The 3 Main Ways Car Dealers Can Rip You Off
Getting a good deal is not rocket science, but it does take research to figure out how to do it right. Most people are either lazy or unimformed and aren't willing to invest their time, even though they can save upwards of $5,000 on a typical deal.
Dealers sell vehicles every single day. They know every type of customer, all their objections, and tactics to pressure and profit from them.
A typical car buyer only buys a car once every 5 to 6 years. There's no way they're going to outsmart a dealer without being fully prepared.
But the statistics show that 80% of car shoppers try to negotiate at the dealership instead of doing everything via phone or email. They also finance their cars through the dealership and trade-in their old car without thoroughly shopping it to other dealers.
Of course, dealers love it because those are the 3 main ways they make money off of clueless shoppers.
- The Price of the Vehicle
- The Financing
- The Trade-In
Most car shoppers focus only on negotiating the price of the car. That's fine with dealers, because they can easily give you a good price while completely ripping you off on the financing and trade-in.
If you focus instead on your trade-in, that's fine too. The dealer will simply raise the price of the car and screw you on the financing.
The main point is that dealers will juggle these 3 profit sources so that you get a good deal on whatever you're focusing on, while being ripped off on the other two.
Always make sure you seperate each transaction into its own negotiation. Don't let the dealer package everything into one monthly payment.
My Recommendation for Car ShoppersTrueCar No-Haggle, Edmunds Price Promise and Ryde Shopper are the quickest way to see the lowest car prices in your area. These sites show you no-haggle prices from dealers closest to you - and the deals are usually really good. This should be the first step you take when negotiating your car price. Follow this up with my checklist to make sure you squeeze out every last bit of savings.
- Gregg Fidan
- Best Rebates, Incentives, and Lease Deals
- Latest Car Buying Scams and Tricks
- The Best & Worst Time to Buy a Car
- Which Cars You Should Avoid
About: Gregg Fidan
Gregg Fidan + is the founder of RealCarTips. After being ripped off on his first car purchase, he devoted several years to figuring out the best ways to avoid scams and negotiate the best car deals. He has written hundreds of articles on the subject of car buying and taught thousands of car shoppers how to get the best deals.