10 Car Dealer Tricks to Avoid

By Lauren Fix

Car dealers are in business to make money and most of them are honest. Sadly some play the game and know the tricks that can be a trap. Having Car Smarts is important to be prepared for potential situations where you meet a more aggressive salesperson who’s looking to close the sale and maximize their profits. Here’s how to avoid these car dealer tricks and knowing these tricks will save you money.

Buying a car is an exciting time, it’s easy to want the car and miss the tricks and games that can cost you money.

The Credit Trick
A dealer may tell you that your credit score won’t qualify for competitive financing rates. This may be true. The dealer is implying your credit is worse than it is and you’ll have to pay a higher interest rate.

Car Smarts: Find your credit score before you buy, use Credit Karma or other apps.

The 3-Part Trick
Many people view buying a car as one transaction. It’s not, it’s typically three transactions rolled into one: the new-car price, the trade-in value, and the financing. A dealer sees this process as three ways to make money.

Car Smarts: Look at each transaction the same way as the dealer. That means you should negotiate each one separately.

The Payment Trick
The dealer will discuss monthly payments that seem affordable, they typically factor in a large down payment or stretched the term of the auto loan to 60 or 72 months. They do this with leases as well.

Car Smarts: Negotiate the price of the car rather than the monthly payment. Never give the salesperson what you can afford monthly. Stick to the overall price.

The Sticker-Price Trick
The vehicle price listed on the window is what’s known as the manufacturer’s suggested retail price, or MSRP. With the chip shortage, you need to look for market adjustment prices or similar wording. Some dealers are overcharging buyers.

Car Smarts: Finding the car or truck is half the battle, and a good dealer will not add in extra fees. Some really hot cars go for above sticker price. Don’t be afraid to walk away.

The Holdback Trick
Manufacturers often offer loyalty or conquest discounts. These incentives are part of something called holdbacks, which is money given back to the dealers. This typically isn’t discussed.

Car Smarts: Loyalty or conquest discounts are larger for more expensive vehicles. Don’t leave money behind by finding a dealer that wants your business. It doesn’t hurt to ask for any vehicle.

The Financing Trick
This trick is triggered when you get a call after the purchase that your financing has not been accepted. Dealers know if you qualify for financing almost instantly. They try to get you to sign for a loan with a higher interest rate because, according to them, they just found out you didn’t qualify for the lower rate. This is a scam.

Car Smarts: Never leave the showroom without signed contracts that spell out every detail and with every blank filled in.

The Rollover Trick
It’s tempting to trade up to a more expensive car even before you’ve finished paying off the car you’re currently driving. Some car buyers roll over the remaining payments on their current car into a new car loan or lease. The trick is that you’ll end up owing more on the second car than it’s worth. It’s called being “upside down” on the vehicle. If it’s totaled in an accident or if you decide down the road to trade it in, you’ll end up covering the remaining amount of the loan.

Car Smarts: Don’t roll over an old car loan into a new one.

The Balloon Trick
Some dealers will encourage you to purchase or lease a car for unrealistically low monthly payments, this sounds good on the surface but it will leave you with a large balloon payment at the end of the loan period. This is the price you’d pay at the end of the lease.

Car Smarts: Be wary of balloon payments and know that your financial situation may change by the time the balloon payment comes due, and you will have to make that large payment at the end.

Bait and Switch Trick
The bait and switch trick is when you are looking for one car and the dealer manages to get you behind the wheel of a different one. This strategy is used to get you drive something that is available rather than something they don’t have available. Typically they try to get you into a more expensive ride.

Car Smarts: Do your homework and know what you can afford. Go to another dealer that does have the car you want.

Contract Trick
The contract trick involve clauses tucked into the fine print that you might miss and likely wouldn’t even read. They might come in the form of changes to the loan term, add-ons that you never agreed to or other services that can lead to significant costs.

Car Smarts: Read over the contract carefully. Ask about all charges and make sure the terms are clear to both you and the dealer. Always keep a copy of the contract.

The Bottom Line

Buying a car is supposed to be a good experience. If you are being tricked, walk away. Don’t overpay for your vehicle. Knowledge is power, make sure to save this vlog for your next purchase so you don’t get tricked. Remember, what the big print gives, the small print takes away.

There is so much more to discuss on this, put your comments below and let’s start the conversation.

Lauren is the CEO of Automotive Aspects and the Editor-in-Chief of Car Coach Reports, a global automotive news outlet. She is an automotive contributor to national and local television news shows, including Fox News, Fox Business, CNN International, The Weather Channel, Inside Edition, Local Now News, Community Digital News, and more. Lauren also co-hosts a regular show on ABC.com with Paul Brian called “His Turn – Her Turn” and hosts regular radio segments on USA Radio – DayBreak. 

Lauren is honored to be inducted into the Women’s Transportation Hall of Fame and a Board Member of the Buffalo Motorcar Museum and Juror / President for the North American Car, Utility & Truck of the Year Awards.  

Check her out on Twitter and Instagram @LaurenFix.

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