You've
probably heard that things that sound to good to be true are too good to
be true. This goes double for new car advertising. Most car dealerships
advertise in large headlines or a fast pitch that you need to rush down
and buy at prices you'd be crazy not to take advantage of.
But have you noticed the small print
at the bottom of the ad or the fast talk at the end of the commercial? If
you have, then you will have noticed some of the traditional advertising
gimmicks that dealers use.
Here's a few of the most common
gimmicks:
Zero percent financing
Looks
great in large print, but somewhere else in little bitty print it will say
W.A.C., or with approved credit. To qualify for zero-percent financing,
you must have a very high credit score. It should be at the least
700.
$4,000 for your trade in no matter
what
This is a very popular ad that dates back to the 50's. Don't fall
for it. No dealer will pay more than what a vehicle is worth. If he is
paying more for your trade-in, it's been added into the price of the new
car. You may lose your negotiating power in this situation. Be aware of
the true value of your car.
Buy it for just $150 a month
Or
through in any number you like. The math is easily manipulated to fit
monthly payment to the price of a car. If you finance it forever, you'll
have a lower payment. They may not even be talking purchase, but lease. Or
you may have to put a huge amount of money down.
And you will, of course, have to have excellent
credit. If you have poor credit, your
payments will be
higher. The ad could also be referring to only one car on the lot that
doesn't even have the standard options that people are looking for.
We'll pay off your trade-in
This
should be called you'll pay for your trade-in. If you owe $8,000 on your
car, but it's only worth $5,000, the dealer isn't really paying off your
vehicle. The dealer will add the $8,000 to the cost of your new car.
Because the loan will be more than the value of the new car, you will
probably pay a much higher interest rate.
Huge end-of-the-year savings
They
must make room for new models. Dealers love to say, several times a year,
that this is the single biggest chance to save the most money on a new
car. Yes, you can save money if you drive the soon-to-be-one-year on the
market car for seven years or longer. Then you won't get anything for it
when you sell it. If you sell or trade in your car every few years, a
year-old model could cost you a lot of money.
Below-invoice prices
guaranteed
Don't let any dealer tell you that he isn't making any
profit in deal just because it is below invoice. The invoice isn't
necessarily what the dealer paid. He may be getting a rebate and a dealer
holdback fee. This is a percentage of the price held back by the
manufacturer that is paid to the dealer upon the sale of the vehicle. The
percentage usually ranges between 2% and 3%. You can check the blue book
value to get the real invoice price.
