A Used Car Salesman Reveals Dirty Tricks (and How to Beat Them)
Used car salesmen are generally portrayed in the media as sleazy, greasy guys in too-tight polyester suits that are trying to take you for a ride — and not just in that lemon sitting on the lot. Of course, not all used car salesmen fit that stereotype, but at least part of that image is accurate: There are dirty tricks that they're putting into action to get that bill of sale signed… by you. (See also: 17 Things Used Car Salesmen Don't Want You to Know)
Jason Lancaster made a living as a used car salesman for a decade — at an "upstanding dealership," he says — but he's now committed to exposing the less-than-ethical business practices because he believes that "customers deserve better." He left the car business in 2007 and started a website —Accurate Auto Advice — devoted to sharing accurate advice and information with consumers. According to Jason, "The mission of the site is to give consumers advice that's 100% true. A lot of the info I see about car buying is false or misleading, and I'm trying to correct that."
Lancaster exposes some of the more dastardly car-buying schemes in the following four tactics — and some advice about combatting them.
1. The Scream
Think of "The Scream" tactic as a riff on the good cop/bad cop scenario. The gist of it is that the buyer wants a certain car or a certain price that the dealer doesn't have or can't match. At the same time, the buyer says that they're not ready to buy at the moment. Instead of sending the buyer on their way without any hope of getting what they want — which, in truth, isn't available — the salesperson plants a seed that what the buyer wants may be available when he or she is ready to buy and suggests that they contact the dealer before they make any decisions at another dealer.
"Then, you sit back and wait for the phone call," says Lancaster. "If the customer calls you for an unbelievable price, you tell them that you remember what they want and they need to come in to complete the deal. They come down to the dealership believing that you're going to meet their price, get their car, etc., and THEN you tell them the bad news."
That's where the namesake "scream" comes in. Angry that they came back to a dealer that isn't willing to give them what they want when it was suggested that they would, the buyer, in theory, takes their frustration out on the salesperson — or the bad cop, if you will. And that's when the good cop — the manager, in most cases — comes in to seal the deal.
Lancaster continues, "The manager comes over, apologizes, then explains how the customer wanted a price that wasn't realistic (or a car that isn't available), that $XX is the very best price there is, offers to throw in a freebie, and makes the deal. If the salesperson is sufficiently scolded, and the manager is good at calming people down, it can work OK."
The problem with this scenario, as Lancaster points out, is that the buyer no longer trusts the salesperson, which means that they'll never come back to them again. "It's great in the short term, but really damaging to the dealership in the long term, so a lot of dealers won't permit it."
How to Avoid The Scream
First, don't let on that you're not ready to buy right now. That's basically where this scheme begins. Instead, inform the salesperson that you're looking for a car, and you want to find the best price possible, so you're keeping your options open by visiting other dealerships.
To flip this tactic on its head altogether, round up a few prices on comparable cars from area dealers and bring them to the table with each salesperson. If the salesperson doesn't want to be competitive, and you don't feel like you're getting the best or fairest deal possible, walk. Simple as that. If they want your business, they'll work with you to find the most reasonable deal for the dealership and for you.
2. Rolling a Car They Know You Can't Finance
What's a dealership manager to do when he wants to move a vehicle off the lot, but he's dealing with a buyer who won't agree to make a sufficient or realistic down payment or who has bad credit with no chance of getting a good finance rate? Lancaster says there are two choices:
- The salesperson can tell the buyer what a realistic interest rate will be, and what that means for their payment; or
- The salesperson can tell the buyer whatever they want to hear about interest rates, have them sign paperwork and take delivery, then call them back in a week or so and tell them the terms have changed.
Did you just have a WTF moment, too? Truth is this tactic works — and it's still used fairly often for three important reasons, according to Lancaster:
- People want to believe the dealer tried to get them a good interest rate, says Lancaster. "If you bring them back, show them all the decline notices from the banks, etc., you can prove to them that you tried. Then they'll admit their credit is bad and agree to a higher interest rate and payment."
- People usually show their new car off to friends and family, often the day they get it or the day after. Losing the car a week later would be embarrassing, so people will often pay more just to avoid that embarrassment.
- Most dealerships make customers sign something called a "bailment agreement" that says the dealership can charge a very high fee for the use of the vehicle if financing falls apart, according to Lancaster. "When I was in the business, bailment was $50 a day and $0.50 a mile. If someone drives a car for a week, that's $500+. That's a big cash penalty a lot of people don't want to pay."
How to Avoid This Trick
To avoid the dealer changing your finance rate after you take delivery, consider these three suggestions:
- Secure financing before you arrive at the dealer; or
- Request that the dealer show you a copy of the bank approval (they can print it out and show you easily enough); and/or
- Don't sign a bailment agreement, at least not one that specifies payment of a penalty for miles driven and days of use.
"The bailment agreement is typically the first or last document the dealer will show you," says Lancaster. "If you see anything that says you agree to pay for vehicle use should financing fall through, don't sign it. However, understand that this may keep you from buying a car if you have poor credit. Sometimes, people with poor credit don't have much of a choice, unfortunately."
3. "This Is the Finance Rate the Bank Came Back With"
As you may know, dealers can make a percentage of a vehicle's interest rate if they can mark it up. One of the easiest ways to mark up interest rates is to bring a customer into the finance office, ask them a series of probing questions about their credit report, make a show of submitting something to "the bank," then showing them a piece of paper and saying, essentially, "this is what the bank came back with."
Another dirty trick, of course, but it works.
"The customer assumes that whatever you're showing them is the actual interest rate they qualified for, not realizing that the dealership has marked the interest rate up 2% to 3%" Lancaster explains. "This is done all the time. Even at nice dealerships. Even today."
How to Avoid This Trick
The best way to avoid this trap? Join a credit union and ask them for pre-approval on a vehicle loan. Credit unions almost always offer excellent finance rates. From personal experience, I can tell you that my husband has done this in the past, and it's always resulted in a smoother negotiation. Lancaster echoes that sentiment and offers an additional tip: "If you can't join a credit union, I'd go online and see what you can do to secure a loan from one of the lenders that partner with Edmunds.com, Cars.com, etc."
4. Failing to Disclose Damage
Prior damage to a vehicle will almost certainly play a part in your decision to buy a particular used car. But how do you know what that car has endured? Unfortunately there's no easy way to find this out — and it's not entirely the fault of the salesman or dealer.
"Depending on the damage and the state you live in," Lancaster says, "dealers may not be under any legal obligation to disclose a vehicle's prior history. The vehicle could be a 'lemon' (manufacturer buy-back), it could have suffered damage while on the dealership's lot, it could have substantial body damage — and the dealership doesn't have to say a word about it.
"While a CARFAX report can help, CARFAX reports are often incomplete. I've seen CARFAX reports that are missing considerable information, to the point where it makes me doubt the quality of their service. In any case, dealers will lie about damage or problems because they're under no obligation to tell the truth, and the consumer can't prove the dealership lied after the fact."
How to Avoid This Trick
So what can you do to at least try to get the most up-to-date, complete, and accurate information about the vehicle? The answer here isn't the most appealing, but it's sort of a better-safe-than-sorry situation.
"The best way to protect yourself is to pay for an independent vehicle inspection and buy a CARFAX or AutoCheck report," advises Lancaster. "A good inspector can usually spot a vehicle with undisclosed damage, and CARFAX/Autocheck reports are usually good about indicating if a car is a manufacturer buy-back (AKA someone else's lemon)."
If you choose to go this route, there are mobile used car inspection services in most medium-sized cities. If you live in a small town, you can take your car to the nearest independent mechanic and ask them to look it over.
How to Beat a Used Car Salesman
In addition to revealing these trickster tactics, Lancaster also has advice for car buyers, so you can walk into the dealership knowledgeable and (hopefully) maintain the upper hand.
Buy From a Reputable Franchise
Buy from a franchised new car dealership, as most of these "tricks" won't fly. New car dealers are carefully monitored by state authorities and the automakers they represent, so they're very careful.
Get It Inspected
Have whatever it is you're buying professionally inspected. It costs $100 to $150, and it's worth every penny.
Secure Financing First
Arrange financing at the local credit union then ask the dealer if they can beat that rate. Outside of a credit union, most of the larger banks have some sort of auto finance program, and most of the popular car sites have a partnership with finance companies.
Have you ever scored a great deal on a used car from a dealership? How did you do it? Please share in comments!
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