10 sneaky car dealer tricks
Here are some tricks of the trade -- some more devious than others -- that you might encounter when you shop for a car.
This post comes from Angela Colley at partner site Money Talks News.
The first time I bought a car, I got ripped off. I traded in my car for less than it was worth, bought a clunker for more than I should have, and got talked into a $950 warranty to cover rust as I was finalizing the paperwork.
The salesman saw me coming and pulled out every trick in the book -- from saying my credit wasn't good enough to tacking on "mandatory charges" during the final sale.
Dealers want to talk payments; you need to talk price. For example, the last dealer I met asked me how much I could afford to pay a month. When I didn't answer, he offered a "great deal" at $385 a month. He never mentioned the total price of the car or the length of the loan.
By focusing on payments and not price, it's easy to trick consumer into thinking they're getting good deals. Steer the conversation to the total price, and let the payments take care of themselves.
A dealership can make as much money on the loan as it can on the car, which is something it's not likely to disclose. Instead, the salesman will make it seem that he's doing you a favor by getting you a great interest rate -- or getting you a loan at all.
Don't fall for it. Financing is big business for dealers, and you're not winning a prize when they get you a loan.
Step One in any purchase that requires a loan is to secure financing. Never head to the lot without first shopping for -- and getting preapproved for -- a loan. Use online auto rate searches and talk to banks and credit unions to find the best rate. Then apply and get approved. This serves two functions: You won't overpay for dealer financing, and you'll be ready to pull the trigger when you find the perfect ride.
3. Bait-and-switch advertising
Bait-and-switch gets you in the door by advertising a super deal on a car, but switching you to another, lesser deal when you show up.
Read the fine print before you go to the dealership. If you're not sure, call ahead.
4. High-pressure tactics
The salesman's goal is to close the sale today, and he'll try any number of sales tactics to make it happen. My personal favorite: Insisting the car won't be there tomorrow.
Don't bite. If you feel uncomfortable or unsure of any decision, ask to speak to someone else or just walk away. Keep looking until you find someone you can work with.
5. Extras that add up
Car salesmen work on commission, and the more you pay, the more they make. One way to increase the sale price is by adding on extras, like wheel and tire protection, a warranty extension or rust protection. To help sell you on these, the salesman will break them down to the total price per month. For example, when I bought rust protection, the dealer told me it was a "great service for only $25 a month." I ended up paying $900 over three years for something I didn't understand or even know how to use.
If you're trading in your current car, know its value. These sites can help:
Also, check eBay to see what cars like yours are selling for in your area.
If you're trading in, don't expect any dealer to offer your car's retail value. To get maximum value for your car, sell it yourself.
7. Manufacturer's suggested price
The "manufacturer's suggested price" is often used to make a deal sound better. For example, if the manufacturer's suggested price is $35,000, but the dealer is asking only $32,000, you might think, "Hey! I'm already getting $3,000 off and we haven't even started negotiating."
Sites like KBB.com can tell you what people are actually paying for specific models.
8. Your credit score
When I was buying my first car, the dealer pulled my credit report and told me my credit wasn't that grea,t but that he'd be willing to work with me. I felt a sense of relief, thinking, "At least I'm getting a loan." I later found that my scores were fine and that I could have gotten a better interest rate elsewhere.
Buying a car isn't one big transaction; it is actually three smaller ones: getting financing, pricing the trade-in and buying the car. I didn't realize this when I went to the dealership alone for the first time. Rather than look at each piece, I looked at the total cost and thought, "OK, I can afford this."
Negotiate each part separately to get the best deal.
10. Mechanical issues
Don't take the dealer's word for the condition of a used car. Never buy any car from any source without first taking it to an independent mechanic for an unbiased inspection.
More from Money Talks News and MSN Money
- Tricks of the trade: Restaurants
- 7 simple steps to winterize your car
- Tricks of the trade: Credit cards
- Smart Spending on the go: Get our app for Android or iPhone
- Car buyers stretching out payments
- Should you get a 7-year car loan?
OMG - yet another out dated thieving dealership story. Believe it or not, it's not the dealership that makes car buying a hassle, it's the consumer. They read these goofy stories from goofy people like this writer, and go into a dealership with a chip on their shoulder. Those who go through life always expecting to be ripped offf, will be, just ask them.
The internet has leveled the playing field for both dealer and consumer.
I'm a car sales person, and this video actually offended me. I haven't done any of these things and none of my customers have ever felt pressured from me. I think the way you're going about things is all wrong with your videos. I don't appreciate you talking down on car sales people. It's a hard business from this end, trust me, I've had people be nasty to me for no reason. Once you've been on the other side, then you can start voicing your opinion.
My wife and I had gone to a local dealership year's ago (the dealership is no longer in business), and had a price range in mind, and a car mileage in mind. We had already been to other dealerships and had found cars in our price and mileage range. We told the salesman at this dealership what we had in mind, and he was showing us cars either outside our price range or our mileage range, or both. He said to us "Why limit yourself when you can finance!", and we told him that our price range was all we could finance. We then asked him if he had any cars that met our price/mileage range, and he ended up telling us that we weren't going to find any cars that met both ranges, and we told him that we had found cars that met both ranges at other dealerships. His response was, "Well, then, what are you doing here?" Talk about an a**hole." We pretty much left that dealership right after that, but not before complaining about the salesman to the manager, who said that we must have misunderstood what the salesman had said. There was no misunderstanding that. We never went back to that dealership, and told everyone we knew to stay away from that dealership.
This whole article is a crock..... I work at a dealership and nothing like this goes on here. We ask what "payment" works because people come in with unrealistic ideas that they can get a $60,000 vehicle for $500/month with $2000 down. I didn't invent math and it doesn't take a genius to multiply $500 x 60 months and add $2000. It doesn't add up to $60,000, does it? A warranty is just like health insurance, you might never use it, but it's there when you need it. Buy it or don't. I'm not the one that has to pay the bill when something goes wrong with your car. Your trade? It's not worth what you think it is... oh by the way, KBB doesn't buy trades. So their numbers make you think that your hooptie is worth money when it's not. If KBB says it's worth $6000, then it's actually worth $3500. Just try to find someone who's going to pay $6000 for your car. Oh and make sure that when it breaks down on them, they can come back to YOU to have it fixed. Your Credit??? Don't blame me.... Your credit score is a 604 because you don't PAY YOUR BILLS. I can't make up your credit score. We run it through Experian, Equifax and Trans Union. THEY tell US what your score is. It also tells us that you don't like paying your bills on time. Or ever for that matter. So when you get a rate of 12% it's because your a roach and your credit sucks. Commission? Yes, we work on commission. We get a whopping 18% of the total profit. So if there is a $1000 profit on the vehicle after you grind me to the bone for an extra $10, $20, $100, I make a staggering $180 minus taxes. WOW.... Where can I spend it all???? Bait & switch? If you come in on an advertised vehicle for $199/month, don't expect to get the fully loaded luxury vehicle of your choice. It's the cheapest vehicle on the lot. Buy it. We don't care. Just don't complain when it doesn't have all of the bells & whistles that you want. WE don't switch you, you switch yourself off of the cheap car and blame us when your payment goes up by $100 because you want Nav, heated seats, leather, sunroof, bluetooth... Seriously, come on..... Oh, one more thing. If you leave because you want to think about it. Don't count on the car being there the next day. You're not the ONLY one in the city that's out shopping for a vehicle. I've watched many people leave, only to come back the next day and see that the vehicle is gone. Yes, it happens. Get over it, make a decision and go home. Believe me when I tell you, you will lose your dream car. I'm tired of people writing these articles that trash car sales. How much profit is in that 42" flat screen that you just bought for $1500? Probably $1300. But when was the last time you went into Best Buy and asked for an invoice? What's the invoice price on that new iPhone that you paid $699??? Did you get a deal on that? Probably not. Car salesmen are out to make a living, just like the next guy. If you are going to try to grind them to the bone on $10, $20, $50.... maybe you are shopping out of your league. If you can't afford $880/month, but your maximum is $850, you need to go home. I currently sell over 30 vehicles per month. I make a nice living. I'm certainly not rich, but I'm doing fine. I also don't put up with mooches that come in and follow the rules in this article. I don't have time for that. Try it. See how fast they kick you out of the dealership. Happy shopping!!
Copyright © 2013 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
ABOUT SMART SPENDING
LATEST BLOG POSTS
An annual cap on flexible spending accounts is increasing medical costs.