8/27/2013 3:45 PM ET|
5 sneaky car dealer sales tricks
Follow these road signs to steer clear of deceptive sales strategies.
The process of buying a new car can be a strain, both financially and mentally. Aside from a limited number of sellers, such as CarMax, dealerships that offer fixed prices on new cars are hard to come by. The industry is also rife with deceptive sales strategies that consumers need to be aware of to get the best price.
Problems with new-car dealers consistently rank near the top of the Better Business Bureau's list of consumer complaints. Many dealerships are staffed with salespeople trained to tack on as many unnecessary costs as possible, such as extended warranties that offer minimal coverage and add-ons (such as a GPS) that are already installed.
Worries about getting the right deal affect nearly all car shoppers -- cash-strapped consumers in the market for an economy car, families in search of a middle-of-the-road van, even those looking for a new sports car. People who don't do their homework before hitting the dealership are most susceptible to being taken in by deceptive sales practices.
Some sly sales tactics are more common than others, but that doesn't mean they're any less egregious. U.S. News & World Report spoke to industry experts for advice on how to recognize and avoid five of the biggest tricks:
The old 'bait-and-switch'
Because it's so effective, this type of hustle has been around for a long time. (It also takes place in real estate and other industries.) Buyers are often enticed by an advertisement for a certain vehicle, but when they arrive at the dealership, they're told the car is no longer available. It's important to remember that dealers' new-car inventories are usually quite large. So if a salesperson says the advertised car no longer exists -- that it was "just sold" -- that's usually a sign of a shady dealership, says Joe Wiesenfelder, the executive editor of cars.com, a vehicle sales and information website. He recommends contacting the seller to inquire about a particular vehicle before stepping foot on the lot.
'It's time for a new one'
Many times, the first words a prospective new-car buyer hears are: "What brings you in today?" Sure, it may sound friendly and innocent, but that's not always the case. Instead of simply asking what customers are looking for, salespeople are also hoping to find out what has happened to their current vehicle. If the owner lets on that the car has been damaged or is at the end of its life, the salesperson may try to pressure the person to make a purchase quickly. "Saying you just cracked up your only car and can't get to work the next day without one isn't going to work in your favor," Wiesenfelder says.
Consumers should keep in mind that there's always room to negotiate, and they should use it. Also worth noting: Car salespeople aren't mechanics, so don't take their word for what shape your car is in.
'Come on in and we'll talk'
The dealership may be down the street, but that doesn't mean you have to drive there to talk business. Gregg Fidan, the creator of the peer-to-peer car-buying resource RealCarTips.com, says buyers should negotiate the price by phone or email -- not at the dealership. "If you go to a dealership to negotiate, they have the upper hand," Fidan says. "You've taken the time to go there, which means you're in a controlled environment, in which they'll try to wear you down until you agree to their price."
Keep in mind that a salesperson's job is to close the deal as soon as possible, so don't be fooled by a claim that an offer is good that day only. "Technically, a dealer can sell any car at any price at any time, regardless of whether there's a 'tent sale' ongoing," Wiesenfelder says.
Prospective car buyers with poor credit are especially vulnerable to this trick. The dealer sells you a vehicle on the spot, before the financing is complete. Then a salesperson calls you a few days later to say your loan application has fallen through and that you have to come back in and sign up for a new loan at a higher interest rate.
To maneuver around this issue, you should get pre-approved for a loan by a credit union or bank before heading to the dealership, says Ronald Montoya, Edmunds.com's consumer advice editor. That way, you'll walk in knowing what you qualify for.
When you sit down with the dealer to calculate the costs, he or she may pull out a sheet of paper divided into fourths: one corner for the trade-in price for your car, one for the purchase price of the new car, one for the down payment, and the final quarter for the monthly payment. From there, the salesperson begins crunching numbers -- most likely making it too hard for you to follow.
Throughout the process, the salesperson tries to draw your attention to the monthly payment. If you're focused on that payment, you may get locked into a higher interest rate. "Don't lose sight of the other, more important aspects of the deal by fixating on the monthly payment," says Montoya, adding that it's easy to lose track of the final cost.
The bottom line: Arrive at the dealership armed with knowledge so you can hit the road knowing you've snagged a great offer.
More from U.S. News & World Report:
VIDEO ON MSN MONEY
The horrible sales people make it bad for the good ones. I recently went to a dealer and the sales person was overly persistent and immediately applied pressure to purchase a vehicle "now". I left and went to another dealership where the entire process was wonderful. Everything was fully disclosed, if I didn't understand a number it was explained in detail until I felt comfortable. Needless to say I purchased a vehicle and would recommend the dealer. You just have to look around. Sales people are like everyone else there are good ones and bad.
"Yo-Yo" financing is properly called a "Hot-Roll", and only disreputable dealers do it.
We often advertise a vehicle because it is a last-run rig, or an odd color/oprtion combination - so the price drops into holdback.. And guess what? PEOPLE BUY THOSE ADVERTISED VEHICLES! They actually exist, and they sell. It's not a bait and switch.
BUT, we ARE greeting customers to find out what their needs are, as you say, but its not pressure, its to see what your needs are . I cant tell you how many times a person comes in, knows exactly what he wants, won't listen to the salesman, buys it, then complains it won't do what he wanted it to. Salesmen are trained to FIND YOU THE RIGHT RIG, and when you let me do my job of probing your needs and wants, I'll hit it on the nose every time. My most-satisfied customers took my advice.
Finally, the four-square is just one way to put the numbers on paper for the customer. It's not my favorite so I don't use it, but there are several; ways to present the numbers. The point is, we have to show you the number SOMEHOW... And my dealership uses a CRM tool that gives us the option.
Dealers are trying VERY HARD to win back the customer's loyalty and trust, and t an extent, we have earned our reputation from the past. But todays customers are informed and we know that, we are consumers too, just like you. We all want a good deal, no matter what we buy. So take this article with a grain of salt; I'm certain there are dealers out there like this, but my experience says they are the backward dinosaurs in a changing market. Most dealers employ professionals, and their business practices are governed by regional reps and 20-Group audits. Odds are you will be treated fairly and professionaly at your next car lot visit. We aren,t monsters for goodness' sake. I have a wife, three kids, two car payments and a mortgage just like you, and I probably live right next door to you.
try buying furniture they make more money than car dealers, try Walmart. Get a life Yahoo and MSN
Try to buy a car over the phone and see how far it gets you.
The biggest issue you will find is the salesman gives you a price over the phone assuming you qualify for every rebate possible to get you in the door and then when you come in he says well you dont have the expiriing lease so thats $1,000 lost there, youre not trading in a 1999 or newer car so there is another $1,000, that price was without tax title plate transfer. You wanted the white diamond paint thats another $1,000 added to the cost because you didnt say you wanted the $1,000 paint job.
Plain and simple you just cant get the right price over the phone. Too many rebates, incentives, and tricks. Besides what proof do you have when you go in that price was what you talked about? If you have the price written down you have proof.
I have been a new car dealer for 40 years. I have not stayed in business by taking advantage of people. I take the long term view.....if you take care of the customer, your repeat business can only increase.
Let's also be fair...there are many "bad actors" in the car business who deceive customers. By the same token, I have come across many customers who "misrepresent" the terms that they have received from another dealer. Fairness is a mutual expectation.
Oh, I am sorry MSN. I didn't realize us "salespeople" weren't allowed to make a decent living. Go figure.
You forgot to add " Stay away from female salespeople as well, they are extra sneaky"
First of all, I will admit I sold cars a while ago. So, for me, I can proudly say, I never tried to trick a customer in any manner into buying a vehicle. Yes, some salespeople can be a bit smarmy, but that can be any in field. I thought it out a lot when I was going to purchase my vehicle. I went online, I visited dealerships, (when they were closed) I then went and test drove the two trucks I had my eye on. I called the dealership, made the purchase and had the salesman order my truck. Now the only problem I have of late is being chased by salesmen with the same stupid question, "You want to sale your truck?" When I'm trying to leave the dealership after being in for service. I was leaving and a salesman ran out and motioned me to stop. He placed both hands on my door and wanted to make a deal on a new truck. He was aggressive and annoying. I was approached again at another dealership when I went in for an oil change. At least he was non threatening. He complimented my vehicle and asked if I wanted to sell my truck, politely.... Because he stood away from my space and was courteous I responded with a nice no thank you. Now when I took my son looking for a vehicle, we were just looking.... A salesman ran out and I said, "No, just looking" this agitated and unprofessional man, blocked my driving away by reaching in to the car and putting his hand on my steering wheel. I put the car in park and had a conversation with him. Order online people, order on line! I found the salesmen more polite and helpful and you can view the cars in private.
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