Smart SpendingSmart Spending

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.

By Stacy Johnson Dec 27, 2012 4:54PM

This post comes from Angela Colley at partner site Money Talks News.


Money Talks News logoThe 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. 

Here are some tips you can use to avoid becoming the victim of common dealer tricks of the trade:
1. Payments

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. 


Image: Car salesman showing couple new silver hatchback in car showroom © Juice Images, Cultura, Getty Images2. Loans 

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.


6. Undervalued trade-in

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 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.


You can get your credit scores for a fee at the websites of Equifax, Experian and TransUnion or from myFICO. If you find that your scores are low, improve them before you apply for a loan.


9. Negotiations

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



Dec 29, 2012 4:41PM

Most of this article and most people's opinions on car buying stem from the way it was 20 years ago.  Every consumer can now search the internet to find out what they should pay for a car, what they can expect for their trade, and what kind of rates are being offered.  For some reason, the automobile industry is the only one where consumers consider dealer profit to be some sort of evil.  When most purchase a house, they don't do research to see how much profit the builder is making or how much the loan officer makes on their mortgage.  Even worse, try shopping for a diamond where the markup percentage is in the thousands!  Anyone can get a good deal by doing a little bit of research and don't be surprised if the dealer feels the need to make enough money to pay the operating costs and make a profit like any other business.

Dec 29, 2012 3:31PM
Get a price from Get prices from these dealers that participate and make them work against each other to get the best price and find out also, the paperwork costs. Take the best deal. Don't pay for any dealer add ons on a new car. You'll get the best deal if you can pay cash. Nobody should pay sticker or above sticker on popular models.
Dec 29, 2012 12:54PM

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

Dec 29, 2012 8:01AM
It is not just a coincidence that auto finance and mortgage brokers were the first to be exempt from Dodd Frank. I have worked in both industries and can tell you deception is the NORM.
Dec 29, 2012 3:21AM
All dealers are rip offs or they wouldn't be in business! They all work together to make sure they don't break that 'honor code'. I know exactly where this guy is coming from. I secured a car loan with the dealership but I had to leave before I actually purchased the car (My daughter's recital). I told them I would be back the next day to go over the purchase price and other details, but he swore up and down that the loan was only good for 24 hours or less. Plus he swore up and down that 20 other people were interested in this car. He asked for a $1000 deposit to hold it and I was dumb enough to give it to him. Now granted, I purchased the car but I still felt pressured and lied to. They'll go ahead and add all of those protections to the contract even if you didn't request them. This is to make you feel guilty for asking them to take it off (like it is suppose to inconvenience them). They want you to feel like they're doing you a favor. Lastly, he kept talking about how nice of a car it was so I couldn't focus on the paperwork in front of me. I told him that I wouldn't have purchased it if I didn't think it was nice. LOL! Car dealerships and salesman are becoming more creative so stand your ground and set yourself a budget and don't budge!
Dec 29, 2012 2:03AM
We compare prices when purchasing our new autos. We are very partial to Ford and Lincoln. We live in Metropolitan Phoenix and there are many Ford and Lincoln dealers. We always end up at Sanderson Ford/Lincoln. Presently we have an MKZ, Grand Marquis, Edge and Fiesta. They have been in business since 1955. They have new and used vehicles, parts, service, body shop, 50's diner ( really, a real diner) and after market shop. The general manager just made his 50th anniversary at the dealership. Amoung their many attributes they post in all the salespersons office windows the years with Sanderson. The years range from 35 down to a new hire. The new hire usually replaces a retiree. We have all our maintenance done there. Point here is cars cost money, do your homework, buy from a respected dealer, service your car and the end result will be many years of driving pleasure.
Dec 29, 2012 2:00AM
also,   agree on a price for the new car before discussing your possible trade vehicle
Dec 29, 2012 1:45AM
well do people know that some car deals when we make them a GREAT deal the sales person only gets $100 for it commisson and we spend hours and hours with them and if we dont sell any cars we get $8.00 an hour so to make a living we have to spend everyday at work, 12 hours a day so no home time and fun just sitting listening to people whine and complain that we are rip off's screw you.
Dec 28, 2012 11:54PM
Dec 28, 2012 11:42PM
Amazing how much the media controls! You try working 40-50  hours a week without a pay check! How many of you can do that?????????
Dec 28, 2012 11:36PM
Also keep in mind. nobody is holding a gun to your head to buy a car!!!
Dec 28, 2012 11:34PM

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!!!!!

Dec 28, 2012 11:28PM
There must be a special little section of Hell set aside for crooked car salesmen or sales women and people who rip off senior citizens. Just gotta be. Both are scum of the earth.
Dec 28, 2012 11:15PM
Both the article AND "I sell cars" have good points... buying things like "rustproofing" and 'Zeibart" from the dealer can be a bad idea, like the article said. And "i sell cars" is right; it's a pretty tough business selling cars now. But dealers brought that upon themsleves by being so secretive, lying to customers, and taking advantage of people once they enter the finance office. I know; I used to be a top F&I guy and I routinely "hammered" customers who failed to do at least a little homework. And again "i sell cars" is right; it's the customer who haggles over 100.00 that hates you the most; the customer who comes in, pays a fair price, accepts a decent amount for his trade is always the one that walks away happier. But again, as dealers, we've taught a lot of them to gird their loins for battle when buying a car. Customers; be smart. Talk to your bank first. Let them know what you're interested in possibly buying, and get pre-approved for a loan. Odds are your dealer will do business with that bank anyway and will simply match the rate if you let them know what it was. And be REASONABLE; selling your old car yourself IS the best way to get the most for it, but it's a HUGE hassle. You'll be stunned at the number of idiots who will call/come by to try and get your car for WAY less than it's worth. Look up it's TRADE value, understand that the dealer is going to offer you NO MORE THAN THE MIDDLE NUMBER REGARDLESS OF THE CONDITION YOU THINK IT'S IN, and decide if that's worth it to you to avoid the hassle of selling yourself. And yes, if you do trade, THE DEALER WILL MAKE MONEY ON THE CAR HE SELLS YOU AND YOUR CAR WHEN HE SELLS IT. So what? That's what they are there for; to make money, provide jobs, AND MOST DEALER PRINCIPALS (the owners) ARE DECENT PEOPLE WHO GIVE A LOT BACK TO THE COMMUNITY. Don't be an **** and begrudge them a profit. Buying a new car? Ask to see the invoice and pay no more than about 750-1000 over that price depending upon the SIZE of the car; i.e. subcompact cars have almost no profit; trucks and SUV's have a BUNCH. SO be reasonable. Believe me; you treat a dealer fairly, buy cars from them consistently for a fair price, accept a fair amount for your trade and you'll be surprised how well they'll treat YOU at the time you need that treatment the most. Warranties? Buy the one with the manufacturers name on it and pay no more than about 1500 for a car and about 2200 if it's an SUV/Truck with 4wd (new cars). Ask to see the cars invoice. Match the vin number to the invoice, then offer a fair amount above that number. You'll be surprised how well that works. AND NEVER DISCUSS PAYMENTS. ALWAYS PRICE. If the insist on the "four square" payment system and won't get away from it, walk away. They couldn't care less about anything other than the deal.
Dec 28, 2012 9:47PM

I know.  Go buy your own dealership and show those SOBs how to run a car dealeship.  That would show 'em. 

Dec 28, 2012 9:44PM

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

Dec 28, 2012 9:39PM

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

Dec 28, 2012 9:25PM
Everyone in NOT going to satisfy everyone all of the time.  You can look at ANY industry and find that someone is upset about something.  Some people were upset that they had to work on Black Friday, some people were upset that the had to work on Christmas, some people were upset that they pay too much for a car, some people were upset that they are not a billionaire, and so on and so on.  If you do your research before you purchase something, you might have a better understanding of what you are paying for.  If you feel that you are getting ripped off, then shop some place else.  There are some honest people out there that will treat you right.  Some businesses (that are honest) what the repeat customers.  You just have to find the ones that you can trust.  Word to the wise, shop around before you buy and look at all of the options before you buy.  In other words, so do your homework first and hopefully you will know what to expect before you sign your name on the dotted line.
Dec 28, 2012 9:24PM
My question is has the idiot writer of this ever been in the car business????   I think I will write an article on brain surgery.  Make sure you listen to every word even though I am not a brain surgeon.  Trust me you will be fine.  Here's what she is telling you. 1. spend hours working on the price only to find that the payment is $100 more than you can afford and then leave without buying a car (seams like a good use of time) 2. Go to your bank because they make money on your loan too.  Then go back to the dealership to actually buy the car (or you can just finish it in one trip). 3. If you don't want the car in the ad and buy something else it isn't bait and switch it's you bought a car you wanted, not one you didn't. 4. STOP you are just being dumb now. 5. All the ad ons protect YOU not the dealership.  Want to pay for your own repairs and tires and wheels( way more over 5 years than the protection costs) GO AHEAD! 6. Your trade is worth what it is worth.  Looking it up in a book doesn't mean that is what a dealership will pay for it.  Go ahead put it on line and have a bunch of strangers come to your house that can't afford it, can't get a loan for it, or just want to drive it.  Thant makes way more sense. 7. MSRP is "suggested by the manufacturer not the dealer. 8. It's YOUR score, if it is bad, it's because you have credit problems, if it's good YOU controlled that to. Stop blaming it on the dealer. 9. Yes there are 3 parts of the deal, how many parts are there when you buy a house?????  So what make your deal and move on. 10. Yes go pay someone a couple hundred dollars to check what the dealership just did.  Then go back and fight with them over floor mats.  Makes perfect sense.  Or you could just ask to see the dealerships inspection paperwork.  They have it if you ask for it.  In closing there are good and bad in every profession.  To say that all dealers use "tricks" would be like saying that all writers are dumb, terns out that just the one that wrote this article is.
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
100 character limit
Are you sure you want to delete this comment?


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.


Smart Spending brings you the best money-saving tips from MSN Money and the rest of the Web. Join the conversation on Facebook and follow us on Twitter.