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Most auto dealers aren’t out to give you an unfair deal. But as an informed consumer, you’ll want to be prepared for situations where a salesperson uses aggressive tactics to maximize profits. If you know what to watch out for, you can swiftly and firmly avoid maneuvers that could drain your time and money.
These are a few ploys some car dealers — even the most legit — may try to run on you when it comes time to buy.
A dealer may tell you that you don’t qualify for competitive rates. And while this may be true in some cases, the salesperson will imply your credit is worse than it is, so you think you’ll have to pay a higher interest rate.
Auto Car Guides
How to avoid:
Come in with your credit score on hand before you sit down with the dealer so they can’t trick you. Better yet, get preapproved for an auto loan so you don’t have to rely on dealership financing.
Many people view buying a car as one transaction. It’s not, and dealers know this. It’s really three transactions rolled into one: the new car price, the trade-in value and the financing. All three are ways for the dealer to make money — meaning all three are places you can save.
Auto Car Guides
How to avoid:
Treat each transaction the same way the dealer does: separately. In fact, you can shop your trade-in at multiple dealers to get the best price. And coming in with common sale prices for the car you’re interested in will help you keep the salesperson honest.
The sales or finance team might throw out a great monthly payment — one that you reasonably could qualify for. But there’s often a catch. In some cases, the dealer may have factored in a large down payment or stretched the term of the auto loan to 72 or 84 months.
Auto Car Guides
How to avoid:
Focus on the price of the car rather than the monthly payment. Never answer the question, “How much can you pay each month?” Stick to saying, “I can afford to pay X dollars for the car.” You should also make sure that any price negotiated is the full cost of the vehicle before your trade-in or down payment is applied.
The vehicle price listed on the window is what is known as the manufacturer’s suggested retail price, or MSRP. But that isn’t what is most important. You want to know the invoice price — the amount the dealer paid for it. Ultimately you will pay an Out the Door (“OTD”) price, which includes taxes and various fees. Knowing what the dealer paid can help you to stay clear on your line-item expenses when buying the vehicle.
Auto Car Guides
How to avoid:
Find out what cars are selling for after considering any consumer and dealer incentives. Some hot cars go for sticker price and above. Be patient and wait: The prices will fall as demand lessens. And if you are unfamiliar with a specific fee or charge being quoted, don’t be afraid to ask for more information.Spot delivery, also known as spot financing, allows you to sign a contract and drive your car home before the financing is finalized. While it is often legitimate, it can sometimes used to back you into a loan with higher rates than what you might otherwise qualify for.
Yo-yo loan scams operate by “qualifying” you to borrow at a specific appealing rate. Then, the dealer will notify you at a later (and often inconvenient) date that you’ve not qualified to borrow under those terms. Then, surprise! The only way to stay in your new vehicle is to agree to a far more expensive loan.
Auto Car Guides
How to avoid:
Know in advance what kind of interest rate you qualify for by prequalifying with other lenders. Confirm that you have been approved for the financing your dealer offers, and only leave the showroom with contracts in hand that include all of your loan specifics.
In the event your financing really does fall through, the dealer should be willing to call off the sale of the vehicle per a clause in your financing agreement known as the owner’s right to cancel.
Some dealers may try hard to get you to purchase insurance coverage when you’re buying your car. One type, gap insurance, covers the difference between what the car is worth and the amount you still owe on it. It’s usually just an extra expense, but if you do want it, gap insurance is generally cheaper when purchased from your regular car insurance company.
Another favorite, credit life insurance, will pay the balance of your loan if you die before you’ve been able to repay it.
If these policies interest you, understand what you are purchasing and know that you can decline it in favor of shopping around for a better price. The markup on insurance coverage offered directly through the dealership can be substantial, and you may be able to score better terms with your auto insurance company.
Auto Car Guides
How to avoid:
Don’t automatically agree to the insurance offered. Some insurers include the benefits of gap insurance in their regular comprehensive automobile coverage, so check there first. As for credit life insurance, you’ll more than likely want to avoid it. In most cases, it won’t make sense for you.
It certainly sounds tempting — 0 percent interest to finance a new car. However, this deal may not be the best one for your pocketbook. Most financing incentives are for shorter terms, and you need a stellar credit score. And with short-term loans, such as 24 or 36 months, payments on even a moderately priced car can be hefty.
In addition, you may be better off finding your own financing and then taking the dealer rebate if one is offered. Say you’re looking at a $20,000 car and will get $4,000 for your trade-in. You can choose between 0 percent financing or 3.49 percent with a $2,000 rebate. The term of the loan is 36 months. At the loan’s end, you’ll come out ahead by more than $1,200 if you take the rebate and the 3.49 percent financing.
However, in today’s rate environment, even those with excellent credit typically see rates of 5 percent or higher.
Auto Car Guides
How to avoid:
Run the numbers yourself to figure out which deal suits you best . In some cases, a lower APR may save you more over the course of your loan than even a generous cash-back offer at signing.
It can be tempting to trade for a more expensive car before you have finished paying off the car you’re currently driving. Some car buyers do this by rolling over the remaining payments on their current car into a new car loan or lease.
This is a risky move. You could owe more on your new loan than the vehicle is worth. In the lingo of automobile loans, you’ll be “upside down” on the vehicle. Then, if it is totaled in an accident or you decide to trade it in, you will write a big check to cover the remaining loan amount.
Auto Car Guides
How to avoid:
You don’t want to roll over an old car loan into a new one. Instead, try to get a good price for it as a trade-in or through a private sale. And if you can’t, stick with it. Unless you desperately need a new car, there is no reason to buy a vehicle before you have paid off your old one.
There is nothing illegal or even deceptive about dealers offering loan periods extending out six or seven years. In fact, nearly one-third of auto loans in 2023 have a term of six years or longer. That said, many cars last longer than they used to, and longer loan terms mean your monthly payments are lower. Still, it’s not ideal. You are likely to continually owe more on your car than it’s worth because it depreciates faster than you’re paying it off.
Auto Car Guides
How to avoid:
If you are considering a long loan period, you probably should scale back to a less expensive car that is better suited to your budget.
Similarly, some dealers will encourage you to purchase a car for unrealistically low monthly payments now but with a much larger “balloon payment” at the end of the loan term. Though payments early on can be manageable, many borrowers struggle to come up with a lump sum payment at the end of their loan period.
A balloon loan can be a legitimate way to finance a car. For instance, you may have just graduated and can realistically assume that your income will rise by the time the balloon payment comes due. But for most people, a balloon payment just means rolling over the remaining balance into a new loan.
Auto Car Guides
How to avoid:
Be wary of these offers and know that your financial situation may change by the time the balloon payment comes due.
The bait and switch happens when you go in looking for one car and the dealer manages to get you behind the wheel of a different one. Dealers may use deceptive strategies to get you on the lot, only to tell you the car you want isn’t available and then try to sell you on something else, often at a higher price.
Auto Car Guides
How to avoid:
Stick to what you want. If you did your research and know what you are looking for, then there’s no need to second-guess yourself. Wait it out or try another dealer that does have the car you want.
Keep an eye out for clauses tucked into the fine print that you might otherwise miss. They might be changes to the loan term, add-ons that you never agreed to or other services that can lead to significant costs.
A legit lender won’t try to dupe you like this, but it pays to be careful. If you notice any discrepancies, point them out. And if the dealer isn’t willing to fix it, walk away.
Auto Car Guides
How to avoid:
Read over the contract carefully. Ask about all charges and make sure the terms are clear to both you and the dealer. Make sure you keep a copy of the contract in case anything comes up later down the line.
Buying a car can be stressful, but don’t let the fine print of a contract make you sweat. Take your time to read everything over and ensure you understand. Knowing what to watch out for and understanding what kind of rate you’ll qualify for can help you to remain in control of the situation.
If you feel pressured or uncomfortable at any point during the transaction, remember you hold the power as a consumer. Walking away from a sketchy contract is likely to save you from a headache down the road.
Although there are now more than 53,000 U.S. public charging locations, most of them are Level 2 chargers—the same kind you’d have installed at home—and take many hours to fully charge a battery (more on that below).
If you’re on a long road trip, you’ll most likely want to charge at publicly accessible DC fast chargers. These are becoming more common, even if they aren’t as ubiquitous or easy to use as gas stations. Most of them are available off major highways or at rest areas.
How easy they are to use can often depend on what kind of vehicle you drive and brand of charger you’re trying to use. Tesla owners have access to a wide network of Tesla Supercharger charging stations, and we have found that they make topping up a Tesla seamless, convenient, and relatively quick. Owners of other EVs rely on a patchwork of chargers that aren’t always convenient to access, might not always charge rapidly, and usually require the user to fumble through an app or swipe a credit card to activate the charger. (Some—but not all—Tesla Superchargers are opening up to owners of EVs from other brands.) Nissan Leaf owners will have to search for a fast charger with a specific kind of plug, called CHAdeMO, which isn’t used by any other new pure EV sold in the U.S.
Many automakers have said their vehicles will be compatible with some Tesla Superchargers starting in 2024. We’re keeping a close eye on this development.
Plugging in a vehicle can require more physical effort than gassing up a car, too, especially if you have to drag a heavy cord to reach the car’s charging port. There are no “full serve” charging stations, and because EVs have their charging ports installed in various places on the vehicle, not all chargers are conveniently set up for a charging cord to reach the outlet.
Before you go on a trip, download apps that can help, such as those from the ChargePoint and Electrify America charging networks. PlugShare is helpful for locating public chargers, too. Some vehicles have charging station data built into their navigation systems and can send you on a route that includes fast chargers. A Better Route Planner is a great smartphone app alternative that will help you plan trips with included charge stops. Always have a backup plan in case a charger isn’t working or takes longer to charge than you expect.
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