Be Careful and Be Aware of the Warranty!Tips on how to NOT get taken by warranty tricks or scams.
With our dealership, Recon Ready Auto Sales, we began with the idea that we would be MUCH MORE than the average used car lot. This is somewhat hilarious, because we are MUCH SMALLER sized than most dealerships of any kind. We obviously have to operate within the same bounds and goals of ANY used car lot, in that we must bring in vehicles (inventory) and sell those vehicles to remain in business. We are nearing the end of our first complete year in business, so we’re successfully getting the kind of cars we believe in, into the hands of folks that know a great deal when they see it. This is wonderful, BUT we still have other goals, and one of which is to help EVERY CAR BUYER be better informed and one day, maybe more and more folks can use our expertise (especially Dave’s expertise) to approach finding or buying ANY vehicle, EVEN IF IT’S NOT ON OUR LOT!
All that said, we’d like to approach but one important subject that anyone who’s looking to buy a NEW car may run into at a dealership. The subject is the dealership warranty. So many car buying customers, even the shrewd ones, are very concerned with the price, bargaining that price, and getting the best deal figured out while trying to “beat the salesman.” What many don’t realize is that the real game hasn’t even begun until you reach the finance department.
There are many areas where your AMAZING DEAL can be slipped out from under you when it comes to the financing of your new vehicle purchase, but we are going to focus on part that slips even further under the radar: the warranties. There are different kinds of warranties, but at the end of a day of test-driving, negotiating, getting excited about the prospect of a new shiny car, and committing to a final deal, let’s face it, you’re probably a little exhausted. If you haven’t gone through the process very often, the warranty parts of the deal seem like sensible add-ons, and some of the protections and warranties are, in fact, good ideas that even our experts might recommend. But not all warranties are created equal.
The first thing to understand is that the word “warranty” means nothing in and of itself, until you know EXACTLY what it covers and how that coverage is doled out. “Bumper to Bumper” warranties are, of course, much more complete and therefore valuable. “Drive Train Warranties” are tricky, because they can protect against major failures that are not normal and unfortunate, most new vehicles will not have any kind of failure that utilizes this warranty until far after the mileage limit is reached. In some cases, the dealership may sell you a warranty for two or three thousand dollars as an add on, but if you were to read closely, It may actually overlap a manufacturer warranty that is already in place or less expensive. It’s hard to say this, because it sounds damning, but it can literally be an add-on that, in effect does NOTHING for you. To be fair, you would actually be getting that warranty, and it would protect you, so they aren’t stealing, but if you know how to compare, you may see that you can save the money and have similar protection without it.
Our first tip is 1) To slow everything down—-Ask questions. If ANY warranty is included in the total price or monthly payment they are quoting. Stop everything and ask what that warranty covers AND how much of your monthly payment is going toward that warranty. They must give you clear answers to these questions. Sometimes they will mention that “the warranty is included,” which makes it sound free, but just make sure and ask specific questions about where they say the options are.
2) Ask about ALL warranty options—-They may present you with one warranty option, but make sure that you don’t already have a manufacturer warranty that you don’t have to pay for. You may find that the warranty they are selling you doesn’t cover much more. Conversely, you may be able to ask about a more comprehensive EXTENDED WARRANTY that will cost you more, but this may actually be worth the cost in the long run.
3) If they tell you that YOU MUST purchase a warranty, then beware of a scam situation—-When you start asking questions and pushing back on the warranties, a convenient answer back for them might be that they cannot finance you without a warranty purchase or even one warranty they are presenting in particular. This might be true for them, but it’s usually just an aggressive tactic, and doesn’t actually make much sense. Think about it, they are risking lending you the money for the car, so it’s SAFER for them if they lend you more(?). Yeah, right—that doesn’t make a ton of sense. If this becomes the sticking point, be prepared to walk away, and also it may be time to consider setting up your financing and pre-approval elsewhere BEFORE going to buy your car. That brings us to our next point (actually IT IS OUR NEXT POINT),
4) Especially if your credit isn’t quite perfect, but really in ALL situations, please consider going to the bank or credit union you trust most, and look into getting your financing set up through them. This way, you can take that part of the equation out of the dealership’s hands before the deal even gets there. The warranty issue becomes separate and you can handle your warranty coverage for EXACTLY what it is, and what value it provides. Using an outside financial institution is also a great way to shop for used cars. Our lot does not currently offer financing, so we encourage folks to start this way, and come to us for a great deal on a car, and no extra gimmicks.
5) Get Ahead of the Game – This blog article may have helped “wake you up” to the possibilities, and complications, in buying a brand new car. But this article is pretty short and we’d like you to continue doing research and get some knowledge that can protect you. We’d like to cite an article we referred to on carbuyingtips.com, but also they provide some great info on buying an extended warranty that you should check out and make sure you “Get ahead of the game!”
Remember to give us a call—primarily David—for extra help and advice. We are actually willing to help you buy a new car, as we have many connections with local dealerships, and have helped many NEW CAR BUYERS find the car and deal they are looking for. Of course, we’re always ready to help with used cars and we’d love to see you down at our used car dealership, Recon Ready Auto Sales, conveniently located on South Tacoma Way!