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Wednesday, May 11, 2022

10 Car Dealer Tricks to Avoid

 By Catherine Powell

Image courtesy Pixabay

Buying a new or used car is expensive enough these days.  According to Money Magazine, the price of an average used car jumped to $29,969 in 2021.  That's about the same price people paid for a home back in 1972.  During the past 50 years, while prices for just about everything have soared, the one thing that has remained practically the same are the tactics used by underhanded car dealers.  If you're thinking about purchasing a vehicle, below are 10 tricks you need to avoid if you don't want to be taken for a ride.

#1: The Old Bait & Switch - This one's been around for as long as cars have been bought and sold.  You see a come-on ad for a vehicle that sports a price that seems too good to be true.  You race on down to the dealer only to discover that the car in the ad is no longer available.  However, there's a similar model that the dealer will be only too happy to show you, provided you're willing to pay more money for it.  The moment a salesperson offers to show you something other than the vehicle you saw in their ad, run don't walk to the nearest exit before he or she tries to sell you the Brooklyn Bridge too.

#2: Don't be Done In by the Trade-In - Another way that a car dealer can get away with murder is by offering you a trade-in value that's far less than your vehicle is worth.  In years gone by this was easy to do since few people knew the value of their vehicle.  Today, it's a snap to point and click your way to find the value of any car, van, or light truck.  It's also easy to sell your vehicle privately to gain ground on the difference between the trade-in value and the used car value, the latter of which is always higher.  Why let the dealer make all the money on the deal instead of you?

#3: The Devil's in the Details - So, you got the dealer to agree on the price you want to pay for the vehicle and are ready to sign on the dotted line before driving off the lot?  Not so fast.  Besides the retail price,there are a myriad of other hidden fees that some dealers will drop on you at the last minute to try to get you to pay over and above the agreed upon price.  These can include prep fees, documentation fees, and key protection fees, just to name a few.  If any dealer tries to gouge you by adding on a lot of spurious fees at the tail end of the deal, your best bet is to end negotiations by heading for the door.  This will either get the sales manager to reconsider the deal or it will give you a second chance to get the deal you want with another dealer.

#4: Extended Warranties - Another way some dealers will try to get you to pay more for a vehicle is by getting you to opt for an extended warranty.  Even though repairs on vehicles aren't exactly chicken feed these days, most vehicles come with some form of warranty that covers most of what can go wrong in the first 5-10 years of ownership.  A study conducted by Consumer Reports showed that only 10% of car owners wound up benefiting from extended warranty protection.  While auto repairs aren't cheap, these warranties don't include routine maintenance.  So you should think twice before paying more than you have to for a warranty.

#5: Avoid Expensive Add-Ons - Another way for a dealer to reap more profits without ostensibly raising the price is by talking the buyer into okaying expensive added services.  Things like VIN etching which purportedly makes stealing your car dicier for thieves is a waste of money since a chop shop can get around the etched surfaces and you can DIY it with a kit for around $20.  Paint sealants, rust proofing, and upholstery protection are other big profit makers for dealers which aren't worth the price you pay for them.

#6: Do you really get what you pay for? - Not always if you opt for dealer financing.  If you have decent credit, you shouldn't need dealer financing.  Better to ask your credit union or bank about a car loan.  While dealer financing is available, there are several ways that a dealer can turn what seems like a good deal into a bad deal.  The worst trick is what's called the yo-yo scam.  The way it works is a dealer talks you into letting them finance your vehicle.  You drive it home and enjoy it for a few weeks.  Then the dealer's finance manager calls to tell you that the financing fell through and you have to either return to the dealership to sign a new finance agreement (which will be more expensive than the one you originally signed), or you'll have to return the car and lose your down payment.  Other financing tricks include marking up the interest rate instead of offering you the low rate you really deserve.  Since many unscrupulous dealers work with third party financing, this provides an incentive to add a point or two to the loan which they'll pocket before paying the finance company the true percentage of the loan.

7: Are you in the driver's seat if you prearrange car financing? - Not necessarily if you let a dealer know about it.  A lot of the profits earned by dealers aren't just from buying and selling vehicles.  They make a big piece of the pie from the finance side of the deal too.  If a dealer knows you've already lined up financing, you may find that you won't be able to get the best deal.  Better to negotiate the price first and leave the discussion about financing for later.

8. Are you getting your four squares? - Another underhanded tactic that's been used for decades is called the four square tactic.  A salesperson will break out a blank sheet of paper and draw four squares on it.  Into each square will be placed the car's price, the trade-in value of your vehicle, the down payment, and the monthly payments.  A salesperson who uses this tactic can then alter the figures in any or all of the four boxes to make it look as though they are improving the deal to your benefit.  What they're actually doing is trying to confuse you so they consummate

 the sale while giving the dealership the best deal.  In my opinion, if you ever see a sales rep draw four squares on a piece of paper, head for the exit as fast as your feet will carry you.

9. Pulling the Leasing Lever - Don't get me wrong, leasing isn't a bad idea for some drivers.  You just have to be aware of the fine print on the leasing contract.  One of the most restrictive is the amount of miles you are permitted to drive per year.  If you exceed the amount, you will find yourself paying through the nose for penalty mileage.  Another thing you should avoid is paying a big down payment for a leased vehicle.  What you may not know is you will not only be taxed on any down payment you make, but if the car gets totaled while the lease is in force, you'll be out your down payment.  If the dealer refuses to let you lease a vehicle without a down payment, either walk away from the deal or ask the dealer to roll the down payment into the monthly lease payments.  (This way you won't be on the hook for all the taxes up front and you won't be out the entire down payment if the car is wrecked before the lease is up.)

10. See Dealer for Details - While competition is good for consumers, you have to make sure that you actually receive the deal you've been promised. Some dealers will advertise special incentives to get you to buy your next vehicle with them. This may include free oil changes or tire rotations, free maintenance for a specified period or some other come on.  If the offer comes with the caveat "See Dealer for Details", you may come to find that you have to jump through so many hoops to qualify for the offer that it may be next to impossible for you to take the dealer up on it.  Or, it may prove more costly than you had assumed.  Just like the old bait & switch tactic, many of these offers are only designed with one goal in mind: To get you inside the dealership.

Catherine Powell is the owner of A Plus All Florida Insurance in Orange Park, Florida. To find out more about saving money on all your insurance needs, check out her website at

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