Dealerships Use These Tricks to Make You Spend More!

If you’re thinking of buying a car in 2024, try to hold off until July 30. That’s when the Federal Trade Commission’s new CARS rule goes into effect, which forces dealerships to stop using shady tactics like peppering you with hidden fees, overcharging for silly extras like nitrogen in your tires, and luring you in with fake online prices. 

Many dealers are honest but how many will keep acting shady, even after the rules go into effect? I’ve seen car dealerships brazenly ignore consumer protection laws that are already in place. Which is why knowing these tricks can save you money.

The CARS rule will help bring some controls on overcharges that consumers pay and have no clue on how to escape them.

Here are the most common dealer ripoffs to look out for, and how to respond. Not every dealer will try such shenanigans, many of them are perfectly reasonable and easy to deal with, but some dealers will and it pays to be prepared!

1. Adding Junk Fees to the Advertised Price

The bait-and-switch scam is a form of fraud that is so common among car dealerships that many states like Texas have laws that state: “When featuring a sales price of a new or used motor vehicle in an advertisement, the dealer must be willing to sell the motor vehicle for that featured sales price to any retail buyer specifically telling them”.  

Here’s how the scam works: You find a car you like online for a great price with taxes and fees. You head to the dealers and take it for a test drive, fall in love with it, and are ready to sign on the dotted line. Except your estimated monthly payment is way higher than you thought it would be. You dig deeper and see the dealer is charging you more than the prices you found online. Why is that?

The dealer added a “reconditioning fee” or “protection package” to the price at the last minute. You protest but they say, “We add that to every car we sell” or “It’s a great value because you’re getting our protection package with all these extras.”

Regardless of their justification, the bottom line is that they car-catfished you. They told you one thing online, and when you showed up, it was something else entirely. 

So what can you do? Well, you can always cite your state’s consumer protection laws and see if they buckle. Or before go for a test drive or even set foot in the dealership, call, email, or text them with a simple question: “Please send me the itemized invoice with the final, out-the-door price.” 

This is dealer-speak for “Cut the shenanigans and send me the real price.” The out-the-door price is an industry term meaning the exact dollars and cents that you’d have to pay for the car, and the invoice is simply the receipt showing every fee that factors into the OTD. Mentioning both terms shows that you’re an informed consumer!

Naturally, some dealers will resist your attempts to expose their hidden fees, but they want your business. There are always others dealers across the country that want your business.

2. Overcharging for Extras

Dealerships are like Disneyland, everything costs more just because you’re inside. The upselling services are endless. They know that safety and security sells all day long.

The dealer markups on these services can be as high as 4,000%. You can buy these services or products separate from your monthly payments and save big money.

This upselling happens in F&I, the finance and insurance office. Once you’ve told your salesperson that you’re ready to buy, they’ll escort you to F&I where you’ll sign tons of forms, discuss financing, and get the actual keys. It’s also F&I’s job to upsell you on all this extras while you’re still excited about your purchase. 

Be prepared by saying no thanks and don’t let them use pressure to convince you to buy in now. That is the sales tactic. 

3. Pretending They Don’t Negotiate

Some dealers claim the price is on the window, GM tried that with Saturn and where are they now. Great idea, but people like to haggle. The best way to handle these types of dealers is who say, we won’t budge doesn’t require any scheming. Just bring them a better price from a competing dealership and ask them to beat it. They will then move on the price, simple, shop around. 

4. Refusing to Fix or Replace Your New Car

If you just purchased your new vehicle and there is a part failure, that can happy with literally any brand. Maybe your engine is idling rough, your infotainment screen won’t work, or your car won’t start. 

Whatever the issue, you’re not happy, especially given how much money you just spent, so you take it back to the dealer and they quote you a price to fix it. If you feel like this should be the dealer’s problem and not yours, you’re right!

All new cars sold in the U.S. include a bumper-to-bumper warranty lasting for at least three years or 36,000 miles from the date your car first sold to its original owner, whichever comes first. The factory warranties guarantee the vast majority of the parts on your car against defects which includes the engine, transmission, or parts that stops working for no reason, the dealer is obliged to repair it free of charge. The manufacturer will cover those costs.

If the service department claims it blames environmental factors, which aren’t covered under warranty. This is typical of a dealer not wanting to make a claim with the manufacturer. 

Here is a simple rely that will work: “Your warranty states that you’ll replace any defective parts in the car. I’d rather not involve [name of your car’s manufacturer] and my attorney in this matter, but it’s a step I’m willing to take.” 

Like any other business, dealers don’t like lawsuits. They also know that if you involve the automaker itself, it’ll often force the dealer into compliance, they want your return business so they will give in. 

If the dealer has tried to fix the same problem multiple times and it keeps persisting, you may be legally entitled to a total replacement. It’s called the Lemon Law. Every state has it and the state attorney general is available to you at no charge.

The Bottom Line

To end on a positive note, the CARS rule is a massive win for car buyers, and many dealerships didn’t need it in the first place. But there are also dealerships out there that will try one of these sneaky tactics when you’re shopping for your next car.

But if you go in confident and prepared, you’re more likely to walk away with the car you want at a price you can afford. Share this advice and help others.

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