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 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.

 

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

 

 

418Comments
Feb 4, 2013 10:40PM
avatar
You paid $25.00 a month for rust protection? C'mon man!
Feb 4, 2013 10:32PM
avatar
What a bunch of BS in regard to interest rates. Shop your local rates  {with application} , And I will beat or equal at the dealership I work at.
Feb 4, 2013 9:03PM
avatar
It's actually pretty poor negotiating advice. 
But yes, you should do your homework before you go and if you aren't feeling 100% about the deal, leave and do more research. Don't give in to pressure.
Feb 4, 2013 8:22PM
avatar
There is only one way to resolve this issue.  Go to work as a salesperson at ANY dealership, ANYwhere, for at least six months and all will be revealed. You won't believe how things are!!! You have NO clue what you're talking about unless you do this. The least you will get out of the experience is a better respect for the business.  Otherwise,  GOOD LUCK and KEEP SPINNING YOUR WHEELS!!!! 
Feb 4, 2013 8:15PM
avatar
well with close to 40 years selling cars I can tell you this guy must be trying to get your money too.  Yes we do work on commission and that, on  a new car isn't near what people think.  usually anywhere from $35 to $150 per car.  A new car sale may take weeks to close because of the customer's indecisiveness.  The bank is the one making the money on in the car deal for the most part.  Yes there is a lot of money to be made on interest but Dealers are capped on how much the can bump the rate and it is also very competitive.  You think all those adds for rates come from the dealer?  Where dealers make their money is on volume bonuses from the manufacturer, that is why they will often take a deal for less then what they will realistically pay for a vehicle know if they sell enough they will get money from the manufacturer. As for warranties, yes they are expensive but so is any other insurance and that is what it is. But, the warranties the dealer sell are usually manufacturer based and far better then anything you can buy on your own.  Same with the GAP insurance.
Feb 4, 2013 8:11PM
avatar

1.I never buy A new car.Maybe A demo.

2.I never get A loan,I always pay cash

 3.Ya can go to consumer reports and they'll tell ya what ya should pay.

Feb 4, 2013 6:49PM
avatar

No one can expect to get average retail money for their trade-in......your junker has an ACV (actual cash value) and no dealer can put much more than that (in real dollars) in it. Keep in mind, recon costs to get your vehicle retail ready, and it may sit on the lot for 100 days before anyone besides the lot attendant cracks the door open. The business mgr. (finance person) makes a commission on financing, NOT the salesperson. If you have great credit, you will get the best possible rate (unless you are not too smart) and the finance person won't get rich on the deal. Car dealers are not mind readers, tell them what you want to do, (which model, etc.) and quit playing games (hiding your trade, until later, etc). They are not there to NOT sell cars and chase you away, if they can make a deal, no matter how short, they will sell you the vehicle. Competition is too keen for that......... 

Feb 4, 2013 5:47PM
avatar

The only thing this person is right on is "Do Your Homework". If you wander oblivious down a dark street, you should expect to get mugged! No different in any negotiation. Common Sense! Know how much you can afford. Surprising how many people look at cars without a clue how much per month it will run only to discover that what they want can’t meet their budget. Know what you want, what you can afford, check your credit (not at creditscore.com), look at your trade closely and go online to get a value. Sources like Black Book Online or Autotrader Trade-In will give you the real number which will be lower than the inflated retail number the other sources show. Don’t expect the dealer to advertise its most expensive model, but the cheapest, which is not bait and switch by the way. Expect that if you wanted a loaded car, you’ll pay extra for it. Realize that the salesman is indeed on commission. His time is his money and he has a right to earn a living also. The less time he has to spend in helping someone select a vehicle the better it is for him so he will work harder for the consumer who he knows is not wasting his time. You as a consumer may get a loan for $30,000 every 5 years while the dealership may borrow $250,000 ,000 over the same period. Who do you think can get the better rate? Don’t discount the dealers offer. It can usually beat the banks. One last note, if you live in a cold part of the country with salted roads that rust protection at might be a bargain. If you live in Arizona, well that answer is obvious as well! One of these day they will actually get someone who knows what they are talking about and they will provide consumers with information they can use rather than just trying to perpetuate the same clichés.

Feb 4, 2013 5:20PM
avatar
How many times will uninformed "journalists" write the same ole tired BS about car dealers?? I've been in the autmotive industry for 30 years and never been a party to any of the trash this person tries to portray "car salesmen" as. Do your homework, look up the value of your trade, do research into the price of a new car that you're interested in, know the bank rates that you qualify for at your bank. Then go to a dealership. Informed, reasonable thinking customers are a pleasure to deal with. People, like the author of thos BS article are such a pain, I hope they have to WALK for the rest of their lives. I would not let this idiot buy a car !!!!!
Feb 4, 2013 5:11PM
avatar
Heres another trick they have. They have certain cars on the lot that may be low mileage or has had mechanical issues so after they get a feel for your personality they will try to direct you to those cars first and try very hard to sway you away from what you really want.
Jan 2, 2013 2:51PM
avatar
I am the salesmanager of a new car dealership. The mark up on cars now is probably less than any product on the marker. Everything you want to know is on the computer. There should be no reason that a person should not get a fair deal. As for f&i they present a menu for the customer to choose from and they have to sign it if they choose not to praticipate. Everything is up front and above board. As for selling direct to the public, that would do away with a lot of jobs. Why don't we do that with all businesses? That way everyone could live off the government. Why is it a sin for the automobile dealerships to make money? I get tired of hearing this BS. I don''t know what you do for a living but it can't have anything to do with sales.
Jan 1, 2013 11:23AM
avatar

Dealers want to talk payment instead of price? Absolutely! hat is because there are a lot of idiots who can's count their toes and get the same number twice. When I sold cars, I had a lot of people who wanted to buy $30,000 cars with no money down, a trade-in with a payoff greater than the value of the car, and demanding that the dealer cover sales taxes and motor vehicle charges, and still wanted to be at $300 a month for 60 months. Situations like that are common.

 

High pressure tactics? There is an expression in the business: "Buyers are liars!" There are more than a few customers who have come in that demand the best price so they can go shop that figure. No. If you are going to waste my time, I am going to do what I can to close the deal. I am not doing the work for another dealer. 

 

Sell the car yourself? Good luck! Frankly, I could not care less if the customer sold the car themselves. Let them deal with waiting for customers to get their money together. Let them worry about explaining to customers why their car is a a mess. Let them worry about creeps and weirdoes coming to look at your car.

 

Before this dope writes a stupid article like this, she should try to do some more research!

Dec 31, 2012 8:26PM
avatar
If you don't like the figure the dealer gives you for your trade then have Edmonds, Kelley Blue Book, NADA or MSN Auto buy your. Each one of  them have a different figure as to what your vehicle is worth. The auto auction gives a better idea as to what your vehicle is worth.
Dec 31, 2012 7:23PM
avatar
another expert. Probably 24 0r 25 years old. No clue!!
Dec 31, 2012 5:10PM
avatar
Stacy Butthurt Johnson must be a no talent writer. Going after the car salesperson gets old.  The only people who get taken advantage of are those her are too stupid to do research on their own.  Automotive sales are no different than any other out there.  The funny thing I love hearing is, "I dont want to haggle on the price". Easy fix.....pay sticker then.
Dec 31, 2012 5:08PM
avatar
Give me a break.  Enough of you dealers who are "insulted".  The reason you keep hearing these horror stories about dealers is because they are true.  I agree there are some dealers who are decent, hard working people that will give you a fair shake.  Unfortunately, they are in the minority.  When you go to a dealer, you had better be prepared and educated.  Take someone with you who knows the score.  I have seen many examples of exactly what the writer describes happen to unsuspecting customers.  DO UNTO OTHERS AS YOU WOULD LIKE THEM TO DO UNTO YOU.
Dec 31, 2012 4:26PM
avatar

Got to a Toyota dealer and you will see why their sales satisfaction rating are amoung the lowest in the industry.  Then read NHTSA ratings and see why their vehicles are unsafe.  Check financial sites and see why the resale is so low.  Bottom line is do buy an overpriced, overrated, unsafe vehicle with poor resale value.  To top it off...the treatment at the dealer is horrible.

 

Be a smart consumer, avoid Toyota, Scion and Lexus.  Shop Nissan, Honda, Hyundai, Ford, GM, Chrysler, VW, etc... 

Dec 31, 2012 4:00PM
avatar

When I bought my first car I DID NOT know what I was doing. I did not know what to ask or think of asking. I was convinced that I could trade later, because I needed to establish credit and blah blah. I was 19 working part time and going to school full time, I didn't have help and made bad decisions. I'm not of the group of few Americans, who can put 5,000-15,000 on a car, I needed financing. I don't regret my mistake as it taught me valuable lessons when purchasing my next car. I knew my options, I knew what car sites to look at and knew my numbers. I walked away with a better deal than I ever could imagine. I also, DID NOT feel cheated and f'd with no vaseline when I left. You jus got to go in there with confidence and know what you're talking about. If you go in and don't know anything they will know. Like they say "dogs can smell fear." Dealers can smell a dumb (unknowing) car buyer. LOL!!

Dec 31, 2012 3:21PM
avatar
KBB etc are pretty much useless for determining what your car is actually worth to a delaer. They use the "Manheim Index" (I believe that is what they called it, which is tilted towards wholesale spot price for your trade in. I thin the car value indexes other then that, which you can't access, are pretty useless.
Dec 31, 2012 2:47PM
avatar
I have only dealt with one bad apple(car salesman) while buying the last 15 vehicles over the years. He was just rude but not a thief. Do your due diligence, be kind and courteous, don't spend what you can't afford, only shop at reputable dealers. 
Report
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.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

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

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.

VIDEO ON MSN MONEY

TOOLS

More