The digital age has revolutionized car buying, empowering consumers with a wealth of information. However, car dealerships have adapted by crafting clever advertising scams to lure unsuspecting buyers. This article delves into the top 10 dealer advertising scams, providing you with the knowledge to avoid falling victim to these tactics.
Dealers often advertise that they'll give you a substantial trade-in value for your old car, regardless of its condition. For example, they might promise $1,500, $2,000, or even $3,000 for your trade-in. However, this is a deceptive tactic. Dealers typically inflate the price of their vehicles to cover the "minimum trade allowance," ensuring they still make a profit. According to Kelley Blue Book, the average markup on lower-end vehicles is around $2,000 to $2,500, and it can be much higher for more expensive models.
Some dealers claim they'll give you $10,000 if they can't beat a competitor's price. This is highly unlikely to happen. The new car market is extremely competitive, and most dealers will match the price of an identical vehicle from another dealer. According to Edmunds, 95% of new car dealers will match a competitor's price. The $10,000 guarantee is merely a ploy to attract customers.
Dealers often offer "free" items like big-screen TVs, camcorders, or computers with a car purchase. However, these items are not truly free. The cost is built into the price of the vehicle. A deal that would normally yield a $3,000 profit might only bring in $2,200 after accounting for the $800 gift certificate. Always scrutinize the total cost of the vehicle rather than being swayed by "free" offers.
This statement is misleading. The key phrase is "when we make a deal." If the dealer can't pay off your trade because you owe too much, they won't make a deal. This kind of doubletalk is designed to lure you in but often results in disappointment.
Some dealers advertise cars at half their original MSRP. For example, a Lincoln Town Car with an MSRP of $50,000 might be sold for $25,000 after a year and 20,000 miles. While this isn't exactly a scam, it can be misleading. The domestic market often keeps prices high and offers huge rebates, which can create the illusion of a great deal. Always compare prices on automotive classified sites like Autotrader or Cars.com.
A loss leader is a vehicle advertised at a significantly discounted rate to attract customers. However, the dealership usually only has one or two of these vehicles, which are often stripped down with no options. Once you arrive, they try to switch you to a more expensive model. This tactic is common but can be misleading.
Many automotive websites offer discount vouchers for printing and bringing in. However, these discounts are often included in the dealer's pricing strategy. The fine print usually states that the voucher must be presented before negotiations start, meaning the discount is already factored into the price. Always read the fine print and compare prices from multiple sources.
This offer sounds too good to be true, and it usually is. For example, a $10,000 car at $88 down and $88 per month at 6.9% interest would take 181 payments to pay off, which is longer than a 15-year mortgage. The fine print often reveals that the $88 per month is an introductory rate, with real payments kicking in later.
Similar to the $88 per month offer, this deal often involves a long lease with a large down payment or a purchase with a lengthy term. For example, a $199 per month payment might require 25% down and a 96-month term (eight years). This tactic often results in switching the customer to a used vehicle, allowing the dealer to make higher profits.
This is the granddaddy of all scams. Dealers might offer a second car for free when you buy one. However, the "free" car is usually an old, damaged vehicle. For example, you might overpay for a new car and get a 1989 Nissan Sentra with flood damage as the "free" car. Always scrutinize the total deal and the condition of both vehicles.
Car dealerships have adapted to the information age by crafting clever advertising scams. By being aware of these tactics, you can make more informed decisions and avoid falling victim to these scams. Always read the fine print, compare prices from multiple sources, and scrutinize the total cost of the deal.
By staying informed and vigilant, you can navigate the car buying process with confidence and avoid falling prey to these common dealer scams.
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