There are a number of scams that car dealers may do to attract buyers. Here are things that we should know:
- Push, pull and drag sales: No matter at what condition the car is in, we should be careful when the dealer says that he will let go of the car for only $2000 or even less. We should know that a piece of junk is still a piece of junk. There could be so many worn out components in the car that we need to put the car to the mechanic’s shop the next day. The total cost to bring the car to acceptable level of reliability and performance could be much higher than the price of the car itself. As an example, we may feel that we have ripped the dealer off for getting a 1983 Corvette for only $3,000. In reality, the car could be in a bad shape that the dealer still makes more than $1000 in profit.
- Best price guarantee: Car dealers may promise to give us $10,000 if they can’t beat a deal by other dealers. In reality, many car dealers also use the same price level. The bad part is that, consumers are unaware that the dealers may as well as they will give $1,000,000; because this isn’t going to happen. Car dealers in the city may agree on a minimum offered price for specific make and model.
- Get a free …., when you buy a car: Smartphones, navigational equipments or calendars, these things are actually not free. Their costs have been included in the price of the car. A car that normally costs us $10,000 could be priced at $10,499, plus the supposedly “free” gifts.
- Half price programs: Many car models depreciate quite quickly from the original MSRP. As an example, Lincoln Town Car has an original MSRP of $50,000. After 20,000 miles or a year of usage, the car could be available at the dealer auction for around $20,000. Dealers will purchase them, make minor improvements and apply a modest markup, so they can sell it at the low $30’s. This may not be entirely a scam, but car buyers should be aware that it’s possible for them to purchase overpriced cars.
- Loss leader: It is a common scam that’s implemented by car dealers. The dealer may have fifty Honda Civics, with one or two sold at much lower prices. These cars are called the loss leaders and they could be stripped down with no extra options, such as no air conditioner and onboard stereo sets.
- $100 down and $100 per month: It is certainly appealing being able to bring home the car for only $100 down. But a $12,000 car paid $100 a month at 6.9 percent interest could take nearly two hundreds payment to pay off. This can be longer than a standard house mortgage and we may need to pay for the entire operational use of the car.