Car dealerships are not immune from pulling tricks out of their sleeves – things like manipulating you with rebates and creating new ways of inflating payments. If unscrupulous car dealers try these tricks on you, be prepared to fight back.
Here’s a quick list of car dealer moves to watch out for:
Getting a monthly payment price out of you – Any slippery car salesmen knows that once you offer up a monthly payment number, they’ve got you over a barrel. Car dealers know that if you can pay $250 a month, then $300 a month is not only in play, but a likely outcome.
Best bet: Don’t mention monthly payment numbers until a final vehicle price is on the table (or at least the dealer’s best offer).
Watch for the “rate shuffle” – Some car dealers that handle their own financing take money out of your pocket by getting financing from a lender at one interest rate, but offering you a higher rate – and pocketing the difference.
Best bet: Make sure you get a copy of the lender’s original loan offer, and double back and confirm the rate by phone, if you have to. Better yet, handle the financing yourself. You can track down good deals at manybanking.com.
Watch out for the “closer” – Most car dealers have a top-of-the-line salesmen called a “closer” who comes in at the end of the deal, often after you’ve already agreed to a price, and try to get you to agree to costly extras that can add hundreds or even thousands of dollars to the price of your new car. A good closer, for example, knows you have a young family, and will try to talk you into pricier tires (even though the ones on the car you agreed to are just fine) as a “safety” feature for your family.
Best bet: You are under no obligation to add one penny to the price of your new car - even under a withering sales pitch from a closer. Stand fast and hold your ground. Better yet, threaten to walk away unless the closer does.
“Padding” the contract – Car dealers are not above pushing unwanted extras, like rust-proofing or vague “service protection” packages that you don’t really want or need.
Best bet: Make sure to review your new car purchase contract, line-by-line, to make sure you weren’t blindsided by unnecessary options, warranties, or features you didn’t request. If you see a fee for something you didn’t request, “x” it out – and deduct the cost from your purchase price.
Avoid the “bait and switch” – Car dealers are famous for advertising hard-to-believe specials that aren’t on the lot by the time you get down to the dealership. A cynic might wonder if the super-car deals advertised in the Sunday paper ever existed at all.
Best bet: Hold a dealer’s fee to the fire by calling before you visit the lot, and ask if the deal is still available. Have the car’s vehicle identification number available, which should appear in the dealer’s advertisement. If the answer is “no” (and don’t be surprised if it is), you’ve saved a trip you didn’t need to make – and an aggressive sales pitch on higher-price cars you don’t care about.
Also, watch out for the old credit score scam, where dealers try to get you into higher-financing programs by telling you your credit score is too low to qualify for the best deals. Make sure you have a copy of your credit score in your pocket before you visit a dealer – then try not to smile too much when you flash your 720-credit score in the salesman’s face.
These days, car dealers should be on their best behavior, given the weakened state of the automobile industry. But sometimes it’s hard to teach an old dog new tricks – so be on your toes on your next trip to the dealership.
—For more ways to save, spend, invest and borrow, visit MainStreet.com.