OK we all know how most car dealerships try to scheme and frankly steal as much as possible from customers. Some do it with no shame, while others have no qualms in specific financial dealings with customers. I recently thought back to some of the interactions I’ve had with car dealerships and put together this interesting post. The point is to help people be more informed over how Car Dealer Shenanigans can eventually damage your future cash flow by persuading you to take on more than your wallet can chew.
Car Dealer Shenanigans:
The cheap car advertised is no longer available – Only used as a ploy to get you in the door
The car dealership cannot go any lower on used or new car prices – Actually they can go Lower
The contract will not match the verbally agreed upon price – all of a sudden hidden fees pop up
The down payment you gave is not fully represented in the contract – This actually happened to me
The APR for financing is changed in the financing office right before you complete transaction due to a credit issue. – A way for them to get a higher kick back from the bank.
They try to up sell you extra warranties when you don’t really need it –They are pressured by upper management to sell these by the dozens.
Always check the TruCar, Edmunds, or Kelly Blue Book Value and compare it to the Sticker Price as a negotiating strategy.
I wonder if some of these salesmen have a conscience because people are being taken advantage of every day. Granted not all sales people display unethical behavior as mentioned above, but when a salespersons pay is directly tied to an up sell or extra warranty, then chances are they will pressure you to buy it. When you give a specific down payment on a contract and it is conveniently forgotten that is considered predatory practices, so please take your time to read the contract before signing on the dotted line.
In conclusion a car is a car to help you get from point A to B, if you can’t buy a car that is 15% or less than your income you should really reconsider the purchase. Some people feel they can just get a luxury car on payments and manage it while giving up 30% or more of income. Transportation should never be so high, and once you realize this it will help you fund other important financial goals, which should always be placed above transportation.
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A Car is a mode of Transportation and it should be 15% or less income, once it goes over this amount it begins to take away from future financial security. – Rich Uncle EL
What kind of Car Dealer Shenanigans have you encountered while car shopping?
Rich Uncle EL
Like most people, I have encountered most of the issues noted at one time or another. My approach, now that I'm older, is to gather all the relevant information (e.g. trade-in value of my car, prevailing interest rates, invoice cost with desired options, etc.) before ever talking to a salesperson. Once I have all my information/numbers in hand, I reach out to the Internet sales team and start the negotiation online/telephonically. I don't go to the dealership until the deal, and all the numbers, are essentially agreed to.
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That’s a very smart tactic James. I hope everyone did it like that. It really does put power on the buyer side using those strategies. Good luck
Typically I try to buy from Craigslist because there's less hassle & next-to-new is what I try to buy. I ran into the hidden fees when I purchased my last car from a dealership, where they put the anti-theft stickers with the VIN number in all the hidden crevices in case the "Chop Shop" steals your car. I forget how much it cost, but it wasn't exactly cheap. When I figured it out, it was too late & the dealer said every vehicle gets that purchase. Even though I think remember seeing a piece of paper that said it was optional. It's okay, I got the money back as I said I would only buy the vehicle if they threw in a spare tire (1st owner removed it). They had to order it direct from Asia, plus got stuck in Customs & it cost them about $750.
I also detest the sales practices about monthly payments (even after you say several times I don't care about monthly payments only the total cost), how the salesman has a starving family at home, and whatever else they will do to make a sale. I chose not to buy from a dealership because the salesman & GM used all 4 common tactics to make a sale.
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That’s a good tactic, Craigslist and it will only grow as online transactions grow. I hear ebay is also expanding in car sale transactions. Good luck.
This is why they are commonly referred to as "stealerships"! I agree with Josh; there is no reason why you cannot get a great used car from private hands through Craigslist. I have had several times where we took our car in for maintenance at the dealership and they literally tried to take over $900 from us for something that should have cost $0 according to us laws enforced by the EPA (O2 sensor went out when car was less than 5-years old and less that 75,000 miles). They were literally breaking the law by trying to double dip and charge us and Toyota for the repair. I will NEVER EVER step foot on another car dealership!
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Hey Derek you dodged a bullet with that 900 dollar cost. We all need to find a reliable mechanic to be able to perform regular maintenance on any car owned. Thanks for the comment