Car dealers have lots of tricks up their sleeve to ensure that they make the most money off of every sale they make.
If you don’t watch for these tricks, you may end up paying more to purchase and finance a new auto than you would if you’d been informed.
Watch out for these five popular car dealer tricks when you visit the showroom:
Lack of Information
There’s nothing a car dealer loves more than an under-informed car shopper who is trying to negotiate a buy based on nothing more than the sticker price posted on a car.
Consumers should work from the wholesale price the dealer paid and the standard transaction price, which are most likely thousands of dollars under the posted sticker price. Be the informed, smart consumer and check out the Kelley Blue Book or Edmunds.com to find this information.
Finance Charge Markups
While in price negotiations, car salespeople may say they can give you a better price if you finance the vehicle purchase through their dealership.
That’s a warning sign to be very wary — the salesperson is looking to regain any discount in purchase price through a big finance charge markup.
Never tell a car salesperson how much you can afford to pay a month. Dealers train their sales staff to ask potential car buyers what their monthly car budget is, and then they use that amount to sell you a more expensive vehicle than you originally wanted in order to get the most out of the dealer’s profits from your sale.
The car salesperson will calculate the highest number you can spend by continuing the payments for as long as they can and still make that payment.
They will then show you autos in that suggested price range, which is often more expensive than what you originally wanted to spend, while encouraging you that this car is well within your budget.
Deceptive Payoff Promises
Some car dealerships will lure you in with the promise to pay off the loan you still have on your current vehicle.
“No matter how much you still owe, we will pay it off” is a prevalent trick because your car is most likely worth much more than what you still owe on it.
These days, a lot of car owners owe more than the car is worth, which can lead to unethical dealers promising to pay off your loan — but then slyly add the remainder that payoff cost to your new car loan.
By adding the old balance into your new loan they’re banking on you paying more attention to the monthly payment and overlooking the total amount that you have financed.
The Deal is Good Today Only
Car salespeople will tell buyers that a seemingly good offer is “good for today only” to try and keep you from looking at other dealership’s showroom deals or to lock you into a car sale before you get cold feet or have second thoughts about the car you’re considering purchasing.
Don’t fall for this common trick — nine times out of 10, the same exact deal will be available the next day, week and even month.