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The Automotive Sales Process – How to Protect Your Down Payment
So we here this A LOT! “I just saw a deal of a life time, possibly my dream car, should I put money down on it?” The answer is two part…
YES – If you have been searching for a long time for this car and finally found “The One” then yes… Put some money down on it so she doesn’t slip away on you or someone else buys it out from under you… With this said, you need to protect yourself…
YES W/ a Disclaimer – As a consumer advocate and helping protect used car buyers money that is still in their pockets I urge all types of used car buyers to add a stipulation in their money down contract that says that they can get 100% of their down payment returned if the vehicle is NOT found to be in described condition by an independent auto inspector. Here is how to get this done…
Step 1 – Contact the seller, write down his first & last name (spelled correctly) if the vehicle is being sold by a dealership be sure to get BOTH the dealer’s name and the sales person’s full name. I suggest that you communicate mainly by email so there is a deep traceable paper trail and no she said / he said issues or misunderstandings later on.
Step 2 – Tell that person you are interested in the vehicle (described it exactly as they have it listed online) I often suggest copy and pasting the exact description word for word from their website or eBay listing. Let the sales person or seller know that you would like to place money down on the vehicle for them to “hold it” and word an agreement up that says your money is fully refundable (use the terms 100% refundable) if the vehicle is found by your independent auto inspector not to be as described. By this time you should have already researched independent auto inspectors in the area of the vehicle and have confirmed with them that this vehicle can be inspected at the seller’s location. Please note that some auto inspections come with oil analysis testing which take a few days to get the results on… This is part of the inspection process and should be included in your agreement… Not just the checklist portion of the inspection. This way you are not stuck buying a nice looking car with a junk motor or transmission.
Step 3 – After you have the agreement signed by the dealer / seller and you have also signed it. Hire your auto inspector, let your auto inspector know that you have placed money down on the vehicle contingent on the results of the inspection and tell them about any specific areas you are concerned with, be sure to send this to your inspector in writing.
Step 4 – Communicate efficiently with your auto inspector and dealership to ensure that the vehicle will be 100% ready for inspection and available to the inspector as many auto inspection companies have policies that state if their inspector shows up and the car is not ready you have lost your inspection fee or a revisit fee is applied to your inspection cost as well.
Step 5 – Visit a great resource such as Escrow.com to protect your investment and understand the process that the finances go through.
Should I Get a Pre-Purchase Inspection if I Buy a Used Car from a Franchise Dealership?
Obliviously if you have found this blog post then you are a pretty serious car or truck shopper and are likely getting ready to pull the trigger on a used vehicle that you are considering purchasing from a franchise dealer such as Ford or Chevrolet. Here are some things you should know about purchasing a used vehicle from a franchise dealership and be sure to continue to ask yourself if you should have an independent auto inspection done before you buy.
- Many of their used cars come from the auction system – This means that they had a buyer go to the auction and watch for good deals to cross the auction block. We all know how the auction system works, highest bidder takes the vehicle but what you might not know is that the “buyer” might not have ever even seen that vehicle in person. Many of cars today are auctioned off over the internet and dealers be them blindly based on CarFax and an auction pre-sale inspection which consist of a walk-around kick the tires inspection and nothing mechanically.
- Certified cars are just as scary as used cars – The only difference between a certified pre-own vehicle and a used car is that a CPO vehicle has an extended warranty standing behind it that the warranty company (sometimes the manufacturer) requires it meets certain criteria. Often this criteria only requires 50% on brakes, tires and no more than two cosmetic repairs done to two touching panels. In other words it can have two replaced fenders but not a fender and a door on the same side. Often these vehicles are inspected by the selling dealership‘s service department who is only paid a very small fee for doing this inspection and is often such as a lube tech or tire changer.
Now that know a little bit of inside information about how dealerships buy and sell cars, ask yourself the question again whether or not you should have your own inspector do an inspection for you. Click here to see what our pre-purchase auto inspections consist of.
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