Practically everyone has a story about how an older friend or family member got ripped off at a dealership, maybe they were sold a total lemon or got hosed on the price. As knowledgeable car folks, we have to be sure that our seniors don’t end up on the wrong side of a car deal, and these two steps are the best line of defense.
Before I begin, let me be clear: I do not believe that every older buyer cannot buy a car without being ripped off. I’m on the early side of 40 and there are certainly folks my parents’ age that will wear down the hardest of sales managers. That being said, we all know someone who just isn’t as sharp as they used to be, and/or perhaps they haven’t bought a car in so long they aren’t up to date. Navigating the car market in 2024 is very different than it was in 2004.
I’ve been helping strangers on the internet buy cars for over ten years. I’ve had my share of challenging cases and the opportunity to source some fantastic deals. Whenever I’ve assisted family members there is always an extra level of stress. Recently, I was helping both an older neighbor and my wife’s uncle with car purchases, and I’ve honed in on two critical steps that dramatically reduce their chances of being taken advantage of.
Have An Honest Conversation About Their Finances And Try To Make Them A “Cash” Buyer
Most people who haven’t bought a car in a while often have a difficult time conceptualizing a budget. When my father-in-law needed another car he had a figure of about $25,000 in his head, but when I asked him how much he wanted to spend per month he said, “no more than $350.” That’s when I fired up the loan calculator inputted a target payment of $350, assumed an APR of around seven percent, and a loan term of 60 months. That gave me a total spending limit of $17,675 including all taxes and fees. While this was a bit of a disappointing development for him as he had his eyes on a newer car, it allowed me to search for cars that were within an appropriate budget zone.
While budget conversations aren’t always the easiest with family members, it’s also important to know where they stand in terms of their credit score. The American credit rating system relies on the use of constant borrowing to maintain a high score. Some older folks who have exclusively paid cash or have had old accounts closed, may be surprised to find that their creditworthiness isn’t as strong as they anticipated. Accessing a current FICO score allows you to formulate a more accurate assessment of what loans they qualify for and at what rate.
I also strongly recommend using local bank or credit union and getting pre-approved for a loan. Having the ability to walk into the dealership with full-payment reduces the dealer’s ability to upsell them unnecessary add-ons, and ensures they are getting a loan term that is appropriate for their budget. Even if the buyer is considering utilizing the dealer financing, the pre-approval can be used as leverage to get a more competitive rate.
Of course, if your relative or friend has enough cash saved to buy their next ride, that’s great, but parting with a sizable chunk of their savings might not be the wisest move. A middle ground using some cash down to establish equity, and a manageable monthly payment could be worth considering. Loans can always be paid off early, usually with no penalties.
Have Them Spend As Little Time As Possible At The Dealership
So many folks who are used to shopping the old-fashioned way are accustomed to strolling into some local dealers and seeing what they have, then working a deal in person. When I was speaking with my wife’s uncle about his purchase he mentioned driving about forty minutes to a Chevy dealer to “check some things out” because they had a radio advertisement that “guaranteed” a certain value for a trade. After a quick survey of this dealer’s website, I determined very quickly that they did not have any current inventory that matched his needs and budget. This trip would have been a massive waste of time and could have resulted in him buying something that he either didn’t need or couldn’t really afford.
Purchasing a vehicle isn’t like buying a pair of shoes. A buyer who is just “browsing” because they are unsure of what they are looking for and doesn’t have a handle on their budget is an easy target for an unscrupulous dealer. If you are assisting someone who isn’t as tech-savvy, search for inventory online and try to have as much communication as possible with the dealership via phone or email. Get all your quotes in writing. The objective is to have details on what this person would be potentially buying and a fully itemized breakdown of the price so they can show up with a check for that total sign the papers and be on their way.
This process is easier said than done, as most dealers want their customers to do the process in person as that puts the home court advantage towards the salesperson. There are some good dealers may offer delivery of the car and the contract.
If you are reading this website you are probably that family member that everyone comes to for car-buying advice, whether they listen or not is another story. But if a parent, older relative or friend wants to you to be more involved in their process having these hard conversations about finances and doing as much preparation as possible, is the best way to avoid them ending up with a bad deal.
Tom McParland is a contributing writer for Jalopnik and runs AutomatchConsulting.com. He takes the hassle out of buying or leasing a car. Got a car buying question? Send it to [email protected]