Car dealership myths, debunked

Is it always a bad idea to shop for used cars online? And are used car dealers out there, hiking up their prices on a whim? It’s time to reconsider some of those well-established car dealership myths and see how things might have changed – particularly in the digital era.

Myth #1: Dealers always mark up prices unfairly

We've all seen this stereotype in movies and TV shows: dealers slapping massive mark-ups on cars and deceiving customers into a sale, then rubbing their hands with glee as they carry their bags of cash to the bank. While there might be the odd price-hiker out there, online reviews pretty much guarantee that they’d be revealed quickly. The competition in the second-hand car market also helps to keep prices in check, as it’s never been easier to check out comparable car prices online.

Myth vs reality: The sheer amount of competition out there is good incentive for dealers to keep their profit percentage as low as possible. At Carma, we check the market every day to keep prices fair and competitive. We also make a point of including everything in the price, so everything is clear and upfront.

Myth #2: You should never trade in your car

We probably all have an uncle or cousin who swears by the private market and tells us to sell via an online marketplace to get more cash. And while you can sometimes get more with a private sale, you can also find your fair share of headaches. Super-keen messages that go nowhere; tyre-kickers that waste your time; straight-up weirdos who want to take your car for a spin first. Trading in, on the other hand, can be a straightforward and efficient way of doing things. These days it’s exceedingly easy to get a quote to trade in your car without feeling obligated to actually go through with it. What’s there to lose?

The reality: Sometimes, the uncomplicated option can be worth sacrificing a few dollars for – particularly when you factor in the time and hassle you could be saving yourself.

Myth #3: Financing a used car purchase through a dealership will land you a bad deal

Are there horror stories about manipulative used car finance? Oh, absolutely! But some modern used car dealers now have multiple sources for financing, meaning those lenders are actually competing to offer the best rate for a buyer. If you’ve ever used a comparison site for insurance, it’s a similar idea – you can see several options in one place and choose what suits. Plus, getting finance with the dealership cuts down on paperwork. Which in this day and age, is worth something too.

Myth vs reality: While it’s still good to shop around, and you can often choose to use an external lender, you might not want to dismiss dealer finance before even considering it. Case in point: Carma can find you quotes from four reputable lenders without even needing to choose a car. It takes just a few minutes to see what rates and conditions are on offer.

Myth #4: You should avoid buying cars online

Yep, the world wide web is where scams and fraud happen. It’s also where one in five retail purchases are now made in Australia. We buy tech, holidays and clothes online for great prices. So why not cars? Just like other products and services, buying online can mean slimmer price margins, because car dealers don’t need to pay for multiple shopfronts.

The digital era has made reliable online car buying entirely possible, and sometimes with transparency that can even exceed what you might expect with a car yard experience.

Myth vs reality: Today, you can find reputable online car dealerships that offer comprehensive logbook histories, detailed photos and a virtual showroom experience, so you can get a clear idea of the car in question. Carma also has its own mechanical A-team who checks over every vehicle in detail before it goes live.

Myth #5: You don’t get any coverage with second-hand cars

While warranties might vary by the dealership and car, you do have consumer guarantee rights when buying any used vehicle from a licensed dealer under Australian Consumer Law. If a car you buy doesn’t meet all of the following guarantees, you can ask the business for a remedy. The car must:

• be of acceptable quality
• be fit for any purpose disclosed before the sale
• match the description provided or the demonstration model, and
• come with title and undisturbed possession.

On top of your consumer rights, some dealers also offer warranties. Carma offers a 3-month warranty on every car, and you can also choose to take out extended coverage with 1, 3 or 5-year plans. In the first 7 days of owning your car, you can return it for a refund if it doesn’t float your boat for any reason. Plus, depending on your choice of vehicle, it may also have some manufacturer’s warranty remaining.

Myth vs reality: You can certainly get coverage on a second-hand car, depending on the car and dealer! Plus, any manufacturer warranties and consumer guarantee rights that apply.

Conclusion

Remember: reputable dealers want to see satisfied customers who’ll recommend them to friends, rather than having a fleece-and-release approach to selling cars. Like any big decision in life, it’s wise to approach any car transaction with some solid research and some common sense. Whether you buy a used car online or walk into a car yard, be sure to trust your gut and ask plenty of questions.

Legal footnote: We're absolutely here to help you find the right car, but when it comes to legal matters remember it’s best to speak with the experts in that field. You can find more about your consumer rights over at the ACCC website.