seanskye
Well-Known Member
Toh Yong Chuan | The Straits Times | Friday, Jan 17, 2014
Flush with cash from year-end bonuses and with Chinese New Year around the corner, car buyers may make a beeline for showrooms.
But before you make that unrefundable deposit for a spanking new car, here are four things you should know that salesmen may not tell you - unless you ask.
1. That new car is not that new
When you buy a brand new car, all it means is that you are its first registered owner.
The car may not be that new in relation to its product life cycle, which typically spans six to eight years.
When a new car is launched, it is always branded as "all new".
This tends to reel in shoppers, because buying an "all new" car has obvious perks. It looks fresh and trendy a few years down the road, hence holding its resale value better.
While salesmen may use the "all new" chorus to draw you in, they may not voluntarily disclose that the car you desire will soon be replaced with a new model.
Examples include the Mercedes-Benz C-class and decade-old Volvo XC90 - they are due to be replaced this year and next, respectively.
I bought a new Volvo S40T4 in 2003. The model was replaced barely a year later. The car's resale value plunged by the time I sold it in 2006. Used car dealers said it was an "old model", which I suspected was just a ruse not to pay me a decent price.
But buying end-of-life models may not be all that bad, because dealers often lower prices to move the stock. Also, ask for the car's year of manufacture. Some less popular models might have been in the yard for a while before they reached the showroom.
2. The price is negotiable
Car dealerships mostly sell cars with packaged prices, which include the car's cost and the dealer's undisclosed margin.
While most companies will not budge on their guaranteed COE package prices - they bear the risk of COE price fluctuations after all - some are flexible enough to accept bookings slightly below the non-guaranteed COE package prices.
In these cases, the dealership will still bid for a COE for the customer, but it will lower their maximum bidding price by the corresponding amount of discount, which means lowering the chances of a successful COE bid. This is the risk that customers take.
But there are other ways to get discounts - if you are prepared to accept some trade-offs. Less fussy buyers can go for showroom or test-drive cars, both of which are less popular, given that they might have been driven - sometimes extensively and furiously - by potential buyers.
Occasionally, some dealers may offer well-equipped event cars for sale at steep discounts. An example is the upcoming Singapore Airshow next month.
Expect BMW, its long-time limo supplier, to sell a show fleet of more than 300 cars, including the 3-series, 7-series and X3s, at discounts.
3. Even if the price is not negotiable, the freebies list is
Fret not if you cannot get that discount, you can ask for other things. It is expected of dealers to throw in things such as window films, reverse sensors and even service credits.
And as long as the accessory can be locally fitted, it does not hurt to ask. Non-automotive freebies include movie tickets or dining vouchers. Last year, Infiniti dealer Wearnes raised the bar when it launched a programme that gave customers the use of a yacht for their birthday.
4. Numbers do not tell you everything
Before the discounts and freebies distract you, you must pay attention to contract details and the fine print. Salesmen typically use a template to calculate the monthly instalments to show you that the car is affordable.
But the template does not tell you the full ownership cost, which includes maintenance, parking, fuel and even possibly rising insurance premiums.
An important element is the car's warranty. Warranty clauses give dealers leeway to void warranties. They can, for example, refuse to honour a claim if the car was not maintained by the dealership's workshop during the warranty period.
These tips aside, car buying is not an unrestrained mission to squeeze the dealer dry. Nobody likes being squeezed, unless maybe if he is Spongebob taking the MRT during rush hour.
So, ask the questions if you must, but be polite and considerate to the car salesmen, who are there to earn a living.
After all, good customers get good service.
http://news.asiaone.com/news
Flush with cash from year-end bonuses and with Chinese New Year around the corner, car buyers may make a beeline for showrooms.
But before you make that unrefundable deposit for a spanking new car, here are four things you should know that salesmen may not tell you - unless you ask.
1. That new car is not that new
When you buy a brand new car, all it means is that you are its first registered owner.
The car may not be that new in relation to its product life cycle, which typically spans six to eight years.
When a new car is launched, it is always branded as "all new".
This tends to reel in shoppers, because buying an "all new" car has obvious perks. It looks fresh and trendy a few years down the road, hence holding its resale value better.
While salesmen may use the "all new" chorus to draw you in, they may not voluntarily disclose that the car you desire will soon be replaced with a new model.
Examples include the Mercedes-Benz C-class and decade-old Volvo XC90 - they are due to be replaced this year and next, respectively.
I bought a new Volvo S40T4 in 2003. The model was replaced barely a year later. The car's resale value plunged by the time I sold it in 2006. Used car dealers said it was an "old model", which I suspected was just a ruse not to pay me a decent price.
But buying end-of-life models may not be all that bad, because dealers often lower prices to move the stock. Also, ask for the car's year of manufacture. Some less popular models might have been in the yard for a while before they reached the showroom.
2. The price is negotiable
Car dealerships mostly sell cars with packaged prices, which include the car's cost and the dealer's undisclosed margin.
While most companies will not budge on their guaranteed COE package prices - they bear the risk of COE price fluctuations after all - some are flexible enough to accept bookings slightly below the non-guaranteed COE package prices.
In these cases, the dealership will still bid for a COE for the customer, but it will lower their maximum bidding price by the corresponding amount of discount, which means lowering the chances of a successful COE bid. This is the risk that customers take.
But there are other ways to get discounts - if you are prepared to accept some trade-offs. Less fussy buyers can go for showroom or test-drive cars, both of which are less popular, given that they might have been driven - sometimes extensively and furiously - by potential buyers.
Occasionally, some dealers may offer well-equipped event cars for sale at steep discounts. An example is the upcoming Singapore Airshow next month.
Expect BMW, its long-time limo supplier, to sell a show fleet of more than 300 cars, including the 3-series, 7-series and X3s, at discounts.
3. Even if the price is not negotiable, the freebies list is
Fret not if you cannot get that discount, you can ask for other things. It is expected of dealers to throw in things such as window films, reverse sensors and even service credits.
And as long as the accessory can be locally fitted, it does not hurt to ask. Non-automotive freebies include movie tickets or dining vouchers. Last year, Infiniti dealer Wearnes raised the bar when it launched a programme that gave customers the use of a yacht for their birthday.
4. Numbers do not tell you everything
Before the discounts and freebies distract you, you must pay attention to contract details and the fine print. Salesmen typically use a template to calculate the monthly instalments to show you that the car is affordable.
But the template does not tell you the full ownership cost, which includes maintenance, parking, fuel and even possibly rising insurance premiums.
An important element is the car's warranty. Warranty clauses give dealers leeway to void warranties. They can, for example, refuse to honour a claim if the car was not maintained by the dealership's workshop during the warranty period.
These tips aside, car buying is not an unrestrained mission to squeeze the dealer dry. Nobody likes being squeezed, unless maybe if he is Spongebob taking the MRT during rush hour.
So, ask the questions if you must, but be polite and considerate to the car salesmen, who are there to earn a living.
After all, good customers get good service.
http://news.asiaone.com/news
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