Car dealers have been trained to sweet talk their clients to buy cars at any cost. It is therefore no wonder why many feel hoodwinked after making the purchase, especially when you must have coughed up some huge amount of money for a subpar product. Keep reading to check out some of the common tricks car dealerships use to real in unsuspecting customers.
Some of the most common car dealership tricks and how to outsmart them
False advertisements. Have you ever seen a car advert that promises heaven and earth at an affordable cost, only to get there in person to find out that the price is just the base price, not including any addendum that was advertised?
You may also be the car advertised has just been sold but you can pick up another model, which is pricier by the way?
These are ploys to get you in the doorway of their dealership in the first place. So, you should make your research and do it well, before you walk into a dealership, no matter how good the advertised offer or deal seems to be. Consult experts if you cannot make up your mind on your own.
Hidden fine-prints. Some ads come with tiny fine prints that most people don’t get to read simply because they have been enticed by the sweet deals in bold letters.
If you can take time to actually go through the ads, tiny letterings or not, you’ll know if you are eligible for the offer the dealership is advertising or not.
Negotiations and folding options into monthly payments. Another trick you should watch out for is when a dealership asks you how much you can afford to pay per month.
If you name a budget, say $250, they can sell you any car in their lot, at a higher price and for an extended period.
The other similar to it is the folding option. Sometimes they give you the base price and some extra charges. But instead of telling you the bulky sum that could send you running, they give you the option of paying maybe $20 per month. This way, they would get the amount they wanted originally and you would be none the wiser
To avoid this, know the type of car you want before you walk into the dealership and how much it should cost. So that, even if you are charged extra, it would be within a reasonable range.
Interest rate and money factor mark up. Some dealerships help you to get loans from financial institutions or banks which they negotiate on your behalf. The financial institution will then allow them to mark up the interest rate as the dealership wishes, you none the wiser.
The best way around this is to find out for yourself exactly what the bank is offering. If for any reason your bank has approved a loan and you want the dealership to give you a better deal, do not disclose the interest rate to them.
Otherwise, they could find a financier who would go for a lower interest rate but still give you a high-interest rate, although lower than what your bank is offering.
The money factor (MF) on the other hand is a part of the monthly payment you make to the dealership if you are leasing the car. Because the MF can seem so insignificant, some people overlook it making it easy for the dealership to rake in extra interests for themselves. However, if you multiply your MF by 2400 and it is above the prevailing rate, then you reserve the right to talk them down.
Extended warranties. People often allow themselves to be talked into extended warranties simply because it seems fair to take the car for repairs. But studies have shown that the extended warranty most time costs more than you would actually need for repairs in that period.
So, whether you are leasing the car or buying, don’t allow yourself to be talked into an extended warranty unless it’s your choice.
Unnecessary add-ons. Lastly, don’t allow yourself to be talked into unnecessary add-ons that will cost less if you do it in a local mechanic shop or you do it yourself.
Some of these add-ons are etching your VIN into the car window to prevent theft (that only works if the thief isn’t stealing the car to sell it for parts), or surface protections like sealants, fabric protection, and rustproofing. You can handle them on your own and at a lesser price.
Conclusion
There are many other tricks that dealerships use, one of which is the yoyo-scam, which is actually illegal. Others are the GAP insurance which you may get cheaper from your own insurance agent, negotiating trade-in with purchase simultaneously, sweet-talking buyers into leasing, and many more. All these can be avoided if you can only take some time to breathe and assess the situation.
How do you prevent yourself from getting hoodwinked by car dealerships?
The best and only skill is to do your research and do it well. Don’t just make a decision to buy or lease a car based on some sweet deal you saw in an ad. Know the pros and cons of every decision you want to make.
How can you outsmart a car dealership?
Try as much as possible not to show your hands financially, learn their lingo, research and know the price of the car you want to buy, read the fine print before signing any deal, etc.
