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Car Buying – How to Avoid Dealer’s Tricks


Let’s keep it simple

You want to buy a new car. There are two parts to the buying procedure; one is research using your fingertips and the World Wide Web. The other requires you to shop around as you begin your encounters with the dealerships.
Do your homework and be fully armed and equipped with necessary information before going for the final purchase. Take clues from my earlier blog where I listed the 3 best sites to look for to complete your car purchase research.

Unfortunately, the part when you are communicating with the dealers cannot be simple. Dealers train their salespersons to sell: their long list of services and fees confuse us and make us add things that we easily could do without.
There is an interesting comment on Reddit by someone sharing car buying and negotiation tips that he got from his friend who has been in car sales for 20 years:

Avoid Dealer, Car Buying – How to Avoid Dealer’s Tricks

“Never Pay Close to MSRP”

What you are about to read will give you more value for your money. The value is in the car you buy, but changing the way you manage your engagement with the auto salesperson, makes you not only enjoy the car but also your bargain.

Double your fun of car buying by challenging yourself to the game of negotiation and the art of understanding the salesmen traps and tricks that are plotted for a good commission and profit markup. The idea is to enjoy your buying experience, not the car alone. If you are not confused, you will not be prey to unwanted expenses hence you come out with a sense of accomplishment, not frustration.

Understand the dealers’ tricks


Dealer Trick #1 – MSRP & Dealer’s Sticker Price

After the car arrives at the dealership, the price is changed with the mark up and this is the MSRP (manufacturer’s suggestive retail price). If the dealer upgrades the equipment with various extra accessories or services, they make more money as the customers often overlook these built-ins by the dealer and miss to catch the high charges on them. They may make up to ten times or more of the cost they incur on having those features built in the car. Research and find out the actual market price of any accessory or services that the dealer added to the manufacturer delivered the car to negotiate and get a reasonable price on those add-ons if you think you need them. Or ask for a car which is the base model as offered by the manufacturer without any dealers’ tampering.

Dealer Trick #2 – Manufacturer’s Rebate

The manufacturers offer discounts and rebates at various times to loyal customers or customers owning a competitors’ brand. It is advisable to check their website to know if you are eligible for any. More than one rebate can apply for one car. All dealers do not disclose this rebate so make sure to ask every dealer you visit what rebates they have. The dealers may have more information than the website. Also, dealers can give a discount on top of this rebate; if they say they cannot, it’s a lie.

Dealer Trick #3 – Extended Warranty

Your new car will come with a manufacturer’s warranty. It covers everything you need and an extended warranty kicks in after your manufacturer’s warranty expires. If you plan on trading in the car before the existing warranty expires, you don’t need the extended warranty. If the dealer forces you to buy an extended warranty, you can object and be firm on not getting it. You can always get the extended warranty when the manufacturer’s warranty is about to expire.

Dealer Trick #4 – Payment Packing

You have a budget and you are interested to know how much you will have to pay monthly for the car. This is a trap, it allows the dealer to inflate the price, increase interest rates, and other products, increase the period to show a lower monthly payment, but ultimately help themselves make the more gross profit. Consider calculating the monthly cost after all the other prices are negotiated.

Dealer Trick #5 – Undervalued Trade-Ins

Dealers always quote way below the actual cash value of the car if he knows you want a trade-in. So, even if you might want it, still don’t admit it. Let the car dealer give you a price solely for the car value. Research its worth before going to the dealer so you know its actual worth to get a fair price.

Dealer Trick #6 – Dealer add-ons

There will be many add-ons that the dealer will try to sell you, use your judgment to decide what is really necessary; check the price outside before getting it if you feel you need it. Few of those that you can do without are VIN Etching, Rust-Proofing, Fabric Protection, and Paint Protection. The below list will be useful to see some products and services and the price the dealer pays vs. what they charge the customers:

Avoid Dealer, Car Buying – How to Avoid Dealer’s Tricks

Dealer Trick #7 – Dealer Fees

Vehicle preparation fees for making the vehicle ready to go so it is a part of the deal so dealers should not charge you for it. Documentation fees for preparing the paperwork (the state charges are very low compared to what the dealers usually charge), and the “hold back & advertising” fee is what the manufacturer give to the dealer so that too should also not be a cost for the customer. Other fees like administration fees and floor plan fees are also unnecessary.

Dealer Trick #8 – Financing and 0% Interest Auto Loans

The dealer keeps a higher markup of interest rates; they increase the term period to mislead you and continue to get better profits. If they say they are offering 0% interest, they are either offering it to people with very high credit score or they have higher installments for shortened term period which becomes unaffordable for many and they switch back to cheaper monthly payments with longer-term period loans and passes good profit margins to the dealers.

Use these 10 winner moves

  • Shop end of the month when they have a target and quota to reach
  • Buy a car that is in stock now
  • Don’t give the sales staff the intelligence to undermine your agenda.
  • Offer a price that is lower to what you are prepared to pay
  • Separate 3 transactions – buying the new car, selling old car, financing.
  • Get your finance pre-approved.
  • Review your paperwork to avoid errors that only benefit the dealer.
  • Keep negotiation short, it reduces staff’s cost of time.
  • Negotiate from dealer’s cost, not from the MSRP.
  • Check for how long the car has been with the dealer, the longer the time the more flexible he will be to offer the discount. The manufacture date is usually on the door sticker. Watch this video to know how to find it.
  • Don’t be impulsive, be in control & walk away if need be; you will be surprised, this might lead to a better price.

Retrospect & learn

You can do a quick look back on your auto sales invoice to see where you were hit with additional charges because you did not know the above tricks and strategies? Mistakes are expensive, so learn from them and do not repeat them again. Look at one such invoice to compare how much the price can hike with additional services and add-ons shared by Mark Frauenfelder in his article here:

Avoid Dealer, Car Buying – How to Avoid Dealer’s Tricks

Improve Car Buying

There are companies which are trying to take away such hassles by offering you digital insurances and other assistance. Coming up next is my newest auto insurance finds. Don’t forget to check back at
Stay informed by making use of services which are available for your benefit. Insuredmine is here, doing exactly that, in the area of Insurance. Try for free and reap the benefits.


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