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Tags: car dealership | what to know when buying or leasing a car

Lauren Fix, The Car Coach: 10 Car Dealer Tricks to Avoid

Maybach
A salesman shows a potential customer details of a Maybach 57 limousine, which retails between $380,000 and $574,000, on the high end. (Getty Images)

Lauren Fix By Monday, 09 May 2022 03:07 PM EDT Current | Bio | Archive

Car dealers are in business to make money, and most of them are honest. Sadly, some “play the game” and know the tricks that can be a trap.

Having “car smarts” is important to be prepared for potential situations where you meet a more aggressive salesperson who’s looking to close the sale and maximize their profits.

Here’s how to avoid these car dealer tricks.

1.)  The Credit Trick

A dealer may tell you your credit score won’t qualify for competitive financing rates. This may be true. The dealer is implying your credit is worse than it is and you’ll have to pay a higher interest rate.

Car Smarts: Find your credit score before you buy. Simply use Credit Karma or other apps.

2.)  The 3-Part Trick

Many people view buying a car as one transaction. It’s actually not. It’s typically three transactions rolled into one: the new-car price, the trade-in value and the financing. A dealer sees three as ways to make money.

Car Smarts: Look at each transaction the same way as if you were the dealer. That means you should negotiate each one separately.

3.)  The Payment Trick

The dealer will discuss monthly payments that seem affordable. They will typically factor in a large down payment or stretch the term of the auto loan to 60 or 72 months. Car dealerships do this with leases as well.

Car Smarts: Negotiate the price of the car rather than the monthly payment. Never tell the dealer what you can afford monthly. Stick to issue of price.

4.)  The Sticker Price Trick

The vehicle price listed on the window is what’s known as the manufacturer’s suggested retail price, or MSRP. With the chip shortage, you need to look for market adjustment prices or similar wording. Some dealers are overcharging buyers.

Car Smarts: Finding the car is half the battle. A good dealer will not add in extra fees. While it is true that some really hot cars go for above sticker price, this isn’t true for everyday models. Don’t be afraid to walk away.

5.)  The Holdback Trick

Manufacturers often offer loyalty or conquest discounts. These incentives are part of something called holdbacks, which is money back to the dealers. This typically isn’t discussed.

Car Smarts: Loyalty or conquest discounts are larger for more expensive vehicles. Don’t leave money behind. Find a dealer that wants your business. It doesn’t hurt to ask for any vehicle, and to inquire about the manufacturer’s conquest discounts, or holdbacks.

6.)  The Financing Trick

Getting a call after the purchase that your financing isn’t accepted, is a tactic some dealerships take. Don’t fall for this. Dealers know almost instantly your general credit range and if you qualify for financing. They try to get you to sign you up for a loan with a higher interest rate because, according to them, they just found out you didn’t qualify for the lower rate. This is an outright scam.

Car Smarts: Never leave the showroom without signed contracts that spell out every detail and with every blank filled in.

7.)  The Rollover Trick

It’s tempting to trade up to a more expensive car even before you’ve finished paying off the car you’re currently driving. Some car buyers roll over the remaining payments on their current car into a new car loan or lease. The trick is that you’ll end up owing more on the second car than it’s worth. It’s called being “upside down” on the vehicle. If it’s totaled in an accident or if you decide down the road to trade it in, you’ll end up covering the remaining amount of the loan. (Refer back to point #2 on treating each financial aspect of the lease as a separate issue.)

Car Smarts: Don’t roll over an old car loan into a new one.

8.)  The Balloon Trick

Some dealers will encourage you to purchase a car for unrealistically low monthly payments. Sure, this sounds good on the surface, but it will leave you with a large balloon payment at the end of the loan period. This is the price you’d pay at the end of the lease.

Car Smarts: Be wary of balloon payments and know that your financial situation may change by the time the balloon payment comes due.

9.)  Bait-and-Switch Trick

The bait-and-switch trick is when you are looking for one car and the dealer manages to get you behind the wheel of a different one. This strategy is used to get you drive something that is available rather than something they don’t have available. Typically they try to get you in to a more expensive ride.

Car Smarts: Do your homework and know what you can afford. Go to another dealer that does have the car you want.

10.)  Contract Trick

Contract tricks are clauses tucked into the fine print that you might miss and likely wouldn’t even read. They might come in the form of changes to the loan term, add-ons that you never agreed to, or other services that can lead to significant costs.

Car Smarts: Read over the entire contract carefully. Ask about all charges, and make sure the terms are clear to both you and the dealer. Always keep a copy of the contract.

The Bottom Line

Buying a car is supposed to be a good experience. If you are being tricked, walk away. Don’t overpay for your vehicle. Knowledge is power. Remember, what the big prints gives, the small print takes away.
_______________
Lauren Fix, The Car Coach®, is a nationally recognized automotive expert, media guest, journalist, author, keynote speaker and television host. A trusted car expert, Lauren provides an insider’s perspective on a wide range of automotive topics and safety issues for both the auto industry and consumers. Her analysis is honest and straightforward.

Lauren is the National Automotive Correspondent for Newsmax TV, a conservative news net carried in 23 countries and in over 35 million U.S. cable/satellite homes. She is also The Weather Channel and Inside Edition’s auto expert. Lauren Fix serves as a juror for the esteemed North American Car & Truck of the Year Awards (NACTOY).

Lauren is The Car Coach columnist for Parade Magazine and eBay Motors and writes a weekly column. She also appears weekly on USA Radio’s DayBreak USA.
Lauren is the president and founder of Automotive Aspects, Inc., a consulting firm with a wide range of multi-media services, including media consulting, broadcast messaging strategy, public relations and television production.

Lauren is the author of three books: most recently, Lauren Fix’s Guide To Loving Your Car with St. Martins Press, Driving Ambitions: A Complete Guide to Amateur Auto Racing, and The Performance Tire and Wheel Handbook.

Lauren’s broadcast experience includes Oprah, Live! With Regis and Kelly, The View, TODAY, 20/20, The Early Show, CNN, FOX News, FOX Business, MSNBC, HLN, TBS Makeover and a Movie, Inside Edition, ESPN, TBS, Discovery, Speed and NPR, to name a few. Lauren previously hosted four seasons of Talk 2 DIY Automotive on the Do-It-Yourself Network (DIY), was the National Automotive Correspondent for Time Warner Cable and hosted Female Driven on Lifetime TV.

Lauren’s articles and advice have appeared in USA Today, Good Housekeeping, Redbook, eBay, Woman’s World, Esquire, First for Women, InTouch and Self. She has also contributed content to Motor Trend, Truck Trend, Hot Rod, Car Craft and many other automotive publications.

Lauren is a member of the Society of Automotive Engineers (SAE), the Society of Automotive Analysts (SAA) and is an ASE (Automotive Service Excellence) certified technician. She inherited her love of all things automotive from her father, who owned a brake remanufacturing business and worked for many U.S. manufacturers. Lauren has been fixing, restoring and racing cars since the age of ten. She has been advising drivers almost all her life.

In addition to being a leader in positive consumer awareness and the automotive industry, Lauren is often asked to speak to groups around the world about her success in marketing, motivation, entrepreneurship, parenting and other lifestyle topics.

Lauren was named the 2015 WIN Award, 2013 SEMA Business Network “Mentor of The Year”; SEMA Business Network 2012 Woman of the Year; and awarded various Car Care Council “Automotive Communications Awards” in 2012, 2013 and 2014. Past awards include 2008 Automotive Woman Of The Year and 2010 Woman of Distinction – Entrepreneur winner. Lauren Fix was inducted into the National Women and Transportation Hall of Fame in 2009 – a very high honor for a hard working automotive professional.

© 2022 Newsmax Finance. All rights reserved.


LaurenFix
Car dealers are in business to make money, and most of them are honest. Sadly, some "play the game" and know the tricks that can be a trap. Having "car smarts" is important to be prepared for potential situations where you meet a more aggressive salesperson.
car dealership, what to know when buying or leasing a car
1415
2022-07-09
Monday, 09 May 2022 03:07 PM
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