Beware Of These Car Dealer Tricks When Buying A New Car

How do you outsmart a car dealer?

Buying a car is a huge occasional purchase that can, when considering all the available choices while weighing needs versus wants, can seem overwhelming. As with buying any big-ticket purchase, consumers can largely avoid bad deals and financial stress by arming themselves with the right information. There are distinct considerations for used and new car purchases, but these tips can be applied to both.

How to save money at the dealership.

Forget Payments, Talk Price. Dealers will try selling you to a payment per month rather than the price of a car. And when you go that route, nothing in the transaction is as transparent as it should be. Extending your loan period for a more expensive car will give you a lower monthly payment, but will probably mean you’re making car payments once your new car is no longer a ‘new’ car. It’s better to buy what you can afford in 48 or 60 monthly payments. In short, get your new car paid off while it’s still a new car.

Control Your Loan. For many dealers, the car or truck sale is simply the mechanism for the financing. And even with today’s low interest rates, dealers can make real money off interest alone, a disincentive to giving you a truly competitive interest rate. Getting pre-approved for a loan before you walk in the dealership door will let you know exactly how much you can afford, often at a better APR then the dealership can offer.

Avoid Advertised Car Deals. Dealerships will list their very best deal in the paper or online with little or no intention of keeping that specific deal in stock. Don’t be enticed by a car or truck you won’t be able to buy. Instead, do the research on the car you want and what it should cost. Starting out armed with information, via sites such as Autoblog’s Best Deal Program makes you a savvy consumer and, ultimately, provides a better, more credible transaction.


Preparation is half the battle

The most common lies are “This is a good price for the car” and “We’ll give you top dollar on your trade”. These use the principle of reciprocity to reduce your desire to learn more or ask for further discounts. The logic goes like this: “I already did you a favour, so you won’t ask for more, will you?” Many buyers don’t dare to ask for more as they succumb to reciprocity. That said, one would expect that with the wealth of information available online these days, salespeople would have dropped these tricks by now. The fact that they haven’t suggests that many buyers don’t do their research.

If you do your homework, you will be less bound by reciprocity if a car dealer quotes you a high price, as it will be obvious that the salesperson didn’t do you any favours or may even have tried to trick you. Sellers who see that you are well prepared will be less inclined to try to charge you more without adding value in some way. You may ask: “How do I know that this is indeed a good price?” or “Can you show me some information that proves that point?” or “Interesting you should say this is a good price, because my research indicates otherwise. Am I missing something that justifies your price?”

Playing on the principle of scarcity, another common lie is: “This is the last one in the area”, suggesting you better hurry up and buy it before it is too late. Again, this is information you can easily verify online or by calling a few dealerships in the vicinity. Better still, as you do your price research, use the opportunity to assess scarcity and figure out your next best alternative should negotiations fail. If stock is not a real issue, the dealer had better give you another reason why you should buy on the spot. Perhaps, you can turn around and reply: “While this may be your last piece, my research indicates that it is not the last piece on the market. However, it seems to me that you would like a quick sale. If so, I may be open to the idea if you give me a good discount. What do you say?”


Keep your trade-in to yourself

Dealers like to move money around to confuse car buyers about how much they are really getting in the deal. If you mention you want to trade in a car up front, you are opening the door to a shell game. The salesperson will focus on what you want to get for your trade and may artificially inflate the ‘trade allowance’ to get you to say yes. This leaves no room to negotiate on the price of the new car. Furthermore, the salesperson may ask to appraise your trade, taking your keys and literally holding your car hostage until you agree to a deal.

Don’t try to haggle

Salespeople spend their days selling. Chances are you won’t be as good at getting them to give you a great deal as they are at getting you to buy. So focus on what you can do: Force dealers to compete against each other by sending you their best offers.


Dealers want you to be more careful when you do a test drive

In a lot of cases, car buyers ask to test drive a car to be able to determine if the vehicle is the right one for them. So long as you hand over the proper ID and you sign the required documents, a car dealer would be more than happy to hand you the keys to the test vehicle. However, s/he would also like to exercise more caution when you drive. After all, there are a lot of cases of car theft that occur while a car is being test-driven.

During your test drive, be sure that you are aware of any suspicious person or object in your immediate area. And if something does not feel right, proceed to return the car to the dealership as soon as possible.


The 10-Second Trick to Saving Thousands on Your Used Car Purchase

Now that you know the dealer charges a premium, use this knowledge for your benefit! It’s not hard to guess that a lot of new car dealers don’t really like a lot of used cars sitting on their lots. So why not lowball them?

Start by picking out a good-condition used car of your choice. If you are looking for the most bang for your buck, going for a lightly used, two- to three-year-old car is the way to go.

If the car seems to hold up well in a leisurely road test, then take it to your trusted mechanic. They’ll charge you around $150 to go over the vehicle in very close detail. If the mechanic does spot problems, you can go back to the dealer and ask for a discount or simply walk away from the deal altogether. (If the used car seller balks at a request to have the car inspected, say adios.)

Assuming things go smoothly there, look up the car’s trade-in value on a site like, and use that as your basis for how much they paid for the car. For example, you find that the Toyota Camry you’re looking at has a trade-in value of $6,000, but they’re selling it for $9,000.

Now, it’s time to deploy your money-saving strategy. Here’s a sample pitch that only takes 10 seconds of your time: “I realize that you only paid $6,000 for that $9,000 Toyota Camry on your lot, and I’d like to give you a tidy $1,500 profit by paying $7,500.”

You’d be surprised at how often this works! Give it a try and see next time you’re on the lot.

Use this trick to shave a grand or two off the purchase price, then follow up by applying for an affordable auto loan to pay hundreds of dollars less than what the dealer would charge over the life of the loan.