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
Dec 31, 2012 1:39PM
avatar

The car business is no different from any other profit organization. A good deal is the perception from the person buying a product AND the person selling the product. It has to make sense for both parties for the transaction to work, but that doesn't mean the dealer shouldn't be able to make money on a high dollar product as long as it isn't ridiculous. What's wrong with making 2 or 3 thousand dollars on a Twenty- Thousand dollar product? Go buy a mattress for $2000, the cost is 8 or 900 dollars (over 200%) or a diamond for your girlfriend where the cost is marked up sometimes 1000%. Picking on car dealers is getting old. There are plenty of other companies that make far more money on consumers that car dealers!!

Dec 31, 2012 1:26PM
avatar

You should do every future car buyer a favor and stop writing these stupid articles about TRICKY CAR DEALERS . As with every business there are good and bad examples but you constantly make all sales people out to be crooked and untrustworthy. It is obvious that you know nothing of how the business really works. The sales person is probably the hardest working of them all, and probably the lowest paid of the bunch. Most of these so called extras are sold in the business office...long after the customer has found what he likes and is about to pay for it. And as for the EXTRAS...if you don't see the value....don't buy them.  But for you to claim none of them have any value is completely wrong and misleading...ever seen what grape juice looks like on light cloth interior...fabric protection isn't all bad.

Even WAL-MART offers extended warranty now....and you don't describe their practices as TRICKY.

 You should keep your bias opinions to your self and let people make up their own mind!

Dec 31, 2012 1:06PM
avatar

holy cow.....where are all these stupid people.  Switch car dealer for furnitue store and voila....it works or try furnace repair and cleaning......or please dont say you never bought a major appliance, life insurance,health/disability insurance, etc, etc etc.  Now if you want to invest in some other community dont forget YOUR TAX dollars go where you buy the car.  Your congress and senate just got a raise, did you?  Go ahead and see what they are doing for you?  I M just wild guessing that the writer of this crap has participated in 50- 100 auto transactions in the last 30 days.  YEA  hahah  Car dealers profit from good loyal business not overcharging for purchasing or repairs.  The writer this crap obviously likes cheap crap,products that dont work and has a whole bunch of stuff nobody will fix and I M not going to mention (sit down folks) YOU GET WHAT YOU PAY FOR. 

Dec 31, 2012 1:03PM
avatar

Dear poor sneaky coniving worshiping the almighty dollar "CARDEALER" who posted "I SELL CARS" people like you don't deserve the respect of the paying public for all the under-handed scemes you've procured over the years in the guise of "just trying to make a living". shame on you for deceiving us while you cleanup on making 1 to 3% on your (ie) 0% loan money from your bank or the kick back you get from the car manufacturer when they offer up to $3000.00 off on a new vehical or on the inflated prices of the extras a customer would or might want but would for-go because of the cost, and also the astronomical rightup cost of the "parts" you sell through your parts counters, for all of your customers  like 300 to400% on those parts, also everyone knows a financial institution is not in business to give you money to lend at 0% interest, so in closing I want everyone who reads this to just be aware of the sneaky coniving ways of their local "POOR" car dealership owner! 

Dec 31, 2012 1:03PM
avatar
Dear Mr. Johnson, please crawl back under your rock.  I have been a new car dealer for 25 years, and while yes some of these practices were used for years, I do not know of any customers or manufacturers who would stand still 1 second under these tactics.  You should get into your 1970 Ford or Chevy and come into the real world.  Car dealers provide a service which they are not being properly compensated for, 1 to 2% net on millions of dollars invested.  Your trade? What's it worth? Let me check the oil and operation of parts that may cost thousands to fix for resale.  Oh and by the way you have a bad car fax on that little parking lot bump that will cost you 40% of your value.  Making money on loans??? I do not know of any customer who a dealer can't get the money for 2 to 6 % cheaper than a bank....and ps we usually get a flat on each loan (100 bucks). Oh and you also didn't know that loan and after sale products are heavily regulated in all states.   Since we are all such bad guys, go buy a horse or a bicycle and stay off my lot.
Dec 31, 2012 12:41PM
avatar

I have been in the car business for over 9 years and sold over 2000 cars many of them are repeat customers and referrals. I treat everyone with the same respect that I would like my parents my kids and myself to receive when we go shopping. A car salesman is a person too with mood swings and daily issues like any other citizen, YES  we are here to make money ,we don't work for free, when was the last time you visited an attorney and said at the end of a 4 hour meeting.."I'm not paying $300 an hour...I know someone who paid for another attorney $150 an hour.." Really...? Yes you can negotiate everything in this world but do it with respect for the salesman that busted his **** in freezing temperatures and 100 degree heat in order to get you the car you wanted to test drive and after 4 hours you tell him " I'll think about it" and you are surprised on your next lot to find an arrogant and cocky salesperson mistreating you...now..we all started the same ,young and green behind the ears banding over backwards for customers and then getting the worst survey just because the process was too long..well no kidding "sticker is quicker", or maybe the payment is $5  higher then you can afford which is $195 over a 39 mos lease or $360 over a 72 mos finance term, Nobody make you sign the dotted line ,as a consumer you are always in control and if you are not treated well then just leave. Our attitude sometimes reflects the customers', standoffish and argumentative but in many cases there's a bond created for many years to come between the salesperson and customers.

So Dear MSN...maybe you can write some stories about positive experiences..they just might bring more joy to car shopping. God Bless.

Dec 31, 2012 12:34PM
avatar
Same as everything else in life. Get educated and ASK questions.

If can't or won't do that out of your delusional pride.....you deserve to get screwed.

Remember folks, YOU control the entire processes. No one says you HAVE to buy. 

Dec 31, 2012 11:33AM
avatar

I sell cars. I don't mislead. HOWEVER, BUYER BEWARE! There are plenty of scammers. Find someone you can trust and work with that dosen't have to "put you in a car today!" Educate yourself online before you visit the dealership. Remember all business owners must make a profit. Good luck in 2013!

Dec 31, 2012 10:55AM
avatar
After I've done my homework, if the deal works for me, then what the hell do I care whether the dealer made a profit. I hope they did. Makes the world go round. Also, KBB is usually way off. NADA is closer.
Dec 31, 2012 10:47AM
avatar
the dealer does not know the final price they pay for a car until the end of the sales year is up and the total number of sales from his dealership have been counted,then it is any where from 2% to 30%below MSRP.  At 2% a dealership is not making much.A typical store will mark prices up 75% today yet no one complains.  As to warranty hey do your home work before you buy, the engine itself is unlikely to breakdown until you have over 60,000miles and if you do as manual says it should last 180,000 before it breaks down.
Dec 31, 2012 10:05AM
avatar
Do your homework before going to a dealer. Know what your car is worth for trade. Be honest about the shape its in. Get a firm trade in price before talking about a new car. Most people's biggest mistake is in the loan and the new car price. Some people just have negative equity in their trade. That may be from a bad deal before or just the buyers fault from bad choices. Don't expect the dealer to FIx IT for you. Chances are good your negative equity will just move over to your new loan on your new car. Leaving you with more problems down the road.
Dec 31, 2012 9:39AM
avatar
Nothing like a writer to advertise her stupidity and become an expert in business transactions. For every sleazy dealer out there, there are a hundred reputable business people who provide employment, support their local communities, and donate to local charities. No other industry has been maligned and dissected more than the retail auto industry. Show me any other commodity in this country for which the wholesale price is available to the consumer, not housing, not electronics, not food, etc. Writers like this expect the dealer to sell the vehicle below cost, make no profit, yet still provide service, loaner vehicles, shuttle service, coffee, and cookies. And, no, I am not a new or used car salesman.
Dec 31, 2012 9:37AM
avatar
Car salesmen are the lowest form of human beings on the planet.  My husband had been pricing around for a new-ish car but did not want to make any big purchase decisions w/out me.  We finally crunched our #'s and came up w/what we could afford.  We went back to the Toyota dealership that my hubby had originally been to, and, being the nice guy he is, requested help from the salesman that helped him the first time (even though he obviously did not buy a car the first time he was there).  After waiting around for this salesman, he finally came out, brought us to his cubicle, and said "so, we're really going to buy a car today, right?" and so I said, "if the price is right, yes."  He then said "OK - just want to make sure because I gave up my lunch for this".  I couldn't believe my ears!  I then said, "you know what?  you go ahead and finish your lunch" and got up and walked out!  We bought another car somewhere else that same day!
Dec 31, 2012 8:32AM
avatar

The writers of these articles are idiots.  They deserve to be ripped off at every other turn.  They are the people who will walk into best buy and pay full price for a TV.  Paying them a whopping 20% profit.  Yet when they go to a car dealer, they will lie and tell the saleperson they got a better price from another dealer, got more for their trade, or a better rate.  Having been in the car business for over 10 years, I have seen and heard it all.  The simple truth is, "buyers are the liers".  Yes there are some scumbag salespeople out there who can really pull the wool over the eyes of people.  They are never at a dealership for very long though.  These salespeople have to rely on "fresh ups" to make deals.  They rarely have referals or repeat buyers.  If you want a great deal on a car, avoid these salespeople by asking "How long have you been working here?"  If the answer is less than 3 months, be on guard.  Successful sales professionals will have roots with a store.  Also if a sales person does not know his or her product, you may want to ask for another so you get the right information about the car.  A great deal has little to do with the price, but on is this the right car for you.  A true pro wil ask several questions early in your visit, trying to find out the what when and why of your visit.  That guy is not just looking to sell a car, but to sell the RIGHT car for you and your needs.  This is the same guy that will still 6 position a car explaining the vehicle to you.  He or she will walk you through the deal at a comfortable pace and try to make you feel good and comfortable first.  This is my sales tactic, I do not want to sell you one car, I want to be your "car guy",  When you think of getting a new car, I want you to remembwer how well you were treated at every turn.  I want you to feel that you not only got a great deal, but have someone you can count on when it is time to replace the car in the future.  I am not saying that every sales guy is like me.  I am however saying, look at reviews on , ,, or google the store and see what people are saying about their experience. 

A real pro will work diligently to make sure you are happy with the car at every turn and will treat you from the beginning as if you were the last person he would ever sell a car to ever.

Dec 31, 2012 8:14AM
avatar
Another one is where you buy a used car with a 'smart key'.  There is always only one and you have to buy an extra one and have it programmed for $325.00. 
Dec 30, 2012 6:13PM
avatar
ONE  LAST THING ABOUT BUYING TIRE AN WHEEL.I  WOULD NEVER ALLOW MY SON TO RIDE IN A CAR WITH A REPAIRED TIRE. ALSO ON STAR AND AAA COST MONEY AND WHEN YOU ADD IT UP IT COST MORE FOR THOSE TWO SERVICE'S OVER 5YRS THEN IT DOES FOR TIRE AND WHEEL. ALSO WITH TIRE AND WHEEL YOU GET FREE ROAD SIDE SERVICE AND A RENTAL CAR IF YOU NEED IT. YOU GET A NEW TIRE EVERY TIME YOU GET A FLAT NO MANY HOW MANY TIMES DURING THE 5YRS SO WHY REPAIR ONE PLUS IF YOUR RIM GETS SCRATCHED YOU GET NEW ONE EVEN IF ITS YOUR FAULT.WHATS A rim cost ?$350.tire and wheel is the best $500 investment YOU WILL EVR MAKE.I SELL IT ON 95% OF ALL CARS I SELL AND NEVER HAD A COMPLAINT.ON THE OTHER HAND I'VE HAD DOZENS OF COMPLAINTS FROM PEOPLE WHO BAUGHT A CAR GOT A FLAT AND WANTED US TO FIX IT FOR FREE
Dec 30, 2012 3:55PM
avatar
I find it hard to believe that anyone could be as stupid and ignorant as Stacy pretends to be.  No one is that dumb!
Dec 30, 2012 11:39AM
avatar
THIS GUY TALKS TO US LIKE WE ARE 6 YEAR OLDS, WOW DID YOU REALLY LEARN ANYTHING FROM THIS WINDBAG??????
Dec 30, 2012 11:34AM
avatar
I think, in general, things have gotten a little better for even the ignorant consumer.  In the past, I don't think there was ever such a thing as an "honest" deal from a car dealership.  Now, with the new Federal Consumer Protection Act, the buyer is in a slightly better position.  The law is clearly spelled out on line.  Your state's relevant laws are also readily available. KNOW THE LAW.  I would never finance through a dealership. That's what banks are for and don't just go to the bank recommended by the dealership. I knew of one that actually owned a bank. The 3 day right of rescission does not apply to some car deals.  Get EVERYTHING promised in WRITING. Don't get carried away with emotion;  it's just a car.
There are millions of them out there and always a better deal somewhere else. Find out what the hold backs and incentives are before you look at a particular model.  Sticker price means absolutely nothing. "Invoice"?  Yeah, right!  Think you'll be treated more "honestly" at a "luxury" car dealership for an initial purchase OR REPAIR?  Think again!

Dec 29, 2012 6:50PM
avatar
I just bought a 2013 Cadillac yesterday.  I researched the car, read reviews from people like us.  Then I researched my credit.  Knew my score beforehand (free copy each year) and asked my local banks before I saw the car I wanted, what APR I qualified for.  Then, and here was the fun one, I researched the value of my trade in.  I knew more about my car than the sales person did.  I walked in and said, "I don't know if I qualify or if I can get the numbers I want so I may have to wait".  The sales person took the bait and I was reeling her in and not the other way around.  I know NADA is a lower value and dealers use that for when you trade in your car and then turn around and use KBB for when you try to buy the same car you traded in.  When I'm told "We don't use KBB"... I walk out.  I know it's going to be a rip off.  But, when I buy, I'm OK with leaving with nothing and make damn sure they know it.  So, they try to sell me instead of me selling them.  Long story short, I got the highest trade in value on KBB, and I later told the finance guy I already knew the number and then, and maybe because I was prepared or it's a really good dealership, got 3.7% financing.  24 hours ago, I brought home a 2013 Cadillac ATS Premium package loaded.  Sticker was 52K and we got it for 30K.  The story is, always know more than them and be ready to walk if you don't get the offer you want.  I tell them, you get one shot.  I did, however, walk out of 5 dealers over the years before finding this one.  It wasn't going to happen unless I held the cards.  It can be fun but you can't be lazy...do the work first!
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