How to Choose a Used Car Dealer

A car loan can be a good way to either reinforce a record of bad credit or to rehabilitate to good credit.  But it isn’t easy.  Sometimes bad choices can make it more difficult.  Perhaps the most important choice you will make isn’t the car,  payment, or down payment; it’s the used car dealer you’re buying from.

There is a rule in life: pick your partners carefully.  It also applies to picking the used car dealer you buy from.  So how do you know where to go and who to believe?  Here is some advice from an insider:

Don’t Believe Advertising Hype

Some dealers spend huge amounts of money on expensive TV ads and internet campaigns designed to get customers on their lot so the sales team can latch onto them and convert them to a sale.  Sometimes the advertised “deal” only applies to a single vehicle, which is explained in the fine print at the bottom of the ad. This is no assurance of integrity and no assurance you will get a good deal.  Remember the dealer has to recover the cost of that advertising and it comes from whatever they can get out of customers.

“Bait and Switch” is a tactic some dealers use to trick customers to come to their lot thinking that they’re already pre-approved or expecting to put little or no money down when that isn’t necessarily true. For example, “no money down,” “99 cents down” or “no payments for 60 days” might be a bait and switch tactic to get as many potential customers to the lot as possible, knowing that many of them will have to be told they don’t qualify for the promoted “bait”.  It is all about getting you to the lot to get you excited about getting a new car, from them, and then getting you past the disappointment of no money down and willing to put a bunch of money down in order to get what you want.

If it sounds too good to be true it is too good to be true. Water runs downhill, nature picks the path of least resistance, and all of us want to believe something is going to be good and easy when our better sense says it is not and won’t be.  If it sounds too good to be true it may be because the dealer is unscrupulous and wanting to trick you into a deal that is good for the dealer and not good for you.  Tomorrow is too late to find that out because then you are stuck.  The Latin phrase is “Caveat Emptor”, basically “Buyer Beware”.

How is the Dealer Rated with the Better Business Bureau?

The traditional place to check is the Better Business Bureau (BBB).  Does the dealer have a good rating or bad rating?  Look for Dealers with an A+ rating.

Look for Favorable Customer Reviews

Used car dealers have a reputation for dishonesty and sly dealing, but not all are that way.  You can find a good used car dealer with a good reputation.

• Check out the dealer’s reputation on Google Reviews – The growth of social media has enabled Google Reviews to become a powerful source of information.  Does the dealer have a lot of customer reviews?  What is the “star” rating?  Are they mostly positive or mostly negative? Choose a dealer with the most consistent positive reviews.
• Seek out referrals from people you trust –  Customers are increasingly conditioned to not believe car dealers’ TV ads.  But usually you can trust your friends and family to give you the straight story.  Ask them who they might recommend that you go to and who they might suggest you stay away from.
• Check out customer testimonials – If available, check for testimonials to see first-hand what their real customers have to say.

Find Out Who is Providing the Financing, and Where They Are

You will spend one or two hours, maybe a bit more, with the car dealer deciding what you can afford and what you like.  You will spend the next several years making payments.  Who will be getting those payments?  Where are they located?  What are they like to work with if you have a problem with either payment or service?  Most used car dealers sell the car and get the financing provided by an unrelated, and usually out-of-state national finance company.  Your payments will be due to an out-of-state finance company and if you ever have a problem your only recourse is by phone or in writing.

Choose a dealer with a local finance company. If you ever need help they will be able to meet with you in person to help you succeed with your car loan.

Do They Report to the Credit Bureaus?

If you want to fix bad credit you have to have financing with a company that reports to credit bureaus.  If the company doesn’t report to a credit bureau your payments will be “off the grid” and you will not get credit for your good payments.   There are 3 major credit bureaus:  Equifax, Experian, and TransUnion.  It is best for the customer if the dealer or finance company reports to all three of these major credit bureaus so that you can build good credit using all three of these credit bureaus.   Many dealers and finance companies, however, report to just one or maybe two of the major credit bureaus, trying to get by with the minimum effort and cost.  In order to re-build your credit as fast as possible find a dealer whose finance company reports to all three bureaus.

Does the Dealer Use Late-Payment Shut-Off Devices?

Some dealers use “payment devices” that are programmed to disable the vehicle’s starter if the customer’s payment is past due a certain amount of time.  Dealers and the companies that sell these devices argue they are an advantage to customers to help remind them to make their payment.  We tried using the payment devices for about 18 months and have since decided to quit using them, finding that they were a poor substitute for person-to-person communication and not really effective at helping customers stay successful.  If you feel you need a reminder to make your payment and are willing to have your vehicle’s starter disabled, you will probably be comfortable buying from a dealer where such devices are used.  If you feel that these devices are an insulting reminder that you need to improve your credit, you’ll want to choose a dealer who has a higher regard for their customers.

Does the Dealer Have a Warranty or Service Plan?

Some dealers promise a “free” and sometimes “lifetime” warranty.  If it sounds too good to be true it probably isn’t really true.  Dealers don’t do anything for free.  If it says it is free they will have added it to the sales price of the vehicle so they can hide the cost from you and say it is “free”.  The devil is in the details, and in the case of used car warranties the devil is in the fine print.  In a lot of cases the so-called “free” warranty is written by management and lawyers intent on minimizing cost and minimizing coverage.  Many times there are “gotcha” clauses that seem innocent but are written to give the dealer the option to deny coverage and transfer cost and risk to you, the trusting buyer.

Ask about service after the sale. Vehicles are getting more and more complicated and parts will wear out with use.  That is why a legitimate service warranty plan is so important, and it also means that service after the sale is critical to keep your vehicle maintained and in good working order.  Does the dealer have a service department or if you have a problem the dealer just says “not my problem and I can’t help you”.  If the dealer has a service department are they really dedicated to providing good customer service or do they really want to just minimize warranty coverage and push cost on you?

Integrity Auto Finance holds to the enlightened view that a car deal isn’t good for us unless it is also good for you.  Check out our BBB A+ rating and our great rating on Google Reviews.  Understand how proud and honored we are to be a Top 5 Winner in the 2015 Oklahoman Readers Choice Best Place to Buy a Used Car contest and to be the Number One Winner in the 2016 Oklahoman Readers Choice Best Place to Buy a Used Car contest.  So please come see us to check us out in person!