Have you ever had an experience like this?: You’re in the market for a new car and you see an ad for what seems like the perfect car at a price you can afford. You head down to the dealership and you find out things aren’t quite what you expected.
That price doesn’t include many features they just won’t sell the car without. And, of course, there’s the warranty they want you to buy. On top of all that is the interest rate on the monthly payment.
Online auto retailers and direct-to-consumer brands like Tesla have been shaking up the car buying industry in recent years, but many car dealerships are still using confusing sales techniques and tactics to pressure folks into spending more than they planned.
Keith Barry, senior writer and editor for Consumer Reports’ Auto Test Center, knows all about this. He recently spoke with former car sales folks and some of Consumer Reports’ car-buying experts about how you can avoid car salesperson gimmicks.
Barry joined the Standard to tell us about what he learned.
1. Know the price before you get to the dealership
It may sound cliche, but Barry said this old adage is useful when shopping for a car: “if something looks too good to be true, it probably is.”
Barry said advertised prices often factor in rebates that many buyers don’t qualify for. Added fees and unwanted accessories are other things to watch out for.
Consumer Reports buys over 50 cars a year for its test program. Its buyers, including Barry, are always on the lookout for the best price.
“What we do and what we recommend is to start the communications over email and ask for something called an ‘out-the-door price,’” Barry said. “That’s going to be with all the taxes, all the fees, what that monthly payment looks like and what the total price of the car looks like.”
2. Be wary of price changes when you get to the finance office
One thing that adds to the confusion for buyers is being passed around to various dealership employees. You might start with a salesperson and then speak to a sales manager and a finance officer before everything is said and done.
It may be helpful to get pre-approved for a car loan from your bank or credit union before visiting a dealership. That way, you know what kind of interest rate you qualify for. If you don’t know, the dealership may inflate the interest rate on your monthly payment.
“Say you qualify for six percent financing on a car – the dealer can mark it up to eight percent and keep the two percent for themselves,” Barry said. “They don’t have to tell you about it.”
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3. Don’t focus on the monthly payment
The salesperson needs to know how much you can pay per month to determine if you’re a qualified buyer. But, they can also use that information to upsell you. Barry said if you suggest a payment amount, the salesperson will often use that as a minimum you are willing to pay per month.
“If I say I’m willing to spend $300 a month, they’ll say ‘at least $300 a month’ back to you,” Barry said. “And that’s meant to get you thinking that $325 or $350 isn’t that much more.”
Additionally, talking about monthly payments, a trade-in, interest rates and total cost all at once can quickly become confusing. That’s why it’s best to focus first on the total cost and then figure out the other details.
4. Now is the time to get a deal on an electric vehicle
While the new car market is leveling off after pandemic price surges, used cars still remain in high demand.
If you’re thinking about buying a used car, you may want to wait. Current high interest rates mean a lot of people are shopping for older, less expensive cars – driving up demand.
Electric cars, on the other hand, are finally becoming more affordable for more Americans.
“Demand is cooling for electric cars,” Barry said. “So if you’re shopping for an electric car, you might be able to get a real deal.”
5. Don’t get too emotional
Over the course of the buying process you might have to wait on the finance manager or sales manager. During that downtime, it’s easy to get attached to a specific vehicle – getting back in the car, playing with the knobs, adjusting the seat. Barry said this alone time with the vehicle isn’t an accident.
“The timing of the sale is controlled by the dealer,” Barry said “It’s designed to make you wait, but also give you a sense of urgency that you have to make that deal.”
But, ultimately, the buyer has the power in this situation. At any point in the car-buying process, if you feel too much pressure, don’t be afraid to walk away.
Barry walked away from a car purchase he was making for Consumer Reports when the salesperson claimed to have made a mistake in the price. The salesperson tried to tack on an extra $1,000 at the last minute. Barry declined and walked away.
He said moments later the sales manager ran after him and said, “just this once we’ll waive the $1,000 for you!”
