Sneaky Car Dealership Tricks to Avoid at All Costs
Buying a new car can be exciting, but it can also be a total pain in the neck. You may be tempted to try and get the experience over with as fast as possible, but you should resist that urge. Take some time to research the process and learn the common ways dealerships trick their customers into paying more so that they can’t take advantage of you.
Always remember that salesmen work on commission, and many care more about the sale than your needs. You are the one responsible for watching out for you. Start by learning about the most common sneaky car dealership tricks so you can smoothly avoid them.
False advertising is nothing new for car dealerships. For decades, some of the less scrupulous dealerships have strategically designed ads to make customers think they're offering more than they really are. The car you see in a photo, for example, might be a scaled-up version of what they actually have on the lot.
The Sneaky "Money Factor"
If you're thinking about leasing a car, be on the lookout for the "money factor." Also known as the "lease factor" or "lease fee," this number is presented as a tiny little decimal that most customers don't even know exists. If you're not careful, however, it can cost you big.
Tossing Out Some Bait
You might spot a car ad or offer online that seems too good to be true. It probably is. If you end up pursuing that offer at the car dealership, you might arrive to find that the specific car or offer from the ad is (sadly) no longer available.
Adding Bogus Fees
Purchasing a car is a long, exhausting process. Often, you simply want the whole thing to be over long before you get to the end of it. Resist the urge to give up and just sign! The closing is the most important part.
Sweet (Misleading) Words
Half of the battle for dealerships is getting customers into the lobby in the first place. They have a million ways to lure you inside, and one is by advertising outrageously good deals like free oil changes and tire adjustments. These deals are generally accompanied by the words "See dealer for details."
Unnecessary Extended Warranties
If you have ever had a car with a seemingly endless array of problems, you might think an extended warranty sounds like a great deal. It covers repairs on your car after the regular warranty has expired, and as you know, repairs can get pretty expensive.
Special Rules for Leasing
Leasing a car isn't usually the best option for most buyers, but if it's a road you decide to go down, don't ever get an extended warranty on top of your car deal. A lease is essentially an extended warranty in and of itself: you often pay as part of the lease price for car repairs to be covered by the dealership.
Hidden Details in the Small Print
Any time you make a deal that requires signing a contract, you need to make sure you fully read the paperwork. It might feel awkward to sit there for 20 minutes as you work your way through page after page of small print, but the dealers may be hoping you’ll rush.
Suspicious VIN Etch Fee
If you haven't heard of VIN etching, that's probably because it's useless. Basically, your car's VIN number is etched into the glass of the windshield. Supposedly, this deters car thieves from going after your vehicle because they can't easily get rid of the VIN number.
Pushing Extra Protections
When vehicles are made, they’re generally designed for the long haul to keep consumers happy. That means using the best paints, resilient fabrics and rust-resistant materials. Why, then, do dealerships so often try to sell you added protections for your car?
Models With Too Many Options
If you have ever shown up to a dealership, only to find the car you were interested in suddenly costs thousands of dollars more, it might be because of "dealer-added options." This refers to flashy extras like a sunroof or fancy add-ons, and they send the price right through the roof.
Guaranteed Asset Protection
Guaranteed Asset Protection (GAP for short) is essentially insurance that covers you in case the worst happens. If the car gets totaled, for example, and your insurance company doesn't award you a payout that matches your loan amount, GAP covers the difference between the two amounts so that you’re not left with debt on a ruined vehicle. Sounds awesome, right?
Illegal Yo-Yo Scams
This particular dealership trick isn't just shady — it's downright illegal. Plenty of unsuspecting clients have been victims, however, so you need to be aware of it. A yo-yo scam begins with a customer taking a car home after supposedly closing a financing deal like normal. A few days later, the dealer calls to break the bad news: Your financing didn’t go through at the stated terms, and you need to return to pay a higher down payment or sign a new contract with much less appealing financing terms.
Talking in Terms of Monthly Payments
Salesmen will always try to sell you more than what you need or even want. They may offer you a grocery list of extra perks that you didn't know existed, each one costing quite a bit extra. The rising overall price tag often scares customers, so salesmen try to frame it in terms of monthly payments.
On-the-spot delivery isn't always a bad thing, but it's something you should avoid accepting. This term refers to when a dealership allows a customer to take the car before their loan has been approved. Essentially, you're going home with a car before the deal is sealed.
Unfair Trade-In Practices
When you're done with one car and want to trade it in at a dealership, make sure you do your research on its value as well. Many people are eager to get their old vehicle off their hands and move on with a new one, so they don’t fight for the trade-in value they deserve — and dealerships know it.
Focusing on Your Monthly Budget
Instead of asking how much you want to spend on a car in total, dealers often ask how much you want to pay monthly. The problem with this is that just about any car can fit into your monthly budget if you extend the duration of your payments.
Trade-In Plus Purchase?
It may seem like a good idea to trade in an old vehicle and purchase a new one in the same sitting. After all, you're saving time, right? Well, you might be losing money at the same time. Doing both at once allows the dealership to skimp on one offer while appearing to do well on the other.
The Dreaded Four Squares
There are some strategies in the world of car dealerships that everyone except the customer knows are a load of — well, you get the idea. One of them is the "four square method," and you will never see a decent dealership do it in front of a client.
Lease Down Payments
One of the ways leasing a car is beneficial is that it's not immediately expensive. You shouldn't have to shell out huge sums of money when you first lease a car, but sometimes, dealerships can't resist looking for more money.
Discussing How You Plan to Pay
If you think the dealer is your friend, then you are sadly mistaken. Their interest lies in selling you a car at the highest possible price and asking how you plan to pay helps them do this. If you admit that you want to pay cash, they are sure to offer higher "deals" to compensate for not making money from financing.
Selling You a Lease
If you walk into a car dealership with the intention to buy a vehicle, don't ever entertain the notion that you should lease instead. If you're already planning to buy, chances are good that leasing will not be a better option. Upfront costs may be lower, but it's not as beneficial as owning a car except under very specific circumstances.
Educating You on Everything
If a dealer sees that a customer doesn't know anything about the process of buying a car, they will use that to their advantage. If you find the dealer is telling you a lot about things you've never heard before, it's a sign you should go home and do more research.
Too Many Promises
When it comes to car dealerships, if a promise seems too good to be true, that's probably because it is. Beware of seemingly generous offers, such as paying off your previous car loan in full despite your trade-in value. They often add that amount to price somewhere else.
Cheating You on the Interest Rate
Dealerships seek to take your money in many subtle ways. One of them is by charging you a high interest rate on financing deals. If you trust the dealer to arrange a third-party loan for you, they have the discretion to charge a higher interest rate than the loan institution.
Time Is Running Out
Dealers — and salesmen in general — will always tell you that time is running out on whatever deal you're interested in on a particular product. They try to intentionally create a sense of urgency, hoping you’ll rush through the process while overlooking red flags and agreeing to things you wouldn't consider if you had taken your time.
"You Need to Come In"
It shouldn't be difficult to call or email dealerships and ask about their prices. However, they will try to tell you that you need to come into the dealership to get the real offers. Hold firm and push them to give you some numbers over the phone or via email.
Tricking You Into a Different Deal
If you've researched car loans on your own and have been preapproved at a certain interest rate, good for you! If you're curious whether the dealership can offer a better deal, that's a great idea, but don’t give too much info to the dealer.
Timing Is Everything
Dealerships are constantly working with quotas and preparing for new models to arrive. These cycles often affect the deals they offer customers and could work to your advantage. In late summer, for example, they are already thinking about new cars that will arrive in the fall months and around the holidays.
Keeping Your Guard Up
While salesmen are still people worthy of respect, and some of them may even genuinely help, you should probably treat them with a healthy dose of skepticism if you want to get the best deal. They are trying to make a living, and the drive to succeed generally prompts them to put their own interests above yours. They fib about the pros and cons, availability and one-time offers for a living.