JACKSONVILLE, Fla. — The auto retail industry is absolutely massive.
In fact, according to the National Automobile Dealers Association (NADA), there are 870 new car dealerships across the state of Florida.
These dealerships employ nearly 171,000 people and all together they made more than $80 billion in sales in 2018. NADA says they contributed $4.8 billion in state sales taxes paid.
In short, they make a ton of money. So we don't need to feel bad about keeping a little bit of that money to ourselves as we do our best to save as much as possible while car shopping.
Let's cover some ideas for shopping at the dealership first.
1. Comparison shop and make the dealers meet each other's prices
As you're doing your research on what kind of car you want, and your budget, you should start emailing car dealerships about their prices.
Just in Jacksonville, heck, just on Philips Highway at the Avenues, there are dozens and dozens of dealerships. You should email or call as many as possible to get pricing for the specific car you're after.
For many people, haggling face-to-face can be hard, but if you have it in writing in an email, you can bring directly to the dealership and you avoid all that hassle.
Also, when you get a couple of outlets competing with each other, you generally win when it comes to pricing.
2. Many dealerships make their money on financing, so bring your own loan
Or pay cash.
But if that's not possible, use your own bank or find a credit union with the best rates.
According to a report by edmunds.com, with shrinking profit margins on new car sales, dealerships can make it up with interest payments on their own financing.
That's fine. But make sure you have your own, outside, best deal for financing first before walking into the dealership. That way, you know if the deal you're getting is a good one.
If the interest rate is better at the dealer, by all means, use it. But at least you'll be educated because interest will add up over the life of a 3-, 4- or 5-year term.
3. Buying at the end of the month or year
Not exactly a myth, but some dealerships will need to meet the end of the month, quarter, or year goals. As a result, they can get aggressive with deals.
So, adhere to the old saying "Shop early, buy late."
However, this can backfire.
If a dealership has already met all their goals, they may be less motivated to get aggressive with your deal. However, you can always remind them that it's good to get a leg up on the next month's sales.
But if not, you can always do Tip 4.
4. You can always leave
This is going to be one of the biggest, most important investments you make. It's going to impact your entire family's budget from groceries to vacations. It's one of the most obvious pieces of advice, but sometimes, the easiest thing to forget as pen and paper are being shoved your way.
It's never too late to just leave if you have the slightest inclination that the deal you're getting isn't the best, or you're slightly uncomfortable with the future of your budget.
There's always the online route as well. Online sales with sites like Carvana, Carmax and even eBay are surging because many people fear the idea of face-to-face haggling so much.
And what about leasing a vehicle?
A Jacksonville car salesmen told me that the landscape of leasing is changing, with more people opting for that option. He said many mileage fees are beginning to go down and you can even save month-to-month on a lease payment as opposed to a loan payment.
But of course, there are drawbacks to this as well.