Woman talking(l+r), Hands pointing to contract(c)

UfaBizPhoto/Shutterstock @usedcarbuyingwithmeg/Tiktok (Licensed)

‘Everything the finance managers don’t want you to know’: Car buyer details what not to say when you sit down to do financing

'People get ripped off at the dealership so bad.'

 

Braden Bjella

Trending

Posted on Jan 11, 2024   Updated on Jan 11, 2024, 7:25 am CST

Ever since the pandemic, car prices have skyrocketed. In February 2022, USA Today reported that “the average used car sold for $29,594 in January, up from $22,676 last year, a 30% increase,” and that “the average transaction price of a 9-year-old car rose 43% in a year.”

While the market shows some signs of returning to normal, car shoppers are still finding themselves confronting high prices at dealerships for new and used cars alike. As a result, some shoppers are considering financing their car purchases.

However, one TikTok user has now sparked discussion after noting a few things that customers should be aware of when buying a car.

In a clip with over 704,000 views, TikTok user Meg (@usedcarbuyingwithmeg) shares her do’s and don’ts for car financing. 

First, she warns that many services offered by the dealership can be purchased elsewhere for a lower rate not subject to the dealership’s interest rates. For example, gap insurance, she says, can be purchased from your insurer rather than the dealership.

For context, gap insurance is for “if your car is stolen or totaled, it will cover the difference (or “gap”) between your car’s actual value (not the amount you paid) and your outstanding lease or loan balance,” per U.S. News.

“You can usually just add this on to your insurance policy for a couple of dollars a month and you’re not paying interest on it,” Meg states.

Second, Meg notes that the dealership is “going to offer you…what’s called a vehicle service contract, which is basically just you pre-paying for your oil changes and tire rotations in the finance office.”

She advises not to do this, as it does not cover everything that your car may need and may not cover things like oil changes in the timespan in which you’d like them performed.

Instead, “find yourself a reputable independent repair shop and take it there for your oil changes. You will save money, they will be honest with you. You’re not going to get screwed over.”

Third, Meg says that extended warranty coverage will also be offered. Meg advises not to purchase this in the moment, as it can be bought later, while adding that some parts of the car, such as the tires, may already come with their own insurance policies that will allow for coverage without signing on to an extended warranty.

@usedcarbuyingwithmeg Dealership finance office secrets. Everything they don't want you to know about the finance office at the dealership. #saveonyournextcar #usedcardealer #carbuyingtips #usedcarbuying ♬ original sound – UsedcarbuyingwithMeg

In the comments section, users shared their thoughts on Meg’s advice.

“You’re offering a great service. people get ripped off at the dealership so bad,” wrote a user.

“I always get approved finance through my credit union before I go to the dealership,” advised another.

“Dealerships are full of it! I use to work at one recently in accounting! My integrity wouldn’t let me continue to do it,” stated a third.

The Daily Dot reached out to Meg via Instagram direct message.

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*First Published: Jan 11, 2024, 8:00 am CST