4 Reasons Not to Set Foot in a Car Dealership

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The way we buy cars has changed. After all, it wasn't that long ago that no one could imagine the ability to find a vehicle, negotiate its price, agree to make the purchase, and even buy car insurance -- all without stepping foot outside your home.

In fact, avoiding the showroom floor altogether is one of the smartest financial decisions you can make. Here are four reasons to avoid visiting dealerships and what you can do instead.

1. Dealerships are a time suck

According to the auto inspection company Pomcar, the average time spent at a car dealership is around four hours. While you can speed the process by scheduling a test drive ahead of time, you can't speed the time it takes a salesperson to saunter between their office and the finance department to present your offer (and counteroffers). The longer they can keep you there, the more likely you are to buy a vehicle.

2. They get the home-field advantage

Since the COVID-19 pandemic, auto dealerships have struggled with low inventory, which gave them all the leverage they needed to inflate their prices. When inventory is low, it's the seller who's in control.

However, after years of record-low inventories, CarEdge reports that things have turned around. Inventory now exceeds historical norms, shifting the leverage back to buyers looking for a deal. In other words, you're in the driver's seat.

Once you walk into a dealership, you give it a home-field advantage, and that leverage disappears. A salesperson is surrounded by others who have a vested interest in selling you a car and will work in tandem to pressure you into a deal.

It may be as simple as slowing the entire process down -- from how long it takes to bring a vehicle around to test drive to how much time you spend negotiating. The longer they can keep you negotiating, the more likely you will grow weary of the process and settle on a price over budget.

3. You're more likely to become emotionally invested

Buying a car is strictly a business decision. You know what you can afford to spend and how you plan to pay for the purchase. And if you're trading in a vehicle, you know how much it's worth (more on trades in a moment).

Being emotionally invested makes it far more difficult to strategically negotiate a deal that benefits you and your budget.

4. A companion can be a hindrance

If you bring anyone with you, some salespeople will try to leverage that person to steer you to sign on the dotted line, even if you're not happy with the deal or ready to buy. Saying no can be even more difficult if that person is a romantic partner.

What to do instead

According to automotive experts, taking the following steps can prevent dealership-related issues from arising.

• Schedule a test drive. It doesn't matter where you schedule the test drive because you won't purchase a car that day. Don't answer car-buying questions during the drive.
• Research the value of your trade-in (if you have one). Before shopping for a new car, know how much your old vehicle is worth. You can get a good idea by searching a site like Kelley Blue Book and then taking the car to a dealership or two for an estimate.
• Decide how you're going to pay. If you plan to finance the car, use a simple loan calculator to figure out how much you can afford to spend. It's about getting a good deal and ending up with a payment that fits your budget.
• Get pre-approved for a loan. Seek pre-approval from the bank or credit union with the lowest average percentage rate (APR).
• Commit to an "out-the-door price." This is the absolute most you'll pay for a vehicle, no matter what happens during negotiations. Don't forget that you'll also need auto insurance and money to maintain the car, so factor those into your out-the-door price decision.
• Be non-committal in conversation. During your test drive, let the salesperson know that you're not buying a car until you have time to go home to consider your options. Do not let them talk you into sitting down with them in their office.
• Go online. Research vehicles that match the model and year you're looking for. Once you find one you like, call the dealership.
• Negotiate the deal online or by phone . If a salesperson says you must come in to negotiate, thank them for their time and say goodbye. Chances are, they'll change their mind. If they don't, find another dealership.
• Keep your cards close to the vest. As you negotiate your out-the-door price, do not tell the salesperson how much you plan to spend, how much you want your monthly payment to be, or whether you're trading another vehicle.
• Be clear about contingencies. Once you've reached a deal that fits your criteria, tell the salesperson that it is contingent on taking a test drive and having an independent pre-purchase inspection done if the vehicle is used.
• Get everything in writing. If negotiations have been by phone, ask for an email containing the specifics.

You should only visit the dealership once you have a contingent deal in writing. Even then, don't agree to upgrades you haven't planned for. It's all about sticking with your out-the-door price. Remember, once it's all said and done, all that's left to do is insure your new vehicle and enjoy the ride.

Ultimately, negotiating outside the dealership is about maintaining your leverage. If a specific dealership won't work with you, plenty of others will.

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