Although buying a new car is usually an exciting experience, the truth is that there are times when it becomes an ordeal. Instead of offering an honest sale, many dealership salespeople use various strategies to increase their profits, which you can avoid if you pay attention. It’s common for them to try to sell you an extended warranty, which can raise your costs without providing any real benefit. They also ask how much you can spend per month to see how far they can stretch your loan term, and they change financing terms to higher interests and monthly payments.
Another common practice is charging a fake delivery fee, as transportation costs are already included in the price of the vehicle. Pay attention when they offer you unnecessary coatings or sealants, as that additional protection is usually already included in vehicles from the factory. Another common strategy is lying about the credit score in order to make the customer pay more for financing. It is also common for them to exaggerate the vehicle’s features to justify its high price, as well as offer additional alarms or trackers.
Sometimes, they even practice “yo-yo financing,” which must be reported to the Federal Trade Commission (United States) immediately, as it is a fraud. The most common strategy you will see both at a dealership and any other type of business is high-pressure sales with limited-time offers. Applying pressure by claiming that the offer is short-lived or that there are other interested buyers can cause the consumer to make hasty decisions.
Watch out when buying a new car!
Buying a new car should be an exciting and enjoyable experience, but some dealership salespeople make it the exact opposite. This is due to aggressive sales strategies they use on the customer with the goal of increasing their profits. Some even go so far as to deceive the customer and charge extra for unnecessary products, so we need to keep a sharp eye out. Keep the following points in mind if you are planning to buy a new car, and if you don’t want to be tricked by any of these sales tactics.
Extended warranty
It is one of the most common offers. However, in most cases, this service is unnecessary, as the manufacturer’s warranty usually covers the most significant defects.
How much can you pay per month?
This is a very common question. Far from asking to fit the budget, they ask it to find out how long they can extend the loan term, making you pay more interest.
Changing the financing terms
Also known as a “financing switcher,” it involves increasing the interest and monthly payments after agreeing on a plan with the client.
Delivery fee
Many add an extra charge for vehicle delivery. However, this amount is already included in the car price, so if they try to charge it to you again, you would be paying twice.
Coatings and Sealants
All the coatings and sealants needed to protect the car are usually included from the factory, so this offer only serves to increase the final bill.
Credit Score
It is important to check your credit with the main agencies before going to the dealership. This will ensure that you are not misled about your credit score to justify higher interest rates.
Exaggerating Vehicle Quality
Features like assistance sensors, panoramic sunroofs, or sound systems are usually appealing talking points that distract us from the essentials and make us pay a higher price.
Alarm and Trackers
Modern cars already come with integrated security and tracking systems, so paying for an external system is an unnecessary additional expense.
“Yo-yo financing”
This is one of the most dangerous strategies. It is an illegal method through which the dealer calls the customer saying that their financing was not approved, even after the car has been taken and a sales contract has been signed. It is then that they offer the option to return the vehicle or to sign a new contract with higher rates. If this happens to you, you should report it immediately to the Federal Trade Commission (United States), as it is considered fraud.
Limited offer!
One of the most common strategies inside and outside of dealerships is to make use of limited-time offers. Using arguments like “the offer expires today” or “there are other interested buyers” puts pressure on the customer to make impulsive and fully conditioned decisions.