SHOPSMART AUTOS – CUSTOMER INFORMATION – NOVEMBER 11, 2020
What should I do before I buy a car, truck, or SUV? (PT. 3)
What are some car sales tricks to avoid? According to DMV.org, here are a few dealership tactics to be cautious of when you’re negotiating a new car price.
Trade-in scams.
Before signing any contracts, make sure the trade in value previously agreed upon is reflected in the final documents. Also, beware of “push, pull, tow sales.” With these promotions, the trade-in value of your car actually comes from the rebates and incentives on the car you are purchasing. The rebates and incentives can be used to purchase the car regardless of the vehicle you are bringing in.
Mixed negotiations.
Also known as the “four-square” method, this salesman’s trick combines multiple, unrelated factors into a single transaction. The sales manager writes the price of the car, the down payment, trade-in value, and the desired monthly payment into four boxes. The numbers might not even relate to each other. If you are looking for a certain trade-in price or a set monthly payment, ensure the numbers being presented are used in the calculation.
Inflated interest rates.
Some car dealerships may advertise a certain interest rate, then they make last-minute changes to financing.
Spot delivery.
Some car buyers have driven a car off the lot without secured financing. This means that a few weeks later, the car dealership might call to say the loan application was rejected and they need new paperwork. If this happens, you could end up paying a higher interest rate or down payment.
Poor credit.
The dealership might play up the fact you have a low credit score, making you feel as if it’s bad. Then, they talk you into a higher down payment and possibly higher monthly payments.
Negative equity.
The dealership might tell you they are paying off your old loan when your car is not worth the remaining value of the loan. In reality, they are adding the “negative equity” on to the loan for your new car, or they’re using the rebates and incentives to pay off the old loan.
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