Common car dealer tricks
Do your research, and remember you're dealing with expert negotiators.
This post comes from J.D. Roth at partner blog Get Rich Slowly.
When I bought my used Mini Cooper in April, things didn't go exactly as I'd planned. Part of this was because I hadn't done enough research. But a lot of it was because the dealership had some tricks up its sleeve and I did not.
- Juggling the foursquare. The "foursquare" is the worksheet on which the salesperson jots down the terms of the deal. It's an easy way for her to manipulate one factor (purchase price, down payment, monthly payments, trade-in value) or another.
- Profiting from rebates. Gall warns that salespeople often use the presence of a rebate to manipulate buyer psychology. Don't let that happen to you.
- Inflating payments. The more you're willing to pay each month, the more room the salesperson has to work with. The article recommends ignoring the question of monthly payments until you've negotiated the price of the vehicle.
- Fees and extras. "If it's anything he offers after you've negotiated your sales price, you don't need it and shouldn't pay for it."
- Interest-rate bumping. Gall recommends shopping for your own financing before you shop for a vehicle. He also warns that "it is not uncommon for the dealership to secure financing for you at one APR but offer you a rate one percentage point higher -- and then pocket the difference." Be careful.
- Altering the bill of sale. Some dealers will leave the contract open-ended. Don't allow this. Don't sign anything with blanks or undefined terms. Be sure the paperwork is complete before you leave the lot.
Gall says there are several other tricks that dealers use, though these are especially underhanded. "If a dealership pulls any of these stunts on you, it doesn't deserve your business," he writes.
- Ransoming your check.
- Lying about your credit score.
- Misplacing trade-in keys.
Remember: These folks play this game for a living. Even if you go into a deal armed with good information and knowledge of dealer tricks, you can still be manipulated. You're an amateur negotiator, and you're playing with professionals.
The dealer trick that got me isn't on Gall's list. When I went to
look at my Mini Cooper, I was greeted by a young man who'd been on the
job for only two weeks. After I test drove
the car, we sat down to negotiate. I talked him down from $17,000 to
$15,000 and was very pleased with myself. But then he fetched the
"closer," whose sole task was to talk me up from that $15,000 number. I
had essentially told the dealer how much I was willing to pay, and the closer was there to get me to pay more. And I did. I paid $15,600.
The young salesman did a follow-up call a week after I bought the
car. He was doing a survey to ask me about my experience. I told him it
was fine except that I didn't like dealing with the closer. I felt like
I had been manipulated by him.
"Yeah," he said. "You shouldn't listen to him. He talks a lot, but he's full of (it). He wants to sell that car. You had more power in that situation than you think."
Related reading at Get Rich Slowly:
Copyright © 2014 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
Homeowners associations ban them and environmentalists love them. All that aside, though, a clothesline saves you money.
VIDEO ON MSN MONEY
BLOGS WE LIKE
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'