Oh, Those Dealer Ads!
Ok, pick up any Sunday edition of a major newspaper (or simply go online and wait for the ads to be served to you) and turn to the automotive section. You know, the one with the obligatory fluff car review or two, and pages and pages of those bold and vivid dealer car ads, shouting text and, of course, low prices.
On these pages you'll find that half a dozen dealers will not be "Knowingly Undersold", ten more offer the "Guaranteed Lowest Prices", and another four or five will "Beat Your Best Deal". Whew! Being an intelligent and pro-active person like yourself, you start to plan your shopping strategy: who to visit, where to go first, where to go last, who to follow up with -- you know, that grand plan that will get you in that new Expedition for $200/month with no money down. After all, if all these ads are telling you the truth you can simply go from dealer to dealer with successively lower offers until you get an unbelievable bargain! Actually, if you look at this logically, you can keep this up endlessly until YOU GET THE CAR FREE!
Wait! There are even more amazing facts to be found on these pages. It seems as though four dealers are having "The Biggest Automotive Sales Event in History!". They are all near your home, and they just happen to be having these historic sales events right when YOU'RE LOOKING FOR A CAR! How fortunate can you get? But you'd better hurry, 'cause they're for "THIS WEEK ONLY!" Apparently next week the prices are going to go through the roof!
But now you're wondering how you can narrow your search a bit. You can't possibly visit sixteen dealerships in the next few days. You've got it! You'll only visit the nine dealers that have been awarded the #1 position for customer satisfaction from the ABC Car Company, or the JD Shameless research group. Have you ever seen such a responsive group of retailers? These guys must treat all their customers like gold. You can't lose!
All right, we admit it, we've been a bit sarcastic here. There are plenty of dealers that are pretty straight shooters. Undeniably, some of those ads stretch the bounds of credulity to the limit. And the fact remains that if you don't read and interpret all the fine print, some of them are downright misleading -- to your detriment.
We've selected five (in no particular order) commonly used ploys to get you in the showroom. These are based on actual ads -- we're not making this up.
The Incredibly Low Monthly Payment
There are few hard and fast rules that you should follow when leasing or buying a new or used vehicle. One of them is to NEVER FOCUS ON THE MONTHLY PAYMENT! This should not be the determining factor when selecting a vehicle. Dealers can get very creative in providing you with whatever monthly payment you want. Two common examples: Zero money down. Nada, zip. No security deposit, no taxes, no acquisition fee absolutely nothing. And all at a too good to be true low monthly payment. You know what? Read the fine print. On a purchase, you'll see one of two things: A very long payment term, or a large, end of term "baloon" payment. 84 months is not uncommon, as in 7 years. On a purchase, that's a lot of interest. On a lease, not only are you paying the interest, you'll end up paying for expensive service and repairs on somebody else's car. You may also see this extremely dangerous disclosure: Lease end value based on anticipated market value. Additional charges may apply at lease end. Never sign a lease deal under those terms. You'll likely regret it.
$2000 Minimum Trade Allowance
We've all seen them. Push it, pull it or tow it -- we'll give you exorbitant amounts of cash for your junk. C'mon people, use your common sense. Why would they give you all that money for a $200 car that doesn't run? Because they'll make up for it on the purchase price of the vehicle they're selling you. You're better off going in and saying "Just give me the the $2000 off and I won't bring a junk car in here that will cost you money to dispose of." We'd be really surprised if they don't go for it.
Bait and Switch
Yeah, we know the FTC says it's illegal. But we can't help but wonder why that low price only applies to stock# 4318. Well, that's a super low, loss-leader price. Technically, the dealer does have it in stock at the time the ad is run, so he's covered. Inevitably, by the time you get there it's either sold (probably to his sister), or you'll be convinced by the salesperson that you don't really want that model anyway. You're a big, important person and you deserve all the bells and whistles. And a much higher price....
The #1 Ranked Dealer in Customer Satisfaction
Have you ever noticed that when it comes time to fill out certain paperwork on your recently purchased vehicle, the salesman or the finance guy will ask you to sign a blank questionnaire about your sales experience? You'll probably hear, "Oh, you don't want to spend time on this. The manufacturer wants you to fill it out but it's a pain in the neck. Just sign here and I'll take care of it." The dealership will score pretty damn well on that questionaire if we had to bet on it. And it's not unheard of for these things to be, shall we say, created?
The Really Low Sales Price
Another tactic is the portrayal of a vehicle's selling price less a down payment or trade-in allowance as the actual sales price. You'll see: Honda Accord LX, A/C, AT, PW, PDL, Cassette, Only $16,500. There may be several, or even dozens of vehicles listed in the same manner. Check the fine print. Checking the bottom of the ad for tiny print you'll see "All prices reflect a $2000 down payment or trade allowance." So really, you need to add $2000 to every price listed in the ad to see how much they are really asking for their vehicles. Misleading? Absolutely. Dishonest? Not quite. And it gets a lot of people in the showroom, which is what all these ads are supposed to do.
Don't Forget TV
Every other ad on TV these days seems to be from a car company. The worst are the "Sales Events" ads. The New Year's Sales Event, President's Day Sales Event, Spring Sales Event, Memorial Day Sales Event, Fourth of July Sales Event--you get the idea. Each one promises the lowest prices and best deals of the year. Ugh.
We really don't mean to paint such a bleak picture of dealers. But who can resist poking a little fun at them? Hopefully, we have provided you with some knowledge that will make you a smarter shopper, more aware of what really goes on, and less susceptible to those amazingly creative dealer ads. Good luck -- you'll need it!