Education Matters Online
Feature

Volume 3, Issue 2: December 14, 2004

Eventually, everyone who drives will arrive at a point of uncertainty about their current vehicle’s ability to function as useful transportation. This is soon followed by arrival at the way-station of uncertainty about how to select an appropriate replacement vehicle. However, these two bouts of uncertainty pale in comparison with the inevitable angst one experiences in negotiating the purchase or lease of a new or used vehicle.

What follows is some advice gleaned from my experiences in new and pre-owned vehicle sales at a major dealership in the two years following my retirement from teaching. Relax. I’m licensed to sell, but I’m retired from that too. However, I am available to individuals or small groups as a guide to developing a selection and purchase process and to assist you in working through that process.

To minimize stress in changing vehicles, try to keep the process as clear and simple as possible. There are basically three questions one must address in sequence:

1. What type of vehicle will meet my needs for the next few years?
2. Where should I obtain this vehicle?
3. What vehicle finance arrangements are most appropriate my life phase?

Have you ever ended up with the wrong vehicle or delayed decision-making until you have spent thousands on repairs just before getting a replacement vehicle? Ouch! It may be that you have set out to answer these three questions in the wrong sequence or that you became bogged down in the myriad of details that can emerge when seeking answers to any one of the three. The solution is to recognize that you will need a replacement vehicle and to begin your search early without getting sucked into the abyss of a car dealership’s sales process. Oh yes, they all have a sales process so keep focused on your basic questions.

I’m not suggesting here that sales staff are bad. A good sales consultant will ask you questions that will clarify your needs; a bad one will confuse you. Both will try to hook you into satifying correctly or incorrectly perceived needs from their available stock to the exclusion of all others. Do not involve a salesperson until you are well-versed enough to have specific questions about his/her vehicles as compared to competing vehicles. You do not need a salesperson to find out prices. You can always get MSRP from the window labels or from internet sites and books like Lemon-Aid (by Phil Edmondston).

Question 1:

What type of vehicle ? Seeking the answer is simple -- Sunday shopping. Choose a nice-weather Sunday (no sales staff around) well before you will need a vehicle and make a relaxed day of looking at stock lots of various dealerships with those who will share the use of your vehicle or with an unbiased knowledgeable friend. Note what you like about various vehicles and visualize yourself driving them. Do this a few times and do not limit yourself to the brands / models you have always favoured in the past. Sometimes a second or third look is advisable since you may notice different positive and negative attributes depending on your state of mind or what you have seen before. From your notes and from a variety of print and internet sources, settle on a short list of two or three prime candidate vehicles.

Question 2:

Where should I get my vehicle? Consider dealerships which offer a complete range of services and support for the vehicle you select. Unless you are prepared to find someone to do the complex mechanical, electronic, financial, and insurance / body repair functions required to field a modern vehicle, you need a full service dealership. Ask for a tour of the dealership; alternatively, some dealerships will have a brochure which tells their story and outlines advantages of doing business there. Find out how long managerial and service staff have been with the company. Happy staff will treat you better. Do not purchase a used car privately, or from a friend, unless you can live with the irritations (and guilt) of malfunctions that the previous owner was worried might happen. It is usually uncomfortable for both parties to come to a fair price and, since you’re both amateurs, errors are likely. There are numerous additional pitfalls which will not be elaborated here.

Question 3:

How can I pay for this? The answer to this complex question depends on other financial commitments, upcoming changes in your life, and how your investments are performing. It also depends on whether existing industry conditions favour outright purchase, various financing options, or one of several leasing options. In addition, there are highly-advertised manufacturer incentive programs and frequently-adjusted but not advertised incentives offered to dealerships in order to manage regional vehicle inventories. You may rightly conclude that the MSRP is only the starting point for negotiating a price fair to both the buyer and the seller. Before you sign any offer to purchase or lease, you must have a bottom-line cost which includes all taxes and extras such as extended warranty, insurances, and cosmetic treatments for your vehicle. Make sure that you are presented with two or three alternative payment options for your vehicle choices. Take a day or two to think it over, but don’t wait too long because the vehicle you have chosen might be sold (an old but sometimes true ploy) or, worse still, the incentive programs may change and your price might disappear.

Admittedly, the preceding may seem somewhat vague and leaves many questions unanswered. Should I consider a new or a used vehicle? Should I lease or purchase? Is 0% factory financing for three years better than 4.9% for five years? Why do a prepaid lease? Are there optimum times of year to buy or to lease? Under what circumstances should a person purchase some of the additional “protection plans” offered at the time of sale? How can I negotiate savings? What is the cheapest way to have a car? Most of these questions require answers tailored to the individual and to the time of asking, because the nature of the auto sector is frequent marketing changes, wide product choice, and disparate individual consumer needs.

If you would like more specific answers, contact me to arrange a consultation complete with useful handouts (but no free cars). I can be reached via e-mail (mmoir@skynet.ca) or phone (519) 455-4055.

Mike Moir is the Acting President of Chapter 11 - Thames Valley Active Retired Members.

Let us not take thought for our separate interests, but let us help one another.
(OSSTF Motto)

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