10 Car Dealer Tricks To Watch Out For
By Auto Loan Specialist
There is that common “Used car salesman stigma” and unfortunately it still exists till this day. We want to keep you safe and informed through your future vehicle purchase. A lot of car salespeople have a great reputation, on the other hand there are a few sharks in the sea. Below you will find 10 car salesman tactics to watch out for:
1.) Telling You Your Credit Is Less Than It Really Is
One of the most common tactics is by not being truthful to you about your credit score. Quite commonly the “Finance Manager” will tell you that you don’t qualify for a lower interest rate. Although sometimes this may be true. More often than not they aren’t being completely honest with you. Some dealerships get paid off the interest rate they are able to sell you at. Make sure to know your credit score and trade line history before hand, or ask the finance manager to go over your credit report line by line with you. Ask the finance manager to explain why you qualify for the score you’re being offered. On the other hand, the best way to make sure your getting the absolute best interest rate is applying through Auto Loan Specialist and getting a pre-approval in hand!
2.) The Four Square
When you are presented with a 4 square this is the point of negotiation. Each box on a 4 square has room usually for negotiation.
The 4 square consists of 4 boxes:
A.) Your Trade-in Value
Shop around online or at other dealerships to make sure you’re getting top dollar for your vehicle trade-in.
B.) Price Of The Vehicle
The price of the vehicle is usually an MSRP price. Which is the Manufacturer’s suggested retail price. Make sure you check online and other dealerships to make sure you’re getting the best price.
C.) Down Payment Towards The Vehicle
A down payment can strengthen a finance application and get you a better interest rate. A down payment can also be used as pure profit for a dealership. Make sure you understand your finance terms and approval.
D.) Your Monthly Payment / Financing Terms
The monthly payment and finance terms are extremely important. You want to make sure you’re getting the absolute lowest interest rate with the shortest term. By using this method you will be financing short term, which is a high equity solution.
3.) The Monthly Payment Trick
Don’t focus so much on the monthly payment. Pay more attention to the price of the vehicle and total amount financed. Don’t get trapped into a 7+ year loan with a massive downpayment that is 250$ monthly. This is how you will acquire negative equity in the long term.
4.) The Sticker Price Trick
Don’t ever let the sticker price fool you. That price is the MSRP “Manufacturer’s Suggested Retail Price”. What is more important is being aware of the current market prices. A great website to use is AutoTrader or CarGurus to be informed on current vehicle pricing.
5.) Two Bills Of Sale
You should “NEVER” have to sign two bills of sale for any reason. If you ever find yourself in this situation LEAVE. Always review all documents you sign thoroughly before signing.
6.) The Extended Warranty
An extended warranty is great to have on a vehicle. Make sure if you are purchasing a vehicle that it doesn’t already still have a full manufacturer’s warranty. If that is the case, there is no need for the sales person to be selling you an extended warranty.
7.) The Extra Add Ons
Many dealerships will try to sell you extra add ons, such as a tire and rim package or perhaps a key replacement warranty. Although these are great things to have, make sure you actually need them. Always ask how much these things cost, don’t get looped into it’s only $20 more a month, over 84 Months, at 12% interest!
8.) The Negative Equity Trade In
Although it may seem nice to upgrade your vehicle, if you just recently financed a vehicle be wary. This is a downward spiral, as you will have negative equity. If you do make this decision, make sure you get a lower interest rate. Also if you’re able to put money down it will help combat the negative equity.
9.) The Bait and Switch
You may be lured into a dealership with a specific advertisement for a vehicle that seems way under price. You may drive all the way there, to only find out the vehicle is “Sold Out”. The salesperson may show you more expensive vehicles with more profit for the dealership.
Make sure you are made aware of what banks approved or declined you for an approval. Some lenders may offer you better programs or rates.
We would love to help you find your next vehicle at the absolute lowest possible interest rate!
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