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Dealer Tricks To Watch Out For:

Don't fall for any:
Just because they write it down, does not mean it's true. The pen is mightier than the sword, and they put it to use. It's strange, we don't question figures that are written down. Our brain tricks us into thinking it's true. They keep on writing amounts, and you don't realize how powerful the written word is. They keep on nibbling at your offer, bumping you up, until you give in. But don't give in! Remember, your advantage, you can just get up and leave. That is your powerful weapon. It may frustrate you to use it, but if the deal is not worth it, walk away, no matter how badly you want the car. There will be other cars, and other deals, and some dealer will be willing to work with you. There's no better feeling than to have a scamming salesman call a week later and you tell him you signed a deal somewhere else. You can actually hear their jaw hit the floor. "You bought another car?!!!!" It's one of life's precious moments.

"We'll Beat anybody's price or we'll give you $500!!!!"
Sure we will. Just bring us a written buyers order from any dealership and we'll beat it. The problem is that few dealers give you this paperwork to go shop around, so this is why they can all get away with this. I'll bet no dealer has ever had to honor this one. It's the same with TVs. Most appliance stores will pay 100% of the difference if a competitor is less, but call their bluff. Circuit City gets different model Sony's than Best Buy, or Burdines, or Sound Advice. So it's rare to find the same TV at all the stores.

"If you don't buy these options, I won't get paid"
After you wipe the tears from your eyes, your response to a very unprofessional comment like that should be that you are not going to buy something you don't want just because "they are not going to get paid." Tell them to get a better job that does pay.

"No Payments Until...."
Here's what can happen. You see an ad that says no payments for 6 months. You go to the dealer to buy the car, then they tell you it was a typographical error in the ad, the newspaper will be printing a retraction, and it's actually only 2 months, not 6 months. That's nothing more than a nasty lie. Newspapers would go out of business from refunding all the ad fees for "typographical errors" that dealers lie about. Many ads have fine print saying "Not responsible for typographical errors". If they tell you it was a typographical error, tell them so was the deposit check, and grab it back on your way out the door.

"Sure, we have that green Mazda car you're looking for, come on down!"
You call the dealer asking if they have a green Mazda MPV. Sure, come on down we got it. But during your trip down there, they broke world record timing in closing a deal on that green Mazda. But look over here, we have one that's only $499 more...

"You're not going to find it cheaper anywhere else..."
Do you know how many times I've heard that as I walked out the door? It's their last ditch effort, usually futile. Historically, every time a salesman has said that to me, they've been wrong. But I also know when a deal is as good as it's going to get, and you should never be embarrassed and back to accept their offer. Just walk and say "You were right, I couldn't find it cheaper.

The Old "salesman gets a phone call" trick!
This was sent in by one of our visitors: "When I bought my car, he got a phone call at his desk. He talked just loud enough so I could hear him "...Why I have a young man right in front of me now that is about to buy it, I'm sorry. I will give you a call if he doesn't get it. What is you number sir..." I hadn't even made up my mind, but he did for me".

They can put the wrong date on your paperwork
This happened to one reader. "When I completed the draft authorization and gave it to the finance manager the receipt he gave me was dated 2-3-98 instead of 1-3-98. According to the terms of the sales contract, if I didn't provide the funds by 1-5-98, Toyota would provide the financing at 10%, over 2.5% points higher than my financing!" Because of the dealer's "clerical error", our friend could have ended up paying much more for his loan.

Always verify the correct date on every document the dealer gives you.

They can lie about factory holdback
Some dealers rely on the ignorance of shoppers to scam them. Few people know that holdback is a check equal to 2-3% MSRP, paid to the dealer by the factory once the vehicle has been sold. This is income for the dealer that effectively reduces his cost of the car. Yet some dealers will tell the customer it's a dealer expense, and make the customer pay for it, and now the dealer has collected twice for the holdback. Many invoices actually itemize the holdback, but the dealer gets it back.

They can lie, telling you credit life insurance is required.
Credit life is not required on car loans. People with bad credit are usually the victims of this scam. The salesman tells them they have to pay 18% interest, which is fair for someone with bad credit, but they'll lie saying they must buy credit life insurance. In Florida this is illegal, yet it still happens all the time. It's probably illegal in other states too. One reader was "required" to purchase the extended warranty, or the interest rate would be jacked up. If this happens to you, report the dealership immediately, or better yet, ding them on the customer satisfaction survey.

Watch out for the "turnover" or "TO" scam!
They use this one all the time. They keep switching salesmen to work on you and wear you down. It's harassment, and it's a waste of time. They have no intention of working with you, they just want to wait you out like David Koresh. This is called the turnover, as they keep turning you over to the next aggressive salesperson. Put a stop to this right away. Tell them you are on to the scam are walking if it does not cease. This is why I tell you to leave in a half hour if they don't accept your deal.

Watch out for the hidden rebate!
I see this tactic at dealers, and in newspaper ads. They list a price that is less than MSRP, making you think you got a good deal. Even the ads show good prices and in the fine print it says "prices include rebate". Some ads list a selling price but have fine print stating "dealer retains all rebates".

Ask them on EVERY car if the price includes the rebate.
Ask how much the rebate is, and strip the rebate from the price, exposing their deal for what it really is: Non value added. If you remove the rebate, you'll see they may be charging MSRP. For example, a car has an MSRP of $12000. The dealer's "No Haggle" tag says $10500. Wow, this is a good deal. But the car has a $1500 rebate. Now you exposed their deal for what it really is: They are charging you MSRP, which no one should ever pay. They'll say, "We're giving you a $1500 rebate". Not exactly. The factory is giving the rebate. So far the dealer has contributed nothing to the deal. It's time to make them give up some profit just like they expect you to give up your cash. Fill out the rebate and have it mailed to your house from the factory in 6 weeks. This way you know for sure you get credited properly. They like to steal rebates if the buyer is unaware it exists.

Should I take the rebate or the low interest rate?
It depends on the loan amount and term. For loans under $15000, rebates at $750 or above usually beat a low interest rate. Dealers bait you with a choice of a rebate or a low % loan. Compare the numbers, you'll find that sometimes using a rebate to reduce your principal can save you more money than a lower interest rate. They tease you with this lower rate, hoping you'll take the bait, and they make a few hundred more dollars by financing you. And what if the rebate was $1500, and they told you it was only $750, and you sign it over to them in exchange for a low APR. Now you just lost $750. You can get fleeced here, because of their "Subject to approval" or "with approved credit" weasel clauses. The dealer can call you up a week later to charge you more interest because you "didn't qualify", but you also forfeited your rebate. This can be a legalized way to steal your rebate. You may want to have the rebate mailed directly to you so you know you got it. Do the math to see which is cheaper. Here's some examples from different loans, applying the rebate as a down payment on the loan.

Note the monthly payment is lower as the rebate increases past $750 on loans < $20000. It also depends on the interest rate.

Never give a deposit until you and the Sales Manager have signed the buyers agreement!
The salesman acts like he's on our side now. I've heard this one too many times:

"let me take this into my boss and see if he'll sign it. But I can't go in there empty handed. I know he'll sign it if he thinks your serious about buying this car. If you'll just give me a deposit check to show you are earnest, I'm positive he'll approve the deal"

DON'T GIVE THEM ANYTHING! You don't have a deal yet, so why give them any money? If you want to quit negotiations and leave, you have to get your check back. They do this scam so you can't leave. Tell him, no deposit until there is a signed deal. "But he won't approve deal unless he sees you're serious" Tell him the fact that you are making this offer is serious enough, you're tired of playing games, they are wasting your time, and you are onto his "deposit scam". Tell him you are walking. Trust me, he won't let you walk out. Don't give them any money until both parties agree to a final cost in writing, all fees disclosed.

Asking for you to give a deposit check does two things for them. First, it plants a foot in your door. You wrote a check, now you're committed to buy. They could try to further jack up the price and you are now psychologically conditioned to purchase the car that you just wrote a deposit check for. The other thing the deposit check does for the dealer is make a psychological hostage out of you. The only person that should be asking for a check is the finance manager in the finance office, after you have agreed in writing on a purchase price.

Besides, the salesman has no intention of getting your offer approved. He's coming back with the sales manager who is even better at selling, and the two of them will work on wearing you down. They will play good cop bad cop, just like a police interrogation until you crack. Nobody gets any money from you until an agreement in price is reached. Thus endeth the sermon.

If the salesman leaves you alone in the office, don't discuss anything!
When they go to "get your deal approved" by the sales manager, don't discuss anything privately in the office. They could have set the phone to intercom mode. Now the salesman and his boss are listening to every word you say from another office. Why do you think they leave you in there alone for so long? 30 seconds after the salesman leaves you, move out to the soda machine where you can conference until they come looking for you. Better yet, if he leaves the buyers order behind, tear off the bottom copy and place it in your folder. If you decide to leave, now you have official pricing that you can use to battle with at other dealerships. Remember, they give out written quotes that are MSRP.