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.
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Never buy a used car from a Dealer... Individuals... they are easier to read and its cheaper,but always do research to make sure the Car was built right and has a History of reliability and low Maintance costs (very important)..and crash tests.....Carfax it if it passes and its clean .....your done... that simple
Remember one thing, not all dealers are crooks! This is a retail business and dealers are entitled to make money!
What is the mark up on a gallon of milf or gas? Dealers make less than 5% on a new car!!!!!
I know. Go buy your own dealership and show those SOBs how to run a car dealeship. That would show 'em.
Never ... and I mean NEVER think you know or found out what a dealer paid for a new car.
They dont pay for them per say ... up front.
Also ... if yoru dumb enough to think a company stays in business by making $200 on a 32,000 dollar car ... then you deserve to get screwed
I just reread this again and I still find this article incredibly stupid.
Somebody should not go buy a car ever again... ride the bus
The first new car I bought was about 40 years ago and the dealer sold me under coating and glazing for $1200. Sounded like good protection until later when I found out the glazing was a wax job and under coating was a couple of $1.99 a can spray sealer underneath. So for something worth $30 I paid $1200. On another occasion the dealer bragged he could get me 9% interest on financing. When I informed him I was pre approved from Allstate for 6% he went back through the numbers and got me a 4.95% rate. For those defending dealers you either own or work for one as I've bought 8 new cars and in almost every case the dealer tried padding my sale with thousands of dollars in add ons. This author is spot on.
I found this article to be true and to the point. No, not all dealers are rip off artists, but anyone will take advantage of a dupe. She is exactly correct on every point she makes. If you are forewarned, you know if you're trying to be tricked or if the dealer is be straight with you. She is correct when she says they want to talk payment, not cost. When we bought our new camry, we already had a loan offer from our bank, so when the dealer said they could give us 1/2% interest rate better, we knew they were being square. They weren't trying to trick us, but also we KNEW they weren't trying to trick us. (TMCC, toyota motor credit corp). They did have us take a test drive to get our buying expectations up, but they also told us this is what they were doing. We knew what we wanted and told them what we wanted to pay (you're too close to the mark be out for the first time, but we had been looking at Camrys for two years, and were ready to buy and knew what they were worth and what we wanted... they actually had come down about $1000 from the year before similarly equipped.) When we bought our van (toyota, of course) 5 years later, the salesman just threw us the keys and let us drive it for a week cuz he knew we were down to one vehicle, so we could go out and compare it with other vans.
Anyway, anyone who has bought 2 or more new vehicles know what to look for... this article is aimed at first time buyers so they also don't have to go through the mistakes and gain the experience the hard way. Very good article. Used car salesmen will go to a special place in Hell, and I give them 3 strikes and they are out... buyer beware!
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