February 15, 2006

Hi Tony

Great website! I have it book-marked for future reference.

I am considering the purchase of a pre-owned certified Lexus. What are the pitfalls to watch out for? I assume the cost of the vehicle goes up because of the certification, but can this cost be negotiated?

Also, my credit union has a free service where they will negotiate the cost of a new or used vehicle once given the details of what you want, take care of negotiating the trade-in, and even have the vehicle delivered to the credit union branch where you bank.

The car financing can be arranged ahead of time so all you do once you get there is sign for the vehicle. Are you familiar with these types of services and what can you share about them?

Thanks for taking the time to answer. Any information you are able to provide is greatly appreciated.

Pam G.

Answer:

Hi Pam,

Thanks for the kind words about my website.

Certified vehicles do cost more simply because they have to go through an inspection process and they come with an extended warranty. These things cost the dealer money, so they will naturally add these costs on to the price of the car.

I'm sure the cost of the car can be negotiated to some degree. Car dealers expect this and usually start out with an inflated asking price to compensate. There's no way of knowing exactly what the dealer's additional costs are on the certification process, so any negotiating you do should be on the price of the car - not on the certification cost itself.

Just offer the car dealer a ridiculously low price for the car. They will come back at you with an amount higher than you offered, but hopefully lower than their original asking price. Go back and forth through this process with the dealer several times until they won't budge anymore. This will indicate to you that they are at the end of their rope!

As far as the service offered by your credit union goes, I am not familiar with it. I can see the attraction, but I don't think you want someone else negotiating the price of the car for you. Nor should you allow a third party to negotiate your trade-in allowance. That's something you should control yourself.

Besides, I wouldn't be surprised if the credit union earns some fee somewhere along the line for this service thereby raising your cost on the deal.

Pam, when negotiating the price remember that you are in control. If the car dealer gets too pushy you can simply break off negotiations and walk out. The dealer wants your business, so make them earn it. If they get too belligerent go somewhere else! Afterall, it's your money!

One other thing to keep in mind, don't sign anything or give them any deposit until you are absolutely sure of what you want to do. Car dealers are notorious for getting customers to make a quick, emotional decision on a vehicle. You want to take your time and think things through. Sleep on the deal before you go through with it. It's very easy to get caught up in a car deal that you end up regretting.

All my very best...

Tony Iorio