When it comes time to buy a new car, it's a big purchase for any person or family to make. The buyers first have to sit down and make sure that they're able to afford the additional costs that a new car brings. These costs can create a large new burden on the household budget. This cost will include a monthly payment plus the cost of the full coverage insurance that'll be required by the bank. Once it's been figured out, it's time for the buyer to go shopping.
Nowadays, it can be most convenient for many buyers to head to a dealership or an auto lot in order to find their new car. These places will have the largest variety of vehicles and are used to working with people and the banks to get loans approved. These auto dealers are also going to offer options such as warranties and other guarantees that buyers won't get from private sellers. The one issue that some shoppers have to deal with is wondering whether or not they're dealing with dishonest salespeople.
This is stress that many shoppers deal with when it comes to shopping for a car. It's best for people to do as much research as possible about the type of vehicles they're looking for and the going price ranges for these cars. It's also helpful for them to understand the different types of dishonest tactics that dealerships can employ in order to rope people into a so-called "good deal." Here are 24 tricks that dishonest car dealers will use in the process of trying to sell a car.
24 The "Facts" They Falsify
Business Insider listed some great scams that some dealers will use, including falsifying the facts surrounding a particular car.
One of the tactics includes lying about little things about the car such as there are only a limited number available in the area or in the given state.
They'll also try to pull the line that "someone else is interested in this same vehicle," so you better decide quickly. These types of lies can get people to sign on the dotted line before they're actually ready to do so.
23 Price Based On Your Trade-In
Many people will use their current vehicle as the downpayment on the new one. Many people will have an idea of what they want to get for their trade-in, and the dealer will many times accommodate this value. According to Business Insider, when they do this, they'll increase the overall price of the vehicle. This will ultimately nullify the good trade-in value that the buyers received for their current vehicle. Because the dealer agreed to the trade-in value, the buyers feel as if they're dealing with a dealer who's a good business person.
22 "This deal is only good for today."
Interest.com also gives some great examples of the types of wool that dealers will try to pull over the eyes of a buyer. One of them is telling a shopper that a particular deal is only good on a particular vehicle for that day that the shopper just happens to be shopping for. This adds pressure to shoppers to feel like they need to get that car before they leave the lot.
This also keeps the shopper from checking other lots because many times, when shoppers leave the lot, they're probably not going to return.
A dishonest car salesperson will do what they have to in order to keep the shopper on the lot.
21 Posing As Private Owners
This is quite a common practice for dishonest dealers. Business Insider describes these types of dealers as "curbstoners." These dealers present themselves in classified ads as private owners who are just trying to sell their car. When the buyer shows up to the address, it's a dishonest little lot. These dealers, many times, are selling vehicles that reputable, honest dealers wouldn't go anywhere near. These are normally cars that have some sort of history that the dealer is trying to hide from the buyer just so they can sell it to make some money (and to avoid the FTC laws governing car sales).
20 "We'll pay off the remainder of your old loan."
This is something that's going to sound incredibly enticing to any car buyer. Interest.com describes how they're able to do this without a buyer ever even noticing. Car sales require an extensive contract that most people don't understand, and all they're focusing on is their monthly payment.
What the buyers don't realize is that the cost of the car was raised by the amount of their previous loan.
The dealers are able to give buyers what they want in a monthly payment while easily adding on the remainder of the previous loan throughout the complicated contract.
19 Adding On Fees The Buyer Never Knew About
When buyers go to negotiate with a dealer about the car that they're interested in, they focus on the monthly payment or the overall price of the vehicle. Once the buyers sit down to put their name on the dotted line, there are a bunch of other numbers in there that they never even knew about. Dave Ramsey, a financial advisor with a great money blog, discusses how the dealers are able to pull this off. These fees are in the form of processing, titling, licensing, and registration fees. These fees have nothing to do with the price of the car, but they have everything to do with extra profit money that's coming directly out of the pockets of the buyer.
18 They Can Also Hide Add-On Fees In The Monthly Payment
Dealers can hide money just about anywhere like leases (we'll talk about these tricks later) and monthly payments. Dealers can do this when buyers are negotiating based on the monthly payment they're looking to get out of the deal. As Business Insider discusses, if a buyer is looking to make a $400 monthly payment, they can find a lender that'll agree to $300, and that leaves them with $100 worth of add-on fees that they can take on. These types of things can include extended warranties and gap insurance that were never agreed on by the buyer.
17 Focusing On The Monthly Payment
Although the overall price of the car is important to buyers, many of them are going to want their monthly payment to fall within a certain range to suit their budget. According to Dave Ramsey, dishonest car salesmen will prey on this fact, and they'll open up the conversation by asking you about your monthly payment needs.
Once they realize the importance of the monthly payment to you, they can stretch the length of the loan (without a buyer's knowledge) in order to get that payment to make the buyer happy.
Buyers need to realize that the dealer also makes money from the financing. It's as if the dealers and the lenders are working together to get a buyer to make monthly payments for as long as possible.
16 Preying On Those Who Are Less Knowledgeable About The Process
This is a common tactic that dealerships will use to make as much money as possible. Less knowledgeable buyers will go to the lot and will come right out and tell the salesperson that this is their first time buying a new car, and this will signal the salesperson. Because the buyers don't know how the process works or didn't do their research before shopping, the dealers are going to be able to get away with so much more than they would with a person who's well informed. They're going to be able to change numbers, create add-on fees, and do anything else that they want to in order to make as much money as they possibly can. This highlights the importance of patience in the process and doing your homework before you go to buy a new car.
15 Altering The Numbers On The Odometer
Many drivers believe that digital odometers are very difficult to alter, but this isn't the case at all. As Business Insider highlights, there are tools and special software out there so that shops can repair faulty odometers. Some dealers will use the tools and software for nefarious reasons. As most people know, one of the factors in the price of a vehicle has to do with how many miles are on it.
If the dealers reduce the mileage on the odometer, they'll be able to charge more money for the car.
Not only is this illegal, but according to the National Highway Traffic Safety Administration, this could also be costing consumers billions of dollars every year.
14 The Bait And Switch
It's quite common for dealers to advertise particular vehicles that seem to be a great deal, and then, when the buyer gets to the showroom, the car has been sold. Business Insider explains that this is just a way for the dealership to get people into their showroom. Another way that this can happen is when the buyer gets to the lot to look at the car that they saw in the advertisement, it's a base model car with no air conditioning and crank windows. People never want to buy this type of car. Once they get to the lot, they figure they'll look around while they're there, and then, they're looking at a car that's $5,000 more than the car they originally came there to look at.
13 Pressured Selling
Dave Ramsey refers to this as "hard selling." This type of scenario occurs when the buyers show up to the lot and the salespersons immediately start in on their sales pitch.
The buyers will tell them that they're just there to "look around," but salespeople and dealerships know that 9 times out of 10, such people are in the market for a car.
They'll prey on this, and they'll continue to pressure you, and they'll know exactly what to say to buyers in order to get the buyers to let their guard down. Once the buyers' guard is down, the conversation can begin, and before the buyers know it, they're going on a test drive due to a pushy salesperson.
12 Getting Repairs Done Before They're Really Needed
Dealerships commonly have a repairs section in order to maximize their profits and honor the warranties and guarantees that they offer with vehicles. "The service center makes lots of money on replacement and worn parts such as brake pads," according to Business Insider.
If an owner went out and bought these parts at an auto parts store and brought them to a private mechanic to fix, the totals costs would be so much cheaper.
Many times, the service departments will recommend repairs that really aren't even necessary just so they're able to make as much money as they can on each customer's vehicle that rolls into the garage bays.
11 Double Payments
There are numerous ways for a dealership to make money from leasing vehicles. Business Insider talks about one way that they get people to make 2 first payments. Most leases require people to make the first payment at the initial signing for the vehicle. Sometimes, this payment is included in the downpayment, and sometimes it isn't. Dishonest salesmen will include it in the down payment and not inform the lessee. Then, they'll charge the signer the first payment after receiving the down payment, and thus, the lessee has just made two first payments and never even knew it.
10 Getting A Shopper To Sign A Lease From The Beginning
Interest.com describes many reasons why leases aren't always a great idea, but many dealerships will push a shopper to sign one instead of buying. They make it look attractive because the shopper can get a nicer car for a much cheaper monthly payment.
The problem with this is that the dealership is going to make money from your payment, and then, at the end of the lease, the vehicle isn't even owned by the lessee.
The dealership knows that the lease will end, the lessee will bring the car back, and this lessee will need to either extend it or sign a new one. There are also numerous penalties that they can charge if there are any issues with the vehicle at the time of return. Make sure that before leasing a car, it's the right situation for you.
9 Switching The Numbers In The Lease
A lease is an incredibly complicated contract that most people don't understand unless they take the time to research and understand what a lease actually entails. Business Insider describes a scenario where dishonest salesmen will outright change numbers in an already-confusing lease contract that a majority of signers will never even notice. Business Insider cites a couple of common ways that dealers can do this, including changing the capitalized cost. When this happens, the dealership is draining money from the lessee without ever discussing it with the lessee.
8 Hiding Fees and Add-ons Within The Lease
Due to the complexities and the length of leasing contracts, most signers never read them front to back, and if they do, they usually don't understand most of it. This ambiguity allows the dealer to hide unnecessary and ridiculous fees in the lease.
Pinstriping and extended warranties are two of the things that Business Insider cites as a couple of the add-ons that may be hidden in there somewhere.
These are ridiculous because they're not painting the car and, thus, not pinstriping it. Plus, the car is usually covered by the manufacturer's warranty for the duration of the lease in the first place.
7 The Price of The Vehicle When Leasing
Most car shoppers don't realize that just because they're leasing a car doesn't mean that they don't have the freedom to negotiate the price. This is one of those things that plays into the lack of knowledge people have about leasing a car, and dealerships will prey on this little-known fact. People who are going to lease a vehicle feel that they have to take the price of the vehicle that the dealership gives them. The price needs to be negotiated to get a better or the best deal. If it's not negotiated, the dealership is going to charge top dollar for a vehicle that could've been haggled down to a much lower price.
6 Expensive or Unnecessary Add-Ons
Some dealerships will try anything they can to make as much dishonest money as they possibly can. They'll go so far as to offer add-ons and additional features that they'll install in the vehicle. They can offer things such as roof racks and upgraded sound systems that are usually cheaper when shoppers buy them from an electronics store or an auto parts store on their own. Interest.com cites VIN-etching as one of the newest add-ons that dealers are offering as a fraudulent upcharge on the cost of the vehicle. Buyers should research the cost of these types of things before they ever hit the lot.
5 The Dealership Version of Good Cop, Bad Cop
This is a sales tactic that a salesperson will employ in order to gain a shopper's trust and to wear them down at the same time.
They'll pit their sales manager as a dishonest or difficult person to deal with, which, in turn, makes them look trusting to deal with.
They'll seem as if they're talking trash about the manager so that the shopper wants to do their business with the salesperson and is more trusting of what they tell them. This trust makes it much easier for the salesperson to increase figures or sell the buyers on various add-ons that they really don't need.
4 Poor Credit
People with poor credit can be seriously taken advantage of when it comes to buying a car. One of the ways that this happens is due to a scam that Business Insider refers to as the "spot delivery scam." They assure the buyer that their financing and loan were approved by the lender. They then wait anywhere from a few days to even a few weeks, and they call the buyer back and say that the financial was ultimately denied and that they have to go through a lender with a higher interest rate. People with bad credit believe that their credit was to blame, and they have no other choice but to deal with the higher interest rate.
3 Contract "Mistakes"
Contracts can be extremely long with a bunch of numbers and wording that buyers don't really understand. Some dealers will take advantage of this fact and call the buyers and say that there was a "mistake" in the contract and that it needs to be adjusted. The problem with this, according to Business Insider, is that these mistakes always benefit the dealer.
These "mistakes" aren't mistakes at all; they're the dealer changing the vehicle cost, the interest rate, or the trade-in value that was originally agreed on.
It's basically the dealers adjusting the contract after the deal has already been reached and signed.
2 "Washing" The Title
Some cars are bought at auction at a very cheap price because they have a salvaged title. A salvaged title means that a car has been through catastrophic damage such as being flooded or totaled in an accident. When this happens, a dealer will buy a car from another state in order to hide the fact that this has happened to the car. The title is "washed" so that it doesn't reflect this salvaged status, and the car is priced as if the damage had never happened. Buyers end up paying a lot more money for the car than they ever should've, and the dealership makes a huge profit on the sale of a previously damaged car.
1 Tell A Buyer What They Want To Hear
One of the first rules of a car dealership is to tell the prospective buyers whatever it is they want to hear in order to get them into the showroom. Getting them to the dealership is half the battle for these car dealers. They have so many different ploys and tactics to use that they'll be able to get you into a car using one of their various "dishonest" tools. They'll do things like telling a shopper one price for their trade-in vehicle, and then when the shopper gets there, that value isn't going to happen. They'll make sure to sweet-talk shoppers into coming to the dealership via whatever way necessary.
Sources: businessinsider.com; daveramsey.com