The Car Buying Guide for Extreme Savers

How Dealers Use "Menu Selling" to Rip You Off

Over the years, dealerships have discovered a very effective tool called "menu selling", used in the finance office to squeeze the maximum profit out of each customer.

Dealerships can make half their profits selling "back end" products such as extended warranties, GAP insurance, and paint/interior protection.

The way they present these products is through a menu of packaged items - usually color-coded to psychologically induce you into choosing one over the other.

Here's an example of what you may see:

Menu Selling

The problem with menu selling lies in the way they present the costs. Instead of listing the price of each item, they list the additional monthly payment you'll have to pay which makes these products look cheaper than they really are.

A $1,000 product will only cost about $14 per month on a 72 month loan.

Many consumers assume they have to choose one of the packages and since the additional monthly payment doesn't seem so bad , they fall for this simple trick.

First, realize that you don't have to choose any of the products.

If you do want them, ask what the actual dollar amount is for the product, then do some comparison shopping.

You can always buy these products and services later or even from a competing dealer or online service.

Don't ever blindly agree to a product package - this is one of the easiest ways people get ripped off.

My Recommendation for New Car Shoppers

TrueCar No-Haggle and Edmunds Price Promise are the quickest way to see the lowest prices available on new cars in your area. Both tools provide upfront prices from local dealers, and the deals are usually really good. It should be the first step you take when negotiating car prices. You should follow that up with my checklist to make sure you get the best possible deal.
- Gregg Fidan

Gregg Fidan

About the Author: 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.

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