Last week I spent a couple of hours helping a client buy a new car. Betty, who is in her mid-70s and divorced, had been in an accident a week before that totaled her car. Upon learning of her misfortune, I offered to accompany her to help buy her new vehicle. While such assistance isn’t a service I routinely offer clients, my experience told me a single woman might need an ally when dealing with an automotive purchase.
For routine oil changes, I usually take my car to a well-known national auto repair shop. For anything more than an oil change, I take it to a trusted local repair shop. I’ve been a customer of the local repair shop for nearly 20 years and feel like they practice their profession the same way I practice mine — putting the client’s interest first. However, I don’t have the same level of trust with the national shop.
At the national shop that I go to I like to wait while my oil is changed, and over the years I’ve noticed the repair estimates discussed with women tend to be expensive and complicated. Rarely do the women opt for a second opinion, ask what minimum work is required or ask if there is a less expensive option.
Gamesmanship and lack of transparency make the car-buying process an unpleasant experience in many cases. Betty knew what car she wanted and was agreeable to a couple of color options. Unfortunately, the dealership didn’t have any of those colors and pushed her to buy the colors in their inventory. I’d checked the inventory of a couple of nearby dealerships and was quick to share with the salesman that a local competitor had the colors we wanted in stock. In the end, we negotiated a purchase of the car Betty wanted for just a few hundred dollars over the invoice price. It wasn’t easy, and Betty was grateful I was there to help.
Here are a few tips to help level the playing field when dealing with car buying and servicing:
- Do Your Homework. Car pricing can be found at numerous places on the Internet. Car repair costs can also be found on websites such as RepairPal and YourMechanic. This info can give you an idea if the repair estimate is in line with the diagnosed problem.
- Get a Second Opinion. Car repairs are outside the circle of competence of most of us. If you’re presented with a four-figure repair estimate, seek a second opinion.
- Beware of Framing. When the salesman presented the initial offer, he immediately highlighted the monthly payment. This is a common tactic to make a purchase seem more palatable. $325 per month seems a lot less than $23,000. I was quick to bring the discussion back to the figure that really mattered — the bottom line. When dealing with repairs, insist on an itemized estimate.
- Good Cop / Bad Cop. Don’t go alone. Take a friend or family member along and ask them to play the “bad cop.” Let the bad cop mention nearby dealers and push for pricing discounts. It’s always easier to stand firm when you have someone by your side.
The purchase and maintenance of one’s car is a major expense in most households. Be a wise consumer and make sure you aren’t paying more than you need to.
Mike Palmer has over 25 years of experience helping successful people make smart decisions about money. He is a graduate of the University of North Carolina at Chapel Hill and is a CERTIFIED FINANCIAL PLANNER™ professional. Mr. Palmer is a member of several professional organizations, including the National Association of Personal Financial Advisors (NAPFA) and past member of the TIAA-CREF Board of Advisors.
Six Steps to Take if You've Recently Inherited Money From a Loved One
It’s important to deal with the emotional aspect first before tackling the financial one.
By Kiplinger Advisor Collective Published
Alaska Airlines to Buy Hawaiian: Get Bonus Miles Now
How to use the Alaska Airlines credit card and frequent flyer program to save on trips to Hawaii, Alaska and beyond.
By Ellen Kennedy Published
11 Reasons to Consider a 1031 Exchange
Deferring capital gains taxes might be at the top of the list, but growing your portfolio and your wealth and helping with estate planning are also compelling reasons.
By Daniel Goodwin Published
Why It’s Time to Give Bonds Another Look
Yields are much more attractive now, but you should use discretion to find the bond allocation that’s best for you.
By Bill Aldrich, CLU® Published
Estate Planning and the Legal Quirks of Retiree Cohabitation
Creating an estate plan for an unmarried couple is already challenging, but when the cohabitating couple are in their golden years, it’s especially tricky.
By David Handler, J.D. Published
Seven Financial Planning Stops to Put on Your Map to Financial Security
Creating a comprehensive plan is just the start, though. Checking in regularly to make sure you’re still on track is imperative.
By Michael E. Lewis II, CFP®, CLU®, ChFC® Published
How to Measure the Health of Your Retirement Plan
These five key indicators can help you make decisions based on the overall performance of your retirement plan rather than individual variables.
By Brian Skrobonja, Chartered Financial Consultant (ChFC®) Published
Four Easy Ways to Get Yourself Fired
Being a standout on the job can sometimes be as simple as showing up to meetings on time, responding promptly to requests, doing your homework and not being a jerk.
By H. Dennis Beaver, Esq. Published
How Might the Great Wealth Transfer Change Society?
As $84 trillion in assets move from Baby Boomers to younger generations, we could see a greater emphasis on financial technology and investing based on values.
By Jennifer Wines, JD, CPWA® Published
Why More Retirees Might Come Out of Retirement
It’s often not solely because of financial reasons, but because of a lack of purpose in retirement. This financial expert can relate.
By Chris Blunt Published