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
- Tricks of the trade: Restaurants
- 7 simple steps to winterize your car
- Tricks of the trade: Credit cards
- Smart Spending on the go: Get our app for Android or iPhone
- Car buyers stretching out payments
- Should you get a 7-year car loan?
This whole article is a crock..... I work at a dealership and nothing like this goes on here. We ask what "payment" works because people come in with unrealistic ideas that they can get a $60,000 vehicle for $500/month with $2000 down. I didn't invent math and it doesn't take a genius to multiply $500 x 60 months and add $2000. It doesn't add up to $60,000, does it? A warranty is just like health insurance, you might never use it, but it's there when you need it. Buy it or don't. I'm not the one that has to pay the bill when something goes wrong with your car. Your trade? It's not worth what you think it is... oh by the way, KBB doesn't buy trades. So their numbers make you think that your hooptie is worth money when it's not. If KBB says it's worth $6000, then it's actually worth $3500. Just try to find someone who's going to pay $6000 for your car. Oh and make sure that when it breaks down on them, they can come back to YOU to have it fixed. Your Credit??? Don't blame me.... Your credit score is a 604 because you don't PAY YOUR BILLS. I can't make up your credit score. We run it through Experian, Equifax and Trans Union. THEY tell US what your score is. It also tells us that you don't like paying your bills on time. Or ever for that matter. So when you get a rate of 12% it's because your a roach and your credit sucks. Commission? Yes, we work on commission. We get a whopping 18% of the total profit. So if there is a $1000 profit on the vehicle after you grind me to the bone for an extra $10, $20, $100, I make a staggering $180 minus taxes. WOW.... Where can I spend it all???? Bait & switch? If you come in on an advertised vehicle for $199/month, don't expect to get the fully loaded luxury vehicle of your choice. It's the cheapest vehicle on the lot. Buy it. We don't care. Just don't complain when it doesn't have all of the bells & whistles that you want. WE don't switch you, you switch yourself off of the cheap car and blame us when your payment goes up by $100 because you want Nav, heated seats, leather, sunroof, bluetooth... Seriously, come on..... Oh, one more thing. If you leave because you want to think about it. Don't count on the car being there the next day. You're not the ONLY one in the city that's out shopping for a vehicle. I've watched many people leave, only to come back the next day and see that the vehicle is gone. Yes, it happens. Get over it, make a decision and go home. Believe me when I tell you, you will lose your dream car. I'm tired of people writing these articles that trash car sales. How much profit is in that 42" flat screen that you just bought for $1500? Probably $1300. But when was the last time you went into Best Buy and asked for an invoice? What's the invoice price on that new iPhone that you paid $699??? Did you get a deal on that? Probably not. Car salesmen are out to make a living, just like the next guy. If you are going to try to grind them to the bone on $10, $20, $50.... maybe you are shopping out of your league. If you can't afford $880/month, but your maximum is $850, you need to go home. I currently sell over 30 vehicles per month. I make a nice living. I'm certainly not rich, but I'm doing fine. I also don't put up with mooches that come in and follow the rules in this article. I don't have time for that. Try it. See how fast they kick you out of the dealership. Happy shopping!!
I've found a favorite trick is to ask if you want to take the car home and drive it overnite. Everytime I have done that I bought the car. You feel like they are "trusting you" by letting a stranger drive a new car off the lot.
The most profitable department in a new car dealership is the F&I (finance and insurance department). That is the guy you see to do the paperwork. Learn real fast to say NO. Practice it. Because these guys are persistent. Nothing they sell at any price is worth it.
On the financing, get preapproved with the amount, term and interest rate. And then after the dealer closer tells you their fantastic deal (it's not), tell him what you can get it elsewhere and if they can beat it, they get your business, otherwise you will use your pre-approved offer. Don't let them say they will match it. Make them beat it or you take your financing elsewhere.
On a trade in, the only time I have ever traded a vehicle is when I knew the vehicle had problems and either they were to costly to fix myself or did not want to bother fixing it. Most older cars get wholesaled off sight, condition and mechanical check unseen so the dealer really does not care if there are hidden problems with the car. Actually they expect it and that is reflected in their lousy price. If your trade-in is in good condition, sell it yourself. You will get a better price.
On the new car, I now only shop by email with the dealership's internet sales dept. Get 2-4 dealers over the internet competing with each other. Don't be afraid to play one dealer off the other to beat the crap out of them. That way you will get the lowest price. Also negotiate the "dealer documentary fee". This has become a big source of income to many dealers as they charge $150 or so to do the paperwork to buy the car. About a 20 minute job. If you don't pre-negotiate that they will wait until you get in and sit down to sign the paperwork and then throw that at you, and this is after you have your heart set on the car and are very emotionally involved. You want to make sure you are paying for the pred-determined price of the car, actual cost for license plates, actual sales tax and any other charges are zero unless otherwise pre-negotiated.
Copyright © 2013 Microsoft. All rights reserved.
Quotes are real-time for NASDAQ, NYSE and AMEX. See delay times for other exchanges.
Fundamental company data and historical chart data provided by Thomson Reuters (click for restrictions). Real-time quotes provided by BATS Exchange. Real-time index quotes and delayed quotes supplied by Interactive Data Real-Time Services. 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 SIX Financial Information.