New Car Finance – How to avoid being taken for a ride

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What happens when you go into a car dealership? The first thing you hear is:


“Congratulations. You’ve successfully negotiated the purchase price of your new or used car. You’ve made a great deal!”

Next, you’re ushered into the dealership’s “Business Managers Office” where you’re introduced to a pleasant, well-groomed man or woman who congratulates you on your purchase. They reassure you that you made a wise decision and that the tough part is over so now you can relax. You sit and breathe a welcome sigh of relief.

The Business Manager will go through the formalities of the various forms relating to the vehicle purchase and some financing terms. Along the way, they will offer several ‘extras such as an extended warranty, car insurance, gap insurance, perhaps even disability insurance. What you had in mind to spend at this point can reach new heights within minutes of taking a seat.

If you’ve ever bought a car from a dealership yourself, this probably sounds all too familiar!

You’re relaxed, the negotiating is over and your guard is down making it easy to be swayed into purchasing the next add-on.

Meanwhile, you’ve been told that you’re getting a ‘really low rate’ and that the finance has been approved before you’ve even stepped out of the dealership!

Car dealerships make a larger gross profit from the extras than they make in the actual sale of the car. And they’re experts in denying the customer the opportunity to shop around for a loan to make sure they’re getting the best deal.

This is where we at Intuitive Finance come in. We can help you combat the dealers by setting up pre-approved financing even before our start shopping, helping to keep the finance away from the dealership.

Here are some tips to assist you to combat that “pushy” car dealership:


  • Setup a pre-approval prior to purchasing a car – It’s important to keep the transactions separate. At Intuitive Finance, we are the professionals in the finance space, let the car dealerships prove they’re the professionals in selling cars and always try to keep it that way.
  • Do to not let your guard down in the Business Manager’s office – no matter how friendly they may come across, they are in that job for one purpose and one purpose only – to empty your pockets!
  • If you get told ‘a rate’, it’s likely that it isn’t accurate. Make sure you have the actual payments that they were given – dealers are very good at ‘saying what people want to hear’ because these will probably not represent a true rate when it comes to doing the math.
  • Make sure that you understand all of the additional fees and charges that are going to be part of the dealership finance. Business Managers can conveniently ‘forget’ to tell you about the establishment fees or account keeping fees, or worse still simply lie about it.


Intuitive Finance – the smart choice

The world of banking and finance can be a pretty daunting one for both novice and sophisticated investors and since our establishment in 2002 we’ve focused on providing outstanding service and business standards. This approach was vindicated when we were recently named Victoria’s favourite mortgage broker at the 2015 Investors Choice Awards. For expert advice on lenders mortgage insurance, contact Intuitive Finance.

Discuss your specific needs & formulate the right strategy for you. Get in touch to organise your complimentary 60min session today!

The information provided in this article is general in nature and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information you should consider the appropriateness of the information with regard to your objectives, financial situation and needs.

Andrew Mirams

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