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
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- Car buyers stretching out payments
- Should you get a 7-year car loan?
Stacy Johnson? Obviously you know nothing about the Auto Industry. Would like to see you try working at a dealership. Its obviously your Degree in Journalism is a farce.
This is another outdated story. Some of the "tactics" mentioned in the story are as outdated as flip phones. When will people realize that everyone makes a profit; your barber, your dentist, your grocer, your internet provider, etc.
"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"-how long ago was that????
With the internet comes great resources for research, the consumer is no longer the "victim."
Move on, update your topics PLEASE!
I've worked in the accounting department in automotive since 2008, right in time for the huge crash. Yes, we make money off financing. A lot of the time its the only place we make money because there is hardly any to be made on new car sales. Check BBB, dont look at google reviews or anything like that, most people only write reviews when theyve had a bad experience. And those happen, EVERYWHERE. Just because 10 people have posted bad reviews doesnt mean its a bad place. What about the thousands of other people that are in and out of the store every day?
I also worked at a used car franchise for a little bit.. They were pretty stereotypical, very shady place.. But their reviews were good. So yes, do your research on the vehicle, your trade in, etc.
Go to a good place and you won't get screwed. But don't go in trying to make the dealership lose as much money as you can.. Work like that and there will be no one to supply you with transportation anymore.
Treat your salesmen with respect, and they'll do the same. If they still are too pushy or feel kinda sleezy, ask to speak with a manager or someone else. If all else fails, try somewhere else. We aren't all bad.
Your advise is out dated. every customer is provided their credit score at the time of sale. Your advice for undervalued trade-in, does not list any of the current sites that will buy your trade. Not one of the sites you listed for "help" will write you a check for your trade. So please take the time to research a topic before you write about it. Or find a job your qualified for.
Major sized dealerships,you know the ones with multiple franchises are the best at fleecing the consumer. A friend working for one of these said it was required to go early Saturday morning once a month with all the franchises present. They gave major cash prizes to the finance department of the month for the highest number of loans at the highest rates ! 10 to 15 grand was not unusual to the winning group ! Basically the sales people have the job of making you feel you got a good deal and then everything changes when you are sent into finance. If you see purple shirts with white collars and expensive bling watches on them, sit back and watch the show, first ,it's your credit not high enough to get the rate and you must puchase extended warranties, no we will finance you better, don't come in with a check from your own credit union or bank, lets write a policy to protect your loan to be paid if you fall off a ladder and die !
Basically the goal is to never let you buy it for what was shown and agreed to with the sales person. For you, get the invoice for the exact car, shop that exact car and do everything to get it at that price have your own finance setup so you absolutely know they can't do you in finance and refuse every cherry they try throwing at you. And never ever show happiness or emotion about the car selection you made and always be ready to walk and tell them sorry i'm going to shop elsewhere next week. One last idea, shopping on the last day of the month is fun as the dealership is trying to "PAPER" as many buyers that day to meet their goals for that month and you just might find them flying around trying to get your deal done.
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