Ready to buy your first car? Looking to trade in your current car? Buying a new car equals dealing with a lot of worries, paperwork, research, and math. There is so much at stake, especially if you are about to invest in a used vehicle, and especially if you are buying it from a dealer. But if you know about some common car dealership tricks and are ready for them, your chances of not being fooled are greater.
There is always some risk in buying a car if you are not a mechanic or professional car purchaser. Gregg Fidan, the author of the book “The Honest Guide to Buying a Car” says “the dealers have an unfair advantage when it comes to negotiating”. They are experienced and know special tricks to bewilder consumers. But there is no need to avoid buying a car from a dealership. You just need to be prepared and informed about the kinds of car dealership tricks that dealers might try to pull.
Gregg Fidan distinguished over hundred different scams that can be used by dealers. These scams carry different risks and levels of expenses needed to fix the problem.
Here are some of the most common, annoying, and expensive car dealership tricks that dealers might use to deceive you:
1. Double First-Payment Scam
TRICK: Leases usually require you to make the first monthly payment up front, but sometimes the down payment includes this and other times it doesn’t. Some dealers will try to take advantage of this ambiguity and get a double first-payment out of you.
SOLUTION: Check the agreement carefully and make sure they are not double charging you for the first payment.
2. Raising the Price on the Vehicle
TRICK: Many car shoppers don’t realize you need to negotiate the purchase price of the car when leasing, so they leave it up to the dealer and end up paying full MSRP.
SOLUTION: When leasing, the purchase price of the car is called the capitalized cost. This should be negotiated just as aggressively as if you were buying the vehicle.
3. Useless Add-Ons
TRICK: Most dealers will try to sell you useless but highly profitable add-ons such as paint protection, fabric protection, VIN etching, undercoating, or rust-proofing.
SOLUTION: There are only a few add-ons you should consider buying, such as extended warranties and GAP insurance. Most others are useless.
TRICK: Curbstoners are car dealers who pose as private individuals in order to defraud consumers or skirt the FTC rules pertaining to selling used cars. They will post ads on various classified sites such as Craigslist and pretend to be the owner just trying to sell their vehicle. You may be thinking this is harmless, but these curbstoners are not only breaking the law, but are also usually selling vehicles with hidden problems that can affect its safety and value. They usually sell vehicles that no reputable dealer would touch.
SOLUTION: First, always make sure to get a vehicle history report (keep in mind this is not fool-proof). You also need to ask to see the seller’s driver’s license along with the car’s title. If the names don’t match, don’t buy the vehicle.
5. Odometer Fraud
TRICK: Digital odometers, which were thought to be less susceptible to tampering, can be even easier to manipulate. Unscrupulous people are reprogramming digital odometers using relatively inexpensive software and devices made for legally recalibrating faulty odometers. The NHTSA estimates that consumers lose billions of dollars to odometer fraud each year and up to 1 in 10 used cars sold may have had their odometers tampered with.
SOLUTION: Compare the mileage on the odometer with the mileage indicated on the vehicle’s maintenance records and get a free CarFax odometer check.
6. Psychological Tricks
TRICK: Many car dealership tricks are psychological. If you’re trading in your own used vehicle for a new one, a common method dealers use to get you to diminish the value of your vehicle is by using psychological tricks. They’ll have you walk around the car with them as they point out every single scratch, ding, dent, and worn-out part. They may utter some comments under their breath—just loud enough for you to hear and make you question the value of your vehicle. When starting the vehicle, they may pretend to hear a weird noise. Their methods are all designed to prepare you for a low-ball offer.
SOLUTION: Just realize what’s going on, and stick to your guns. Use negotiation techniques and don’t worry if they try these tricks on you. As long as you shop your trade-in to multiple sources, you will minimize your chances of being ripped off.
7. Claiming You Have a Bad Credit Score
TRICK: This is when a dealer claims your credit score is bad and you won’t qualify for a low interest rate. The dealer is banking on the fact that many car shoppers don’t check their credit scores before purchasing a car. The dealer is then able to arrange a loan for you with a higher interest rate and a bigger commission for themselves. If your credit score is above 700, you should be able to qualify for the best rates.
SOLUTION: Always check your credit score and credit report before applying for a loan. Not only will you be prepared for this scam, but you may find errors that you can easily fix and improve your score.
8. Shell Games
TRICK: The salesperson finds out what your hot buttons are and exploits them. If you have a trade-in, and they know you want a certain price for it, they will offer you what you want, but at the same time will raise the price of the new car. If they know you want a certain monthly payment, they’ll make sure you get that, but they will extend the loan term so you end up paying more over the long-term. There are all kinds of shell games that happen at dealerships.
SOLUTION: Negotiate each portion of your car purchase separately. Shop your trade-in to multiple dealers, shop for an auto loan among multiple lenders, and compare new car prices with multiple dealers. Don’t let them bundle everything into one big deal.
9. Wearing You Down
TRICK: Car dealers know the longer you spend at the dealership, the more likely you are to accept an unfavorable offer. They will wear you down by delaying everything. When negotiating, the salesperson will visit the manager to review your offer, but won’t be back for 15 or 20 minutes each time. All they are doing is goofiing off in the break room and wasting your time.
SOLUTION: This is simple: never negotiate price at a dealership. It’s best to do it via phone or online.