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.
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