and most states. Buyers assume that since there is a new car Lemon Law protecting consumers, that there must be a used car Lemon Law.

4: Automatic Warranty
Many people believe there is a warrantee that automatically comes with a used car. Dealers are not required to give any type of warranty when they sell a used vehicle. Any warranty given by the dealer must be in writing to be enforceable. If you get a warranty, make sure you understand what is covered and for what length of time. Many dealer warrantees become nightmares once the buyer tries to use them. Note: Some used vehicles might have some factory warranty still remaining. This is different from the warrantee given by a dealer.

5: Used Car Values
There are web sites that will give used car values. Normally there are price additions and deductions for optional equipment and excessive miles, etc... However, there are no deduction for the actual mechanical condition. If a pre-purchase inspection discovers repairs needed, the cost of the repairs should be deducted from the book value.

6: Vehicle History reports (i.e. CARFAX & AutoCheck)
Vehicle history reports will not tell the buyer the actual condition of the vehicle. History reports will not tell if there are existing problems with the vehicle or the quality of any repairs made to the vehicle. Vehicle history companies admit that they have very little accident history and repair history.

7: Frame Damaged and Flooded Vehicles
Its estimated that 1 in 14 vehicles on the road today are rebuilt from salvage. Many of these vehicles have clean titles. It is also estimated that 40% of all frame repairs are substandard.  Many buyers purchase  vehicles without knowing of previous accident damage. Previously frame damaged or flooded vehicles can have safety and reliability problems.

8: Certified Vehicles
There is no standard criteria for a "Certified" vehicle. Every dealer has its own certification standards which vary greatly from dealer to dealer. Most of the time, buyers are just paying for a limited warrantee.

9: Odometer Fraud
Its estimated that 1 in 4 used vehicles have odometer discrepancies. Buyers are paying more than the vehicle is worth.