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6 Sneaky Car Dealer Tricks You Should Know

Have you ever heard about car dealer tricks?

Buying a car can be pretty exciting, but the process of getting it isn’t always the most pleasant one. Whether you’re about to be a first-time vehicle owner or you already have experience, there are a few car dealer tricks you must know. These pros have perfected their tactics to maximize sales and profits, and while some are only standard practices in their job, others are made to catch even the savviest buyers off guard. From making the contract deals seem complicated to several add-ons you never really needed, some car dealer tricks are more costly than they seem at first impression.

Imagine how annoying it is to sign a document that was supposed to be a fantastic deal, only to realize hidden fees, extended warranties, or even a “necessary” upgrade have inflated your total cost. Unfortunately, these practices are more common than you’d think, so if you’re not aware of them, it could be easy to fall into a financial trap.

There’s no need to worry, though—we’re here for you. Knowing what tricks to expect can save you serious money and make you more confident when talking to the pros at the dealership. So before you make any decisions, check out these sneaky car dealer tricks that could change how you negotiate and how much you’ll pay for your new vehicle. Your wallet will thank you!

car dealer trick
Photo by Zamrznuti tonovi from Shutterstock

1. The single-transaction strategy

A lot of people think of buying an automobile as one big transaction. It’s not that straightforward, and dealers know it. Experts say it’s really three transactions rolled into one: the price for your new car, the financing, and the trade-in value. And here’s the first car dealer trick: these are all potential ways for a dealer to make money, which means that you can take advantage of each one.

Here’s what you should do: treat each one of these transactions separately, exactly as your dealer does. You can also shop your trade-in with several dealers to get the best deal available. Moreover, you can keep the salesman honest by bringing up the typical sale prices for the vehicle you’re interested in.

2. The credit cozen

Here’s another important car dealer trick you must know if you don’t want to spend a fortune on a new vehicle: make sure you come with your credit score on hand before you have the conversation with a dealer. That’s because they’re more likely to tell you that you don’t qualify for competitive rates.

In some cases, it might be true, but pay attention because they might suggest your credit is worse than it seems. This trick will only make you think you need to pay a higher interest rate. Avoid that by taking your credit score with you and even getting preapproved for an auto so you don’t have any reason to rely on dealership financing.

car dealer trick
Photo by SofikoS from Shutterstock

3. What about the sticker?

The price of the car that is displayed on the window is the MSRP or manufacturer’s suggested retail price. However, that isn’t the most important factor to have in mind. What you need to be looking for is the invoice price, or how much the dealer paid for it.

You will ultimately pay an Out the Door (“OTD”) price, which includes taxes and other costs. According to experts, knowing what the dealer paid can bring the bowl into your court because you’ll know how to avoid line-item expenses when getting a new car.

Some people recommend considering dealer and customer incentives to determine the selling prices of automobiles. Some stylish cars cost at least their sticker price. Be patient, because when demand declines, prices will drop.

Other than that, don’t be scared to ask for more details if you have any questions about a certain fee or service that is being quoted. After all, you’re the customer, and you need to be informed!

4. The payment ploy

…Have you ever heard of the payment ploy? It’s another one of these car dealer tricks you must know. 

You might be eligible for a great monthly payment that the finance or sales team throws out. However, there’s usually a catch, so watch out. There are certain situations in which the dealer might have extended the auto loan’s length to 72 or 84 months or factored in a sizable down payment.

You can avoid any sort of potential issue by focusing on the automobile’s price rather than the monthly payment. The dealer will probably ask you how much you’ll be able to pay each month, but instead of giving them the direct answer, you could just say that you can afford to pay $x for your new vehicle.

Last but not least, make sure that any price you negotiate is the full cost of the car before your down payment or trade-in is applied.

car dealer trick
Photo by Dikushin Dmitry from Shutterstock

5. Yo-yo financing

Continuing with these car dealer tricks, it’s now time to talk about the yo-yo financing yank. Spot financing or spot delivery allows you to sign a contract and drive your new automobile home before the finance is over. While it’s usually legitimate, it can sometimes be used to pressure you into a loan with higher rates than you might otherwise qualify for.

One thing you should know is that yo-yo loans typically operate by “qualifying” a potential customer into borrowing at a specific, appealing rate. After that, you’ll be contacted by the dealer to inform you that you’re not eligible to borrow on those terms at a later (and frequently inconvenient) time. And here’s the trick: you’ll accept a far more costly loan so you can keep your new car.

You can avoid this sneaky car dealer trick by knowing in advance what kind of interest rate you qualify for. Make sure you prequalify with other lenders, so you’re prepared. Only take contracts that include all of your loan details with you when you leave the showroom. Other than that, make sure you have been accepted for the financing your dealer offers.

In case your financing falls through, the dealer should cancel the sale of the vehicle based on a clause in your financing agreement. After all, the owner has the right to cancel.

6. The insurance trick

Another car dealer trick you should be aware of is the insurance illusion. Some dealers are more likely to convince you to purchase insurance coverage when you buy your vehicle.

One of the most common ones is gap insurance, which covers the difference between your automobile’s worth and the amount you still owe on it. Experts see it as another expense and not always necessary. However, if you want to have gap insurance, it might be worth it to get from a regular car insurance company because it’s usually more affordable this way.

Another popular one is credit life insurance, which will typically take care of the balance of your loan if you die before you’ve been able to repay it.

If you’re interested in any of these types of insurance, make sure you understand what you’re buying. You don’t have to accept the dealer’s offer right away. You can always shop around for a better price and choose what’s best for you and your budget.

You can negotiate lower prices with your auto insurance provider, as dealership-marketed insurance coverage often has a significant markup.

At the end of the day, these car dealer tricks help them reach their target, but make sure you listen to yourself and only make decisions if they’re right for you. Other than that, I hope you have fun with your new vehicle. If you want to protect it from the sun, here’s a gadget you must have!

Do you know any other car dealer tricks you must avoid? Let us know in the comments below! If you find this article helpful and would like to check out something else from Urban Cars Blog, here’s a good post for you: 6 Common Driving Habits That Can Harm Your Car

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