Used car shopping should be a fun and rewarding experience. After all, you’re getting a new ride! But with some of the horror stories about used car dealerships, it's not surprising why you might have a little angst.
Before heading to the dealership, it's important to know what to expect. This way, there are no surprises, and you're ready to tackle every challenge as it arises.
In this guide, we uncover what you can expect when you walk into the dealership and go through the car buying process. But first, let’s review the different types of used car dealerships you might visit.
Types of Used Car Dealerships
Not all dealerships are created equal. There are three main types of used car dealerships. Some are welcoming and honest, while others are ... well, not so welcoming.
Used Car Departments at New Car Dealerships
Most new car dealerships take in trades and expiring leases, and will even outright buy quality used cars. They then recondition them if necessary and send them to their used car lot, which is often on the same property or next door to the new car dealership.
So, when you walk into that Chevy, Ford, or Kia dealership, you'll see a collection of used models too. Depending on the size of the used car dealerships, they may have their own sales and management teams too.
These used car dealerships are generally honest, clean, comfortable, and offer all the same feelings of a new car showroom.
A bonus is these dealerships also often include certified pre-owned (CPO) vehicles. These low-mileage vehicles are from the same automaker the new car dealership sells and have been through a standardized inspection and reconditioning process.
CPO vehicles often include extended warranties and are generally in better shape than most other used cars. Plus, CPO vehicles often have financing terms as good as or better than new cars.
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Franchise Used Car Dealerships
Drive through any collection of medium-size towns, and you're bound to see used car dealerships bearing the same names and logos. These are national and local used car franchises.
Unlike the used car department at your local Nissan, Honda, or Hyundai dealership, these used car dealerships have no affiliation with an auto manufacturer. Many of their used cars come in as trades and outright purchases, but a large portion of them may also be from an automotive auction.
While automotive auctions have a bad rap, there are plenty of quality cars available there. Many times, cars end up at auction because they came from a used car dealer that couldn't sell them due to the local demographics, climate, or other legitimate issues.
For example, if someone trades a four-wheel-drive truck into a used car dealership in an area that rarely encounters bad weather, there won't be much demand for it. They’ll often send it to the auction, so dealerships in areas where four-wheel-drive vehicles are popular can buy and resell it.
Sure, there are some duds at the auction, which we'll get to later. But many of these cars are simply surplus that the original dealership couldn't sell. Because these dealers are often standardized locally or nationwide, they generally have a new-car dealership feel. There’s comfortable seating, a positive aura, and nothing that screams shady. Some smaller local franchises can get a little dodgy, though.
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Local Used Car Dealerships
Local used car dealerships are generally where you hear the nightmare stories of sleazy sales offices and the classic pushy salesperson. Some have adapted to the new normal of giving customers a calming experience at the showroom, but there are still plenty that live by the old ways of seeing just how much money they can separate from your wallet.
Not only are the facilities and sales staff less than top-notch, but the inventory is sometimes sketchy. Some of these dealerships rely on questionable customer trade-ins and the cheapest auction inventory they can find.
They then bring this iffy inventory into their service department and find the least expensive way to get them running well enough to sell. Some of the repair tactics are subpar and others can be downright unethical.
Don’t let this scare you away from all local used car dealerships, as many aren’t looking to take advantage of you and can be helpful. Just make sure to check the dealership’s online and Better Business Bureau ratings and have a touch of skepticism when dealing with them.
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What to Expect at the Used Car Dealership
No matter what used car dealership you go to, there are a few constants. However, some parts of the process vary with the type of dealership you visit.
Expect a Chauffeur
When you walk into a used car dealership, expect company. Most used car salespeople work on commission, and the unwritten rule is if you help a customer, that’s your customer until they buy. So, whether you're just browsing or are actually looking to buy today, expect a salesperson to be glued to your hip.
There are some times when a salesperson may not hover around you. For example, if it's a Saturday and the dealership is busy, the salesperson may let you browse then move to another customer who appears more prepared to buy.
However, it's ultimately the salesperson's goal to get you to buy now, whether you're ready to buy or just browsing.
Your Budget Often Comes First
Many used car dealerships aren't concerned if you want a Chrysler, Toyota, Volkswagen or any other particular type or brand of used car. They're worried about what type of car they can fit in your budget.
This backward approach to car sales often gets you into the sales office early in the process. Here, the salesperson does what's commonly referred to as a four-square assessment and a credit check.
The four-square assessment is a form with four squares on it. The salesperson puts a budgetary requirement in each square, including sales price, monthly payment, trade-in amount, and interest rate.
The salesperson will use this to determine which budgetary requirement matters most to you. Most buyers focus on the monthly payment, leaving the sales team free to play around with the other three numbers to maximize profit and still hit your monthly payment.
Once the salesperson has your budget in mind, he or she will lead you to the vehicles that meet your budget, not necessarily your needs. So, while you may have come in for a Grand Caravan, the salesperson may show you a Mazda3 hatchback or CR-V crossover that fits your budget.
Some higher-quality used car dealerships will do a needs assessment first, determining what vehicle will fit your needs. Once they determine that, they'll hit the budget side to see if they can match your needs to your budget.
The Test Drive
The test drive is among the most stressful moments for a salesperson, as this is when you may discover any flaws in the car and walk away from the deal. Some dealerships put you on a planned test drive route and try to tell you what direction to take.
They'll have you go around the block and generally keep you on low-speed, smooth roads to prevent any rattles, shakes, or clunks from cropping up.
Take your own test drive route instead. Of course, you can't go on a 30-km cruise, but hit some higher-speed roads to check for vibrations and other potential flaws. Also, hit a few streets with some bumps to test the suspension. And don't be afraid to accelerate and brake a little harder than usual to ensure everything is in top order.
The salesperson may also start showing you features of the vehicle — like its awesome stereo system — during the drive. You can check these features after the drive. During the drive, you want complete silence.
Remember, always be realistic with your expectations, though. If you're shopping for a $3,000 used Lexus, you can expect a few flaws here and there. However, if you're test driving a $30,000 used Mercedes, it should be virtually flaw-free.
Trade-In Evaluation
At some point during the process, the used car sales manager or purchasing manager will whisk your current car away to evaluate it. In some cases, they'll do a full evaluation that includes a test drive, and mechanical and visual inspections.
If your car's in good visual shape and has low mileage, the manager may just give it a quick once over to make sure there's nothing majorly wrong.
The key here is to separate you from your car, giving you the feeling that the vehicle you're test driving is yours.
Negotiation Time
The negotiation phase will come in several stages, but they're similar in all dealerships. What will vary is the level of pressure and the sales team's attitude at each stage.
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Stage 1: Salesperson Negotiation
At this initial stage, the salesperson has some negotiating power. The salesperson will tell you the car's price, your trade-in value, and estimated monthly payment.
The salesperson may know what the car’s invoice price is — the amount of money the dealership put into buying and reconditioning the vehicle — so they may be able to play a little bit with the pricing.
If you agree to a deal at this stage, you're almost certainly leaving money on the table.
Stage 2: I've Got to Talk to My Manager
Once you've pushed the salesperson past his or her negotiation capabilities, you'll get the famous "I've got to check with the manager" line. While it may seem like a hassle to wait for confirmation from the manager about a deal, it's not necessarily shady for a salesperson to do this.
Behind the scenes, the manager is checking the invoice price, the sales value and demand for your trade-in, the overall interest in the car you're negotiating for, and, of course, the monthly sales quota.
The sales manager will give the salesperson several new numbers to work with. The manager will often dramatically cross out the original deal and write the new deal in a brighter-coloured pen. This is all theatrics, but it's part of the process.
You'll go back and forth a few times with the manager to get the best deal. Don't be afraid to move to other sections of the four-square sheet and ask for adjustments to the monthly payment and trade-in value. This will keep the manager on his or her toes and ensure you're getting the best deal on all fronts.
Once the manager officially throws in the towel on negotiations, you know you've wrung them dry and are getting the best deal. If you're still not satisfied, this is the time to walk away.
Step 3: The Big Wait
Once you agree to a deal, management and the finance and insurance (F&I) team must finalize the paperwork. This stage often includes attempting to sell your credit to various lenders.
Depending on your credit, this may take a few minutes to a few hours. Sometimes, a deal unwinds at this point, meaning the dealership couldn't secure satisfactory financing and cancels the deal.
Your interest rate is based on your credit score, but it may vary slightly between dealerships because they may deal with different lenders. However, if a dealership quotes you a significantly higher interest rate than others, this is cause for alarm and you may want to look elsewhere.
Step 4: F&I and Hand Cramps
Once the financing offer is in place, the salesperson will push you off to another person, the F&I manager. This is likely the last time you'll see the salesperson, unless they accompany you at delivery, so bid them a fond farewell.
Once you're in the F&I manager's office, you finally get to see official paperwork, including the car loan terms, sales price, trade-in value, and more. Carefully review these documents and verify that they are exactly what you negotiated. Dealerships sometimes use your excitement to complete the process as a way to slip in new, more dealer-friendly numbers.
This is also another opportunity to sell you add-ons and increase their profit. The F&I manager will likely attempt to sell you an extended warranty, tire coverage, gap insurance, a maintenance plan, paint protection, and other costly upgrades.
You can usually get these options significantly cheaper on the open market, but this is your one opportunity to roll these costs into your financing and pay monthly instead of in one upfront fee.
Review the details of the coverages carefully and ask loads of questions. Also, pull out your smartphone and research each company to see how other customers rated them. Remember, everything is negotiable at the dealership, even these extended contracts.
After agreeing to everything, it's time to sign the mounds of paperwork. These will include sales orders, trade-in agreements, financing contracts, and more. Make sure you read everything you sign and that it aligns with what you agreed to.
Step 5: Take Your Pre-Owned Car Home
After all the paperwork is signed, you must wait for the dealership to prepare the car for you to take it home. Sometimes, this is nothing more than handing you the keys and sending you on your way. Other times, this may take several hours because the dealer may need to clean the vehicle or repair any issues you asked the dealer to fix as part of the deal.
When it's time to drive off the sales lot with your used car, make sure to verify it’s the same car you agreed to purchase by matching the vehicle identification number (VIN) on the vehicle with the paperwork. Also, make sure all the agreed repairs are completed and the car is in the same condition as when you test drove it or better.
Skip All The Hassle With Clutch
With all the runaround and back and forth, the car buying process can sometimes be an all-day affair. There’s no reason to spend all day stuck in a stuffy dealership when you can shop for a used car from the comfort of your home.
Clutch allows you to find a used car online in Toronto or Halifax, get the best no-haggle price and financing options, and complete the purchase process on your computer while wearing your comfy pajamas.
Once you complete your purchase, you have seven days to return the vehicle if you decide you don't like it for any reason. You can either exchange the car for another or get a full refund.
Clutch has a wide selection of quality used cars from a wide range of manufacturers, including Chevrolet, GMC, Audi, Buick, Mercedes-Benz, Subaru, and more. Plus, all our vehicles go through a 210-point Clutch inspection and include a 90-day or 6,000-km warranty, so you can find a reliable vehicle that suits your budget and needs.
