Smart SpendingSmart Spending

Sneaky car dealership tricks

Car dealerships are expert in getting you to spend more than you had intended. Watch our latest Undercover Secrets video and find out how you can beat them at their own game.

By Smart Spending Editor May 6, 2013 7:35PM

You already know buying a car means dropping a bundle of money. But why spend more than you have to? Trouble is, car dealers WANT you to spend more, because then they earn more. And they have developed an impressive list of tricks to get you to part with way more cash than you'd intended.

In-house loans, bait-and-switch, and pricey extras are just a few of the ways they'll get you. Watch this week's Undercover Secrets and learn how to escape a dealership with more of your money in your pocket and maybe even the car you want.


121Comments
May 7, 2013 7:50AM
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Seriously? This is the best you can do, MSN? Because I've grown weary of the media beating up on car dealers, I'm going to lay a little feedback on you. DISCLAIMERS: 1) Not all dealers / dealerships are excellent. 2) Not all restaurants / movie theaters / bait shops are excellent. Painting with a broad brush is inappropriate and disingenuous. Now, let's talk about some of your points. Telling people not to finance vehicles through a dealership because they make money on it? Do you think banks loan money out of the goodness of their hearts? If you feel the loan is overpriced, comparison shop and make your best deal. “Bait-and-switch” is not nearly the issue some people make it out to be. Do you know that 70% of the time customers end up purchasing a different vehicle than they initially inquired about? Are they all bait-and-switched? Perhaps the customer actually found a vehicle that more closely met his or her needs!  Next, walking away is always the customer’s best line of defense. If you don’ t like the price, the car, the sales consultant or the dealership, by all means walk away, much the same you would do if you were in any other retail establishment. As for your gratuitous “Don’t be bullied into giving them money,” statement, if they bully you – LEAVE! Add on equipment – this is known as ‘personalization,’ because – newsflash – customers like to make their vehicles their own. If you don’t want extra equipment, don’t add it! And, telling people not to add protection items because it would be “easier to fix it yourself?” While rustproofing hasn’t been offered at most dealerships for years (which anyone who did any research would know), with any protective coatings you’re buying the warranty, not the product. Again, if you don’t want it, don’t buy it. Finally, since 94% of potential automotive buyers research online before they buy, it’s probably not necessary to tell people to visit kbb.com, Edmunds.com and even eBay Motors for trade values – they already do it, and they should. The most insulting element of this entire video is to potential buyers, assuming they’re completely uneducated and lacking the ability to research dealers’ reputations. I, on the other hand, believe today’s buyers to be much more educated than ever before and fully capable of developing trusting dealership relationships on their own – without inane propaganda like this video.

May 7, 2013 2:12PM
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Weak writing....do you think that MSN is a non-profit?  
May 7, 2013 2:45PM
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What is wrong with your dealer doing your financing? They found me a cheaper rate than any bank I contacted, saving me money. They should be compensated for that. Problem with John Q today is they dont know their limitations, or dont care, and it is a matter of immediate gratification. Everything is great until the payment book comes in the mail. Let the buyer beware!!!
May 7, 2013 2:03PM
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The ONLY reason the auto dealership is looked upon as an enemy is because the American people are not used to negotiating anything. We are one of the very few countries that doesn't negotiate everything.

 

The auto dealer is one of the only retail establishments that actually sell their product for below what the manufacturer has set the retail price at. Try and negotiate the cost of a suit or shirt at Macy's. Try and negotiate the cost of your bill at your favorite restaurant.

We even employ people to negotiate for us (agents) because we are so uncomfortable with the process.

 

The auto dealer should be your best friend as they are the very few who will sell thier product for less than the manufacturer suggests. The American people are afraid of paying more than thier neighbor, for anything. If every auto dealer stuck to the published price of the vehicle, everyone would be happier. The dealer would make more money and the consumer would pay the exact same price as thier neighbor.

 

What a sick world we live in when one of the only places to give everyone a lower price than is published is looked upon as a crook!

May 7, 2013 2:18PM
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I for one am tired of the media broadbrushing whole industries because the consumer /buyer remains ignorant of the product they are buying. There is so much information concerning cars and pricing on the internet that buyers have themselves to blame if they get screwed on a car deal. Granted, there are unfortunately a few bad apples in the car business, but I have found that most reputable dealers try to help people through the process. Dealerships aren't there to give cars away, they are there to run a profitable business...............
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This "news" story is what's referred to in the media industry as a "filler" Take a hot topic off of a list such as sex, rape, war, car salesman or plane crashes and write what ever comes to mind, just as long it helps fill the page space. What a waste of my time especially having to first sit through a commercial to boot!
May 7, 2013 3:20PM
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The clear problem here is this woman has no clue what she is talking about.  It seems no one has informed this woman that a auto dealership is a BUSINESS and is entitled to make as much profit as possible on each transactions.  It is funny (or not) that the cost of running a dealership is never discussed by these knuckle heads.  What about the jobs created by auto dealers?  No dealer profits means less factory orders for inventory.  How many jobs do you think will be lost as a result?  As a dealer, we finance our inventory do you have any idea what the cost of this is?  The dealer pays $50,000 for a car that is on his/her floor plan (financing) what profit are they entitled to? I know, "make it on someone else".  The problem is no one wants to be the "someone else".

If you don't want to allow a dealer to make a profit don't complain about bad service and run down dealerships, these things cost a great deal of money to provide to the customer.  Customers want the red carpet rolled out for them and we are happy to do it but guess what it's not free!

May 7, 2013 3:30PM
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Whenever I see a video on MSN about car dealers, I always watch it.  I find them to be comical.  Whoever is writing this stuff should do proper research.  How can you tell a consumer not to buy an extended warranty?  What if the consumer is driving 35 thousand miles a year and there factory warranty is good for 36000 miles?  In a year the consumer will be without warranty coverage.  I mean really are you people even thinking about what you are saying to the consumer.  An A/C compressor can cost a consumer 12-1500 bucks to replace.  Not all consumers have the ability ro repair cars.  An extended warranty is protection for the consumer.  Here's another fact, lets say the consumer is on a monthly budget and they have a major breakdown.  The consumer has to make a decision to repair the car so they can go to work or make there payment....think about that for a moment. 

  I am in the business and have been for 17 years now, these things happen every day. Please think your articles and video thru or perhaps MSN should hire a consultant who was successful in the business.

May 7, 2013 4:05PM
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Dear Isnoopy!

 

You're an idiot. In some cases a mfg. extended warranty and protect a person that drives a high amount of miles. Has it occurred to you that gap insurance (especially on a leased vehicle) will protect a consumer from owing literally thousands more on their vehicle that it's actually worth is stolen or wrecked?

While there are some less than honest dealerships, one can say the same about any other business. A reputable dealership would NEVER, EVER present a "fake" invoice. That's a violation of FEDERAL LAW, and subject to tens of thousands in fines/prison for each offense. You're puny profit on a new car is certainly not worth it. Fact is, the average new car dealership is considered a huge success if they earn a NET PROFIT of 5% after expenses in the new car department.

Do your homework before opening your ignorant mouth. I ran multi-franchise dealerships for over 30 years. Truth be told, the folks that paid the most profit were ****es such as you that thought they knew everything.

May 7, 2013 3:50PM
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C'mon, they recycle this old chestnut in one form or another when they run out of filler news. In my 30 years in the car business the biggest liars on earth are the customers..and boy are they horrible at it.
May 7, 2013 3:02PM
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Hahahahaha, this again???  I like the product, the product has a price, I give you the money for the product, and you give me the product...
May 7, 2013 4:12PM
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I just don't understand why an auto buyer should have to negotiate a car deal. I don't negotiate when I buy at Wal Mart or Target. Give me trade in value for my car and put your best price on your window sticker and let's quit playing games. It shouldn't take all day to haggle over the price of a car.
May 7, 2013 2:06PM
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Great article:)  If you weren't aware of any of these tricks, call me, I have some great land for sale in the middle of Alligator Alley Florida.
May 7, 2013 5:00PM
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hey msn the banks set a limit on the amount of  profit to be made from a loan cause the dealerships are doing the banks job.  this reporter should go back to school , or shut the hell up

May 7, 2013 4:36PM
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Wow.... it's always about car dealers.... There are Honest Car Dealers... Not all are crooks... Just be smart when you buy.. shop around. Ask the Better Business Bureau, friends, or your local Chamber of commerce. Bait and switch, really, that is done more at furniture stores than car lots.

We have been in the car business since 1967.

 

May 7, 2013 4:55PM
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hey msn this is the dumbest yet. all banks in house or not make money on the loan thats called your apr rate and even if its 0 percent your usally giving up a rebate for that zero percent , so is it then free. hell no you paid for the zero percent . I have an idea go after the real crooks lawyer 's , doctors and the hospital bills, and are taxes. so much more out there.  give it a rest you dont know sh*t on what it takes to work with cars .
May 7, 2013 5:40PM
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Wow, this video is pathetic.  This isn't the 1970s anymore.  You gave two solid pieces of advice - get pre-approved and know about what your trade is worth.  You should probably take some time to catch up on the modern car dealership.
May 7, 2013 4:36PM
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What's next? House siding salesman, roofing companies, drug store employees? What a random and unfair story.
May 7, 2013 5:44PM
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WOW !!!!    Earth shaking..!!    Probably the lamest thing I've seen today....!

May 7, 2013 7:20PM
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My take-away from that video is that it is evil for a car dealer to make a profit. It's OK for you to get a paycheck at the end of the week for whatever it is that you do, and it is definately OK for MSN to make a huge profit every year, but if a car dealer sells something for more than it cost him, that is evil and wrong? Do you think those big showrooms and customer lounges are free? Do the insurance companies, utilities, and tax collectors skip over car dealers? Dealership employees should work all week for nothing? What the hell is wrong with you? MSN needs to get a grip on reality. 

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