Dealership Scams!
Well we will cover several of the scams to watch out for here. I have heard and seen them all folks and well unfortunately probably been involved on one or two back when selling cars was how I provided for my family! People claim these scams or others are no longer used but let me tell you they are and you need to be aware! This page is pact full of good information and fun facts!
**Tip- Use sites like InvoiceDealers.com , Edmunds.com ,
Automotive.com
and UsedCars.com to
get quotes from the dealership's internet department. They are normally
paid differently than regular sales people so they
will give you a better price from the beginning.
Lines They all use!
- I have to feed my family!
- If I got you a deal you thought was a good deal would you buy today?
- That's it we are all in. There is nothing left for us to give.
- You want my shoes because there is nothing left for me to give you.
- We are making no money.
- I am not paid on commission I get paid a flat rate.
- That is below our cost!
- The site you got your figures from is wrong. They are not in the business of selling cars or buying cars, we are!
- What do I have to do to earn your business?
- Your trade is not worth the figure you have.
- Split the difference with me, that's fair.
- I understand how you feel, many of my customers have felt that way to but here is what they found.......
-This deal is only good today.
-The incentives may be gone tomorrow.
-We have someone else looking at this car as well.
Scam #1 Switch you off price!
First let me say that you should know your payment range and what you can buy in that range before going to the dealership.
The Scam- Your looking at the car or starting to negotiate and they switch you to what your monthly payment is and start trying to negotiate monthly payment with you. Lines will be used like if I can get your payment to ___ with only ___ down will you buy now?
What this does- It is to stop you from focusing on price and get you to payment. If they can do that then by stretching out the term or other creative methods they can most of the time sell the car for more money because your not focusing on price. When quoting payments outside the finance office they always leave a padding for the Finance Manager so he can get a warranty and hold a few interest points and still keep you at the payment from the show room floor. Switching to payments helps them hold profit!
How to avoid this- Always know what payment you want, your credit and roughly what interest rate you will get. That way you are never forced to negotiate payments but can concentrate on price. Get pre-approved for a loan before hand through Driverloans.com or
and Automotive.com
that way it is not even a concern.
Scam #2 The Addendum!
Some dealers add what is called a addendum sticker to their cars. This would be a sticker beside the MSRP that would have a list of things on it such as FAIR MARKET ADJUSTMENT or added items like PAINT PROTECTION. Now sometimes if the dealer has added running board or a bed liner etc these will be there to reflect it and that is ok(remember if they add an accessory there is mark up in them so do your research.) Edmunds.com
is
a great resource to find the information you need for this!
What this does- It gives the dealer a way to pick up extra profit over what the car is worth and what it already has built in with the MSRP.
How to avoid this- If you see a FAIR MARKET ADJUSTMENT or Paint Protection added then tell the dealer you will not even consider this price that you will only start negotiations from MSRP. If he say no then leave! Another dealer will be glad to have your business. If he says the paint protection etc has already been put on tell him he can find you the exact car without it. If it is for a tangible item such as running boards or a bed liner do your research and know what they should cost and take that into consideration when negotiating. Research your pricing at Edmunds.com .
Scam #3 Tax the rebate!
Now this may be hard to understand. You are taxed on the sale price of the car(and in many states they will allow the trade value to be deducted before taxing). The rebate comes off the bottom line. I have seen some dealers (and personally know a sales person that can do this very smoothly) tell customers that the rebate is taxed so they will add the rebate to the sale price. Then they still subtract it off the bottom line but it cancels out from what was added to the sale price so it allows the dealer to pick up an extra amount = to the rebate. For instance the sale price was $15,000. There is a $2,000 rebate so before taxes the total should be $13,000. Now I explain with great trickery that you have to tax the rebate so the price becomes $17,000 and then I subtract the rebate to = $15,000 I just picked up an extra $2,000.
What this does-Allows the dealer to pick up extra money that you do not understand.
How to avoid this- Read all the numbers carefully and triple check them. Do the math on your own sheet of paper as well. If you do not understand how the numbers added up ask for a explanation. After the explanation if you still do not think it is right leave and go to another dealer!
Scam #4 The you have bad credit!
Some dealers will try and convince you that you have bad credit or your credit is worse than you think.
What this does- It allows dealers to charge you more in interest and also allows them to take the focus off of price again by making you feel like you would be lucky if they get the deal put together.
How to avoid this- Use Equifax.com
to
get your three credit reports and score this way you know exactly what
your credit is like. Use a resource outside the dealership such as
Driverloans.com or Automotive.com
to
get a free loan quote so you know what your rate should be.
Scam #5 The spot delivery scam!
Here is the thing a ton of cars are "spot" delivered. What that means is the customer takes delivery before the loan has been approved by the bank. This is not a bad thing especially on weekends etc.
The Scam- You take delivery of your new car, you go home and fall in love just for the dealer to call you back in a few days and have you come back down to the dealership and re-sign papers. Then they tell you the bank has a higher interest rate or needs more money down.
What this does- Allows the dealer to pick up extra money by upping the interest rate or getting more money from you.
How to avoid this- Arrange your own financing before had through one of the sites mentioned above that way if the dealer beats the rate you have already been offered great you saved some money but if they do not you can still get a better deal on financing. If they ask for more money down then this could be a real situation required by the lender. Make sure to read the paper work before resigning and if you give more money down the contract etc will change so make sure there is a new one!
Scam #6 The bank requires...
Some dealers will tell you that the bank requires you to buy an extended warranty or some other type of extra insurance in order for them to give you the loan.
What this does-It allows the dealer to pick up extra profit through the sale of these products.
How to avoid this-The thing is banks can not require this for you to receive the loan. Get a free loan quote through Driverloans.com and this will help insure the dealer can not pull a fast one on you!
Scam #7 We do not take checks from...
The dealer will tell you they do not take checks from the bank you received your loan from because they bounce checks etc.
What it does-It allows them to get you to finance through them and that way they make a few extra dollars.
How to avoid this-Tell the that the car you buy will be paid for by this check and if they do not want to accept it you will buy else where. If they still will not accept it you need to leave! If you run into this problem several times etc. contact the lender and make them aware and they will be glad to help you out.
Scam #8 Bring the car by next week...
Your buying a car and notice something wrong or it needs cleaned etc. The dealer tells you to bring it buy next week and they will fix it.
What it does-You take the car by next week and they will fix it and charge you for it. The sell you a car and then pick up the cost of repair etc.
How to avoid it-Anything they say they will do or fix get it in writing from the dealer. Have them sign the statement as well. This will give you legal recourse if they do not do it.
Scam #9 Here is the carfax report!
Not all dealers do this but some may. You say you want to run the carfax report and the dealer says they will do it for you. They copy and presto a few things and presto you get a clean report.
What this does-Allows the dealer to sell you a car that has been wrecked, flooded, etc without your knowledge.
How to avoid this-if the dealer runs the report for you ask to see the report on the screen from carfax. Make sure the VIN matches and it is the real car. Read the report fully. The best is to run your own carfax report on the car.
Well we will cover several of the scams to watch out for here. I have heard and seen them all folks and well unfortunately probably been involved on one or two back when selling cars was how I provided for my family! People claim these scams or others are no longer used but let me tell you they are and you need to be aware! This page is pact full of good information and fun facts!
**Tip- Use sites like InvoiceDealers.com , Edmunds.com ,
Lines They all use!
- I have to feed my family!
- If I got you a deal you thought was a good deal would you buy today?
- That's it we are all in. There is nothing left for us to give.
- You want my shoes because there is nothing left for me to give you.
- We are making no money.
- I am not paid on commission I get paid a flat rate.
- That is below our cost!
- The site you got your figures from is wrong. They are not in the business of selling cars or buying cars, we are!
- What do I have to do to earn your business?
- Your trade is not worth the figure you have.
- Split the difference with me, that's fair.
- I understand how you feel, many of my customers have felt that way to but here is what they found.......
-This deal is only good today.
-The incentives may be gone tomorrow.
-We have someone else looking at this car as well.
Scam #1 Switch you off price!
First let me say that you should know your payment range and what you can buy in that range before going to the dealership.
The Scam- Your looking at the car or starting to negotiate and they switch you to what your monthly payment is and start trying to negotiate monthly payment with you. Lines will be used like if I can get your payment to ___ with only ___ down will you buy now?
What this does- It is to stop you from focusing on price and get you to payment. If they can do that then by stretching out the term or other creative methods they can most of the time sell the car for more money because your not focusing on price. When quoting payments outside the finance office they always leave a padding for the Finance Manager so he can get a warranty and hold a few interest points and still keep you at the payment from the show room floor. Switching to payments helps them hold profit!
How to avoid this- Always know what payment you want, your credit and roughly what interest rate you will get. That way you are never forced to negotiate payments but can concentrate on price. Get pre-approved for a loan before hand through Driverloans.com or
Scam #2 The Addendum!
Some dealers add what is called a addendum sticker to their cars. This would be a sticker beside the MSRP that would have a list of things on it such as FAIR MARKET ADJUSTMENT or added items like PAINT PROTECTION. Now sometimes if the dealer has added running board or a bed liner etc these will be there to reflect it and that is ok(remember if they add an accessory there is mark up in them so do your research.) Edmunds.com
What this does- It gives the dealer a way to pick up extra profit over what the car is worth and what it already has built in with the MSRP.
How to avoid this- If you see a FAIR MARKET ADJUSTMENT or Paint Protection added then tell the dealer you will not even consider this price that you will only start negotiations from MSRP. If he say no then leave! Another dealer will be glad to have your business. If he says the paint protection etc has already been put on tell him he can find you the exact car without it. If it is for a tangible item such as running boards or a bed liner do your research and know what they should cost and take that into consideration when negotiating. Research your pricing at Edmunds.com .
Scam #3 Tax the rebate!
Now this may be hard to understand. You are taxed on the sale price of the car(and in many states they will allow the trade value to be deducted before taxing). The rebate comes off the bottom line. I have seen some dealers (and personally know a sales person that can do this very smoothly) tell customers that the rebate is taxed so they will add the rebate to the sale price. Then they still subtract it off the bottom line but it cancels out from what was added to the sale price so it allows the dealer to pick up an extra amount = to the rebate. For instance the sale price was $15,000. There is a $2,000 rebate so before taxes the total should be $13,000. Now I explain with great trickery that you have to tax the rebate so the price becomes $17,000 and then I subtract the rebate to = $15,000 I just picked up an extra $2,000.
What this does-Allows the dealer to pick up extra money that you do not understand.
How to avoid this- Read all the numbers carefully and triple check them. Do the math on your own sheet of paper as well. If you do not understand how the numbers added up ask for a explanation. After the explanation if you still do not think it is right leave and go to another dealer!
Scam #4 The you have bad credit!
Some dealers will try and convince you that you have bad credit or your credit is worse than you think.
What this does- It allows dealers to charge you more in interest and also allows them to take the focus off of price again by making you feel like you would be lucky if they get the deal put together.
How to avoid this- Use Equifax.com
Scam #5 The spot delivery scam!
Here is the thing a ton of cars are "spot" delivered. What that means is the customer takes delivery before the loan has been approved by the bank. This is not a bad thing especially on weekends etc.
The Scam- You take delivery of your new car, you go home and fall in love just for the dealer to call you back in a few days and have you come back down to the dealership and re-sign papers. Then they tell you the bank has a higher interest rate or needs more money down.
What this does- Allows the dealer to pick up extra money by upping the interest rate or getting more money from you.
How to avoid this- Arrange your own financing before had through one of the sites mentioned above that way if the dealer beats the rate you have already been offered great you saved some money but if they do not you can still get a better deal on financing. If they ask for more money down then this could be a real situation required by the lender. Make sure to read the paper work before resigning and if you give more money down the contract etc will change so make sure there is a new one!
Scam #6 The bank requires...
Some dealers will tell you that the bank requires you to buy an extended warranty or some other type of extra insurance in order for them to give you the loan.
What this does-It allows the dealer to pick up extra profit through the sale of these products.
How to avoid this-The thing is banks can not require this for you to receive the loan. Get a free loan quote through Driverloans.com and this will help insure the dealer can not pull a fast one on you!
Scam #7 We do not take checks from...
The dealer will tell you they do not take checks from the bank you received your loan from because they bounce checks etc.
What it does-It allows them to get you to finance through them and that way they make a few extra dollars.
How to avoid this-Tell the that the car you buy will be paid for by this check and if they do not want to accept it you will buy else where. If they still will not accept it you need to leave! If you run into this problem several times etc. contact the lender and make them aware and they will be glad to help you out.
Scam #8 Bring the car by next week...
Your buying a car and notice something wrong or it needs cleaned etc. The dealer tells you to bring it buy next week and they will fix it.
What it does-You take the car by next week and they will fix it and charge you for it. The sell you a car and then pick up the cost of repair etc.
How to avoid it-Anything they say they will do or fix get it in writing from the dealer. Have them sign the statement as well. This will give you legal recourse if they do not do it.
Scam #9 Here is the carfax report!
Not all dealers do this but some may. You say you want to run the carfax report and the dealer says they will do it for you. They copy and presto a few things and presto you get a clean report.
What this does-Allows the dealer to sell you a car that has been wrecked, flooded, etc without your knowledge.
How to avoid this-if the dealer runs the report for you ask to see the report on the screen from carfax. Make sure the VIN matches and it is the real car. Read the report fully. The best is to run your own carfax report on the car.
Step 1: Decisions
Introduction
Can you Buy & How Much
New Car or Used Car
What Make, Model, Etc.
Step 2: Contact
Prepare for Initial Contact
Initial Contact
Secondary Contact
Final Chance
Step 3: The Visit
Prepare for the 1st visit
Schedule the visit
The 1st Visit
Post Visit Follow Up
Step 4: The Buy
Elimination Round 2
Final Preparations
Final Visit & Negotiations
The BUY!
Contact US
Other Great Tips!
New Car Buying Tips
Used Car Buying Tips
Used Car Selling Tips
Credit Tips
Bad Credit Tips
Trade-In Tips
Financing & Loan Tips
Bad Credit Loan Tips
Insurance Tips
Extended Warranty Tips
Gap Insurance Tips
Dealership Scam Tips
Fun To Read
Articles
Dealership Dictionary
War Stories
F.A.Q.
Just is Not True
Our Friends
Blog
Introduction
Can you Buy & How Much
New Car or Used Car
What Make, Model, Etc.
Step 2: Contact
Prepare for Initial Contact
Initial Contact
Secondary Contact
Final Chance
Step 3: The Visit
Prepare for the 1st visit
Schedule the visit
The 1st Visit
Post Visit Follow Up
Step 4: The Buy
Elimination Round 2
Final Preparations
Final Visit & Negotiations
The BUY!
Contact US
Other Great Tips!
New Car Buying Tips
Used Car Buying Tips
Used Car Selling Tips
Credit Tips
Bad Credit Tips
Trade-In Tips
Financing & Loan Tips
Bad Credit Loan Tips
Insurance Tips
Extended Warranty Tips
Gap Insurance Tips
Dealership Scam Tips
Fun To Read
Articles
Dealership Dictionary
War Stories
F.A.Q.
Just is Not True
Our Friends
Blog
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