5 Questions to Ask at the Dealership

Find out what you need to ask the dealer when looking to buy a car from a dealership.
Last updated on March 1st, 2024
  Written by 
Adrian Edlington
Adrian Edlington is PR & Communications Manager at Savvy. With a keen interest in personal finance, car loans, the mortgage industry, cost of living pressures, electric vehicles and renewable technology, Adrian's research includes conducting primary data surveys and analysis of up-to-the-minute secondary Australian data sources. His work on behalf of Savvy has been featured on ABC.net.au The Conversation, the Sydney Morning Herald, AFR, News.com.au, The Age, Herald Sun, Adelaide Now, SBS On The Money, 7News, Car Expert, Which Car, Drive.com.au and more. In his spare time, Adrian enjoys mountain biking and business podcasts.
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   Reviewed by 
Bill Tsouvalas


Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
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Stepping onto a car dealership lot can feel like navigating a maze. The array of vehicles, sales pitches and financing options can overwhelm even the most seasoned buyer. When purchasing a car from a dealership, it's therefore crucial to ask the right questions to ensure you're making a well-informed decision. In this blog, we explore five important questions to ask a car dealer.

1. What are the out-the-door costs?

The advertised price is just the beginning. Don't be surprised by hidden fees that inflate the final cost. Ask the salesperson to break down the out-the-door price, which includes:

  • Vehicle price: this is the base price of the car.
  • Destination and delivery fees: these cover transporting the car from the factory to the dealership.
  • Taxes: sales tax varies by location, so factor this in.
  • Registration and licensing fees: These vary by state and are mandatory for driving the car legally.
  • Dealer fees: These can include administrative fees, documentation fees and any pre-installed add-ons.

Tip: Get everything in writing. Ask for a detailed breakdown of all fees before signing any paperwork, and read the fine print to avoid any surprises down the line.

2. What are my financing options?

Unless you're paying in cash, you'll need a car loan. Don't confine yourself solely to the dealership's options. Go beyond a car dealer loan and shop around for competitive rates from banks and online lenders before visiting the dealership. This empowers you to negotiate a better interest rate with the dealer's financing options.

Here are some key questions to ask:

  • What is the interest rate? The interest rate significantly impacts your total loan cost. Aim for the lowest rate possible.
  • What is the loan term? A longer term means lower monthly payments but higher overall interest costs. Choose a term that fits your budget and repayment goals.
  • What are the down payment requirements? A larger down payment reduces the loan amount and potentially qualifies you for a lower interest rate.
  • Will there be a balloon payment? A balloon payment is a large lump-sum payment due at the end of your car loan term. While this can mean significantly lower monthly payments, it's crucial to have a plan for how you will pay the balloon payment at the end of the loan term. 

3. How long is the warranty and what does it cover?

Knowing the warranty details is crucial for your car ownership experience. Here's what to ask the dealer:

  • Warranty length: this refers to the duration of time you're covered for repairs due to manufacturer defects. It's usually expressed in years or mileage, whichever comes first. Knowing the length helps you assess how long you'll have financial protection for potential repairs.
  • Warranty coverage: this specifies what kind of repairs are covered under the warranty. Some warranties might cover comprehensive repairs (bumper-to-bumper), while others might be limited to specific components like the powertrain (engine, transmission, drivetrain). Understanding the coverage ensures you know what expenses the warranty will and won't cover.
  • Additional warranties: the dealer might offer extended warranties that go beyond the manufacturer's warranty. It's crucial to understand their cost, coverage details, and whether they align with your needs and budget. Compare the offered extended warranty with options from other providers before making a decision.

4. Can I see the logbook and service records?

If you are buying a used car from a dealer, the logbook and service records provide valuable information about the car's past maintenance, allowing you to:

  • Verify service history: ensure the car has been regularly serviced according to the manufacturer's recommended schedule, indicating responsible ownership and potentially fewer future issues.
  • Identify potential concerns: look for any recurring repairs or component replacements that might suggest ongoing problems with the car.
  • Assess future maintenance needs: gain insights into past service costs and potential upcoming maintenance based on the car's age and mileage.

Dealers are legally required to disclose any major repairs to the car as well as its accident history. Don't hesitate to ask if they have any additional service records or information available beyond the logbook.

5. Is this your best offer?

Don't be afraid to bargain with the car dealer. While dealerships have a profit margin, they also have room for compromise. Research the car's fair market value, which gives you a strong starting point for negotiation.

You should:

  • Be polite but firm. State your desired price and explain your reasoning based on your research.
  • Be prepared to walk away. Remember, you are in control. If the dealership doesn't meet your expectations, don't be afraid to thank them for their time and look elsewhere.

Other important considerations when buying from a dealership

Asking the right questions is crucial, but there are additional points to consider when buying from a dealership:

  • Car history: before buying a used car, it's crucial to understand its history. While dealerships are required to disclose major accidents, you can go one step further with a history report. In Australia, you can get a PPSR report, which provides critical information like outstanding finance, stolen status and written-off status, or get a comprehensive car history report for even deeper insights, including details like odometer discrepancies, past accidents, service history, and ownership details. These reports help ensure transparency and protect you from purchasing a car with hidden issues, offering peace of mind for your investment.
  • Pre-purchase inspection: arrange for a pre-purchase inspection by a licensed mechanic or inspection service before finalising the purchase. This involves a detailed examination of the vehicle's mechanical, structural and safety aspects, ensuring it is safe to drive and complies with Australian standards. By investing in a pre-purchase inspection, you can identify any existing problems and make an informed decision about the vehicle's condition.
  • Impact of credit score: your credit score influences your ability to secure financing for the vehicle purchase in Australia. Before approaching lenders or dealerships for financing, check your credit score through agencies like Equifax or Experian. Maintaining a good credit score improves your chances of qualifying for competitive interest rates and favourable loan terms, ultimately saving you money over the loan term.
  • Returns and exchanges: understand the dealership's policies regarding returns and exchanges in Australia. While consumer laws provide protections against faulty or misrepresented goods, the specific policies may vary between dealerships. Clarify the terms and conditions for returns or exchanges, including any cooling-off periods or restocking fees, to ensure you're aware of your rights and options in case of dissatisfaction with the purchased vehicle.

Navigating the complexities of a car dealership can be challenging. However, by asking the right questions and considering key factors, you can make a well-informed decision when purchasing a vehicle. If you want to explore your car finance options, turn to Savvy. Our team of experts can help you compare loans from a range of lenders to find one that suits your needs and budget. Get started today.

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This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.

The content on our website is produced by experts in the field of finance and reviewed as part of our editorial guidelines. We endeavour to keep all information across our site updated with accurate information.

Approval for car loans is always subject to our lender’s terms, conditions and qualification criteria. Lenders will undertake a credit check in line with responsible lending obligations to help determine whether you’re in a position to take on the loan you’re applying for.

The interest rate, comparison rate, fees and monthly repayments will depend on factors specific to your profile, such as your financial situation, as well others, such as the loan’s size and your chosen repayment term. Costs such as broker fees, redraw fees or early repayment fees, and cost savings such as fee waivers, aren’t included in the comparison rate but may influence the cost of the loan. Different terms, fees or other loan amounts may result in a different comparison rate.

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