Common Ways Dealers Cheat You
Price Changes & Sneaky Ads
- There is a good chance before you went to the dealership you found them online first by searching for a car on the Internet.
- A dealer cannot legally sell you a vehicle for more than the advertised price, even if you didn’t see the ad, so pay attention to this. If you are buying a new vehicle, the dealer is required to post a Monroney label with the Manufacturer’s Suggested Retail Price (MSRP).
- Sometimes dealers add “mark up” to their vehicles by using an addendum sticker to the MSRP. This has become very common since the Covid pandemic. Dealers do this to start the negotiations above the MSRP. Don’t fall into this trap. Always start the negotiations at MSRP or Edmunds.com’s actual vehicle price.
- If you are buying a used vehicle, take a screen shot of the advertised price. Bring it with you to the dealership to make sure you don’t get overcharged. If you are buying a used vehicle, read the description of the vehicle. Does it tell you how many owners there were or how the vehicle was used in the past?
- If the dealer tells you to e-mail for today’s price, send the e-mail and save the price you get.
- If the dealer puts a link to a Carfax or Autocheck in their ad, click on it and see (a) if it is actually for the advertised vehicle and (b) if it provides any useful information about the vehicle’s past.
Keep an eye out for "included" products!
- Dealers really try to push add-on items such as an anti-theft system, a service contract, nitrogen in the tires, etc. because they do not make much on the price of the vehicle.
- They will often add these optional items on the vehicle price or monthly payments without telling you. You do not have to get any of these extras.
- If they tell you not to worry because it is already in your monthly payment or it is free – you should be worried, because it is not free. You are always paying for it. If they insist that it is free, then ask them to confirm this in writing.
- Dealers are required to give you a breakdown of what your monthly payment is with and without additional products. Make sure you read that form before you sign it and the contract to buy the vehicle.
- When the dealer told you what your payment would be, was it based on all the additional products included in the disclosure form? If you don’t want the additional products, tell the dealer and don’t sign the disclosure form and contract.
Trade-in Overestimation
- Sometimes a dealer agrees to value a trade-in vehicle at the balance due on the trade-in vehicle, leading the buyer to believe he will not owe anything on the trade-in.
- Instead, the dealer values the trade-in at its actual value, usually below the balance due on the trade-in, and adds the difference to the cash price of the vehicle. As a result, the customer pays more in sales tax and registration.
- Prior to going to the dealership, research the trade-in value of your trade-in vehicle online at Kelley Blue Book online or Edmunds.com.
- Contact your finance company and ask what the balance and payoff on your trade-in vehicle are before you go to the dealership. Then pay attention to what the dealer puts on your contract.
Failure to Disclose Material Facts about a Vehicle
- A dealer has an affirmative duty to tell you certain “material facts” about a vehicle, whether or not you ask for them.
- This includes disclosing if a vehicle was a “lemon law” buyback, a prior rental, a prior salvage or “total loss”, or had been in an accident that required major repair work such as frame or suspension damage.
- Be sure to ask the dealer if the vehicle was in an accident or has any other problematic history. If the dealer employees tell you they don’t know, ask for the results of their inspection of the vehicle in writing.
- Always ask for permission to take the vehicle to your own mechanic for an inspection.
Failure to Provide a Contract in Your Own Language
If you negotiate a contract primarily in Spanish, Chinese, Vietnamese, or Korean, a dealership must provide you with a translation of the contract before you sign the English version. Failure to do so is against the law.
“Certifying” Defective Vehicles
- A certified used vehicle or certified pre-owned vehicle (CPO) is a used vehicle that has undergone an inspection and received certification from a manufacturer or dealer.
- In theory, they guarantee that the vehicle is in good working order and comes with an extended warranty.
- While manufacturers seem to like to compete about how many points they inspect, take a look at the inspection checklist to see if they count each tire as a single point or some other means on inflating the number of points being inspected.
- Dealers are required to give you a completed inspection checklist that shows you the results of the inspection.
- Many dealers, however, perform the repairs and then check the box on the list that everything was fine. That is misleading and, depending on what they covered up, may be illegal.
- In many cases, dealer certification is covering up the fact the vehicle has prior body or frame damage, is a former salvage, or has any other number of deficiencies.
- There is no industry standard for what qualifies as “certified”, and the definition varies from manufacturer to manufacturer and dealer to dealer.
- Make sure you ask for the checklist and any repair orders associated with the certification process.
- Simply put, if a dealer doesn’t want to show you, then you probably don’t want to buy the vehicle.
10 Day Right to Cancel
- The backside of your contract provides that after you sign the contract, the dealership can cancel it within 10 days if it notifies you that it wants to cancel, because it was unable to find a finance company to purchase your contract. This only applies to the dealership, not you.
- You do not have the right to cancel. If the dealership does not notify you of its intent to cancel within 10 days, then the contract is binding on both parties.
- If the dealership cancels within 10 days, you do not have to sign another contract. You can return the vehicle and get your money back.
- If the dealer asks you to come back in and sign a new contract, that is entirely up to you. If it is a better deal for you, and you want to keep the vehicle, then you should feel free to sign a new contract.
- When you do sign a new contract, be careful. Often dealers change multiple numbers on the contract while telling you something different.
- If you are asked to sign a new contract, make sure you read it to know whether you want to agree to the new terms.
Changes to the Price of Extras on a Second Contract
- When a dealership presents to you a second contract to sign, often the price of the vehicle or the annual percentage rate will go down.
- The dealership is doing this because the finance company is telling the dealership that it will only finance up to a certain amount.
- To offset the amount they are losing on the price of the vehicle, the dealership will sometimes tell you that you have to pay more for a service contract or GAP insurance than you did on the first contract, or it may tell you that you have to purchase one of these items.
- This is illegal, and the dealership is not allowed to do this. The dealer may also tell you that now you have to buy an additional product in order to get the deal financed. Again, this is illegal.
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