A recent listener to the Clark Howard Podcast says that they were in the market for a new vehicle and went to a car dealership.
Shopping for a New Car? Read This
T.J. in South Carolina says, "Instantly, the GM [general manager] was there in my face. He wanted me to sign a form to drive the car off the lot [for a test drive]. I told the GM I was already working with my bank and preferred not to fill out a credit app. He said it wasn't one, but it allowed him to do a soft pull. No hit on my credit. I knew my credit was fine – 780 – and again said no, please. That night, I had an alert of four hard pulls on my credit. My bank said I could call the dealer and ask them to retract their inquiry, so I did.
“Two weeks later, I got a legal letter of credit denial by mail from the dealer. I feel it was unnecessary and that they’re trying to harm my credit since I didn’t buy from them.”
Clark says, unfortunately, it has become “semi-standard operating procedure” for car dealers to ask to pull your credit — even before you’ve said you want to buy anything.
“Dealers routinely want your Social Security number supposedly to comply with federal money laundering requirements, and that’s not supposed to be done as a procedure of pulling your credit with a hard inquiry,” Clark says.
The Way To Buy a Car Today
Gone are the days when you would whisk around to different car dealerships and talk to a car salesman or saleswoman for two hours or more about which vehicle fits your style and budget.
“The only thing I want you to do at a dealer is a test drive to see if you want that particular make and model.
“I want car purchases to be done online,” Clark says. “I do not want you doing business with the dealer in person except to take delivery.”
Clark says the car-buying process can largely be done on the internet now. And one of the greatest tools you have is in the palm of your hand: your smartphone.
Online Resources for Car Buying
Before you purchase a vehicle, check out a few of these resources from Clark.com to help your wallet.
Final Thoughts
Be careful about giving out your personal information, even to a car dealer. And never give out your Social Security number to do a test drive.
Do the car-buying process online. And always know that you can negotiate the price.
"Except for CarMax or Carvana, the dealer is going to have a fake price on the vehicle, so you've got to do your homework," Clark says. "With your phone on you, you're able to look at real-time data when you're at a dealer after having already done your research and you can say, 'Wait, wait, wait. Edmunds says resale value is this, not what you're saying,' on what the worth of the vehicle is."
The post Warning: Don't Make This Mistake if You're Shopping for a New Car appeared first on Clark Howard.