The Internet has ruined everything for car dealerships. Too much information. Intelligent, patient, and otherwise prepared consumers have all of the tools available to them to make informed decisions.
As one dealer GM was once recorded saying during an interview, “Thank goodness for the idiots who still listen to the ads.”
1) Push, Pull, or Drag Sale
A piece of junk on Wednesday is still a piece of junk on Saturday. There are ads that claim that no matter what condition you trade is in, they’ll give you $1500, $2000, or even $3000 for it in trade.
Foolish people flock in. Some even drive off with a new or used car. They were given $3,000 for their 1983 Chevette and they feel like they just ripped somebody off. The truth is that they probably just got ripped off.
Most car dealers have around $2000 to $2500 worth of markup built into the price of their lower end vehicles and more (sometimes much more) built into their higher priced ones. When they put on their Push, Pull, or Drag sale, all they do is mark up their vehicles an additional amount equal to their “minimum trade allowance.” By doing this, they can give you a ton for your Chevette and still make thousands.
2) $10,000 Best Price Guarantee
This is a great one for traffic. Many dealers claim that if they can’t beat a deal, they’ll give you $10,000. They might as well say they’ll give you $10,000,000, because it isn’t going to happen either way.
When it comes to new vehicles, the market is impossibly competitive. 95% of new car dealers will match the price than any other dealer gives on an exact same vehicle. But not all of them guarantee the claim with money, simply because they don’t want to insult the intelligence of the consumer.
The bad part is, not all consumers are intelligent enough to recognize that unless another dealer is willing to lose more than $10,000 on a vehicle, they’ll NEVER pay the money.
3) Buy a Car, get a “Free” _______(fill in the blank)
Big screens. Camcorders. Computers. Whatever the item is, it isn’t free. The price is simply built into the cost of the vehicles. A car deal that would normally bring $3000 profit may “only” bring $2200 after they give you the $800 gift certificate to Circuit City or Best Buy.
4) “When we make a deal, we’ll pay off your trade no matter how much you owe!”
They might as well say, “When we buy groceries, we’ll pay at the register no matter how much we owe.”
The key phrase in this sentence is “When we make a deal…” Paying off the trade is part of making the deal. If they cannot pay off the trade because the consumer owes too much, they won’t make a deal. It’s the kind of doubletalk that gives car dealers a bad name.
5) Half Price Program Car Sale
Many cars, especially domestic mid-sized sedans, depreciate quickly from their original MSRP. A Lincoln Town Car, for example, may have an MSRP around $50,000. After the deep rebates and discounts, it’s possible to buy one a few month before the next model year in the low $30’s.
After a year and 20,000 miles, they can be purchased at the Lincoln dealer auction for the low $20’s. Dealers can then mark them up modestly and still sell them for half the price of the original MSRP.
While this isn’t exactly a scam, it can be misleading and is a perfect example of how the domestic market needs to reduce prices instead of keeping the prices high and offering huge rebates.
To see if the vehicle is really a good deal, find similar ones on some of the automotive classified sites like Autotrader.com, New York City Used Cars, or Cars.com.
6) The Good Old Fashion Loss Leader
This is by far the most common dealer scam out there. No, there is nothing outwardly dishonest about it, but it can be misleading nonetheless. A loss leader is where the dealership advertises a vehicle at a greatly discounted rate. While they may have 50 Honda Civics to choose from, they only have one or two that can be sold at the advertised price.
The loss leader is usually stripped down with no options, manual transmission, and sometimes even with no air conditioner. Consumers come in to buy it, but usually get switched to one that has more of what they want.
7) Internet Price Discounts
This one is not always a scam, but usually it is. You have to read the fine print.
For automotive websites, the number one data capture tool is the pop-up or some variation. They may come up as soon as you enter the homepage, after you close it, in front, behind the browser, or any of the clever new ways to lock customers into filling out the information form. Normally, they offer a few hundred dollars in discount for printing and bringing in the coupon, “check”, or voucher.
In the fine print, most will say that the discount voucher must be presented before negotiations start. In other words, “Show me the voucher so I can include that value in our discount.”
Most dealerships have some measure of room in their prices to allow for discounts. These vouchers normally will not help get any larger discount than if the customer never brought them in, but hey, the voucher did its part to get you in, didn’t it?
Not all new and used car dealer websites offer these frivolous discount vouchers. Some of the more respected ones from coast to coast use good website strategies to show their cars, offer their services, and help consumers make a deal.
Dealerships like Oklahoma City Ford Dealers and Washington Ford use honest and quality methods to not only have a great dealership, but also great websites.
$88 Down, $88 per Month
For anyone who doesn’t think this may be a scam, please do the math. Better yet, check a payment calculator. A $10,000 car at $88 down, $88 per month at 6.9% would take 181 payments to pay off.
That’s a month longer than a 15 year mortgage.
In the fine print, you’ll find that the $88 per month is introductory and the real payments kick in on the fourth payment.
9) $199 Month SUV
Similiar to the previous, but different. Again, read the fine print.
It is either a long lease with a large down payment or it’s a purchase with 25% down and a 96 month term. That’s eight years for anyone who is counting.
This is one of the best scams because it usually results in switching the customer from a new to a used one that will allow higher profits. Dirty, dirty, dirty.
10) Buy One, Get One Free
This is the granddaddy. Buy a car, and get a second one for no additional cost. WOW!
Just make sure you get a good driver to go with you to bring the 1989 Nissan Sentra with flood damage home with you after you overpay for your other vehicle.
J.D. is a freelance internet writer and aspiring screenwriter. He also works as a Search Engine Optimizer for several automotive websites, including Oklahoma City Ford Dealers, New York City Used Cars, Car Buying Tips
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