7 Minute Read
“What do I have to do to get you into a car today?”
If you’re like most Americans, that sentence alone is enough to make you cringe. It’s the stereotypical sales tactic of the used car salesman. It might be the first thing you hear when you step onto a car lot, especially toward the end of a month or sales quarter. And it’s the first sign that you should probably hop right back into your car and go find another dealer.
“The biggest thing to watch out for with used car dealers is people who are more concerned with selling you a car than finding out the specifics of your situation,” says Simon Lawrence, a used car dealer in Nashville.
Early in Simon’s career, he worked with dealers who used every trick in the book to make a sale—whether or not the sale made sense for their customer. When he recently opened his own dealership, he knew that he wanted to do things the right way, to avoid the tricks of the trade that turn off so many potential customers.
With fall almost here and dealers looking to clear 2014 models off their lots, now is a great time to get a deal on a used car. Make sure you’re prepared for these sales tricks Simon says you’re almost guaranteed to hear.
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1) The Hard Sell
This is the salesperson that simply won’t leave you alone. As a result, you automatically go on the defensive.
Typically what happens is a dealer starts the sales pitch, and the customer says, “I’m just looking.” But the customer usually isn’t “just looking”—they probably want to buy. “They just don’t want the dealer to know,” says Simon, “because they don’t want to have to deal with the hard sell.”
Buying a car is a big decision, so never make a purchase simply because you feel pressure from an overaggressive sales guy. Simon adds that upfront pricing is a good way for dealers to deal with this tension. “There’s no haggling over price. A lot of people don’t want to have to go back and forth with a salesman and then do the same with a manager.”
With upfront pricing, the customer’s job is simple: Do some research, know the price, and buy the car or walk away.
2) Selling on Payment Instead of Price
When a salesman pops the question, “What kind of payment are you looking for?” before you’ve even talked about the price of the car, that’s a major red flag.
“If you’re focused on payment, they will stretch the term as far as possible to get you a ‘payment’ you’re happy with, even though you’ve overpaid on the car,” says Simon. “They also make money when you finance, as much as $3,000 in some cases. A great salesman should never begin with payment. Instead, they should be polite in addressing your budgeting concerns.”
If you’re on the Dave Ramsey plan, you know car payments are not an option. So don’t let a salesman distract you from your plan and focus on payment instead of overall price. Find a car you can afford and pay for it … with cash.
3) The Trade-In Trick
Some dealers will make you think you’re getting a good deal on your trade-in value while ripping you off on the car you’re buying. “A lot of times people come in to buy a car, and they are focused on the trade-in value of their current car,” says Simon. “Dealers know that. So they lie about the trade value.”
An example: You know the value of your trade-in is around $5,000, and you want to buy a car that’s priced at $20,000. The dealer says they’ll “give you a deal on your trade” by offering $7,000. No-brainer, right? Of course you should take that deal, right?
What you don’t know is that the $20,000 car you’re buying is really only worth $17,000. So you’re getting a “good deal” on one hand while getting ripped off on the other hand. “A lot of people come in thinking, What can I get for my trade? as opposed to, What is the car I’m getting worth?” says Simon. Keep both of these values in mind when you’re talking with a dealer about a trade-in.
4) Bad Information
Another common tactic with dealers is to answer a question with misleading information. For instance, you’re looking at a car on the lot and you notice one of the doors is a little off-center and has some slight cracks in the paint. It looks as if it’s been in an accident, but maybe the vehicle history report didn’t indicate that and the salesman didn’t mention it.
You ask the salesman about it, and he responds, “Oh, that’s no big deal. We can touch that up for you without a problem.” He doesn’t look into the situation any more and doesn’t apologize for not having mentioned it up front.
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“The salesman betrays trust by giving them the wrong answer,” says Simon. The answer? Know your stuff. “You can do more homework on the internet and find out more information than a salesman knows about a car.”
5) Hidden Fees
The fees aren’t really “hidden,” but most dealers aren’t going to publicize all the extra costs—like processing fees. Simon explains it this way: “Let’s say you find a car for $10,000. You agree on that price, and you’re happy with the car and ready to purchase. Then you go inside and realize you have a $799 processing fee, a $235 title and registration fee, and a $49 licensing fee tacked on.”
“It’s all profit,” says Simon. “But they disguise that profit into fees and don’t tell you about it until you’re sitting down to pay for the car. In their defense, dealerships do pay a lot of money for accounting and licensing professionals to handle taxes, titles and registration. But some dealers have fees a lot higher than others, so keep that in mind.”
“The fees are okay, but it’s not okay to try and keep them under wraps until the end,” he said. “Every service has a price with it, but just make sure the dealer is up-front. Ask about the fees so you don’t get blindsided at the last minute.”
6) The Waiting Game
If you’ve ever bought a car from a dealer, chances are you’ve been a victim of the waiting game. All the layers of management and approval can cause problems for a potential buyer.
“You have a salesman, a team leader, a sales manager, a general sales manager, and then a general manager,” says Simon. “You have all these levels of leadership, so someone takes the keys to your possible trade-in, and you have to go through three or four people if you want to get them back.”
If you do make a trade or buy a car, you go to another area of the dealership where you have to wait again. “You wait for financing, paperwork … you just wait,” he said. “Then you’re exhausted and you just want to get out of there and you’re more likely to agree to something that’s a bad idea.”
If you feel like you’re being run through the waiting game wringer, then take the initiative and make the dealer start moving—or call the deal off. Don’t agree to something because you just want to get out of there.
Now for the Good News
All of these tactics build a lot of friction between the dealer and the customer, which doesn’t create a fun experience when you want to go buy a car. “The salesman mistreats the customer, and the customer doesn’t trust the salesman. So you basically just have two people ‘beating each other up,’” Simon adds.
The good news is there are car dealers who do things the right way. Talk to your friends, family members and coworkers who have had good experiences buying a car.
But, no matter when or where you go, keep your eyes and ears open for these sales tactics, and make sure you get a good deal on a car that fits your situation. You may even be better off repairing your existing car than buying a new one.