Car Salesmen's Dirtiest Tricks: What You Need to Know

If you’re searching for a new set of wheels, there’s a lot you need to know about the changing car landscape. Senior Consumer Advice Editor and undercover car salesman Philip Reed explains what you should look for now so you aren’t taken for a ride later.

Many consumers are completely in the dark when it comes to financing, Reed says, and leasing is even more mystifying. As you might imagine, this is where a lot of the abuse happens.

Beware of a salesman who offer you less money down and lower monthly payments when you’re trying to buy. It sounds too good to be true because it is; what they’re really offering you is just a lease. Sometimes it’s a five-year lease or even longer in order to get the monthly payments low. Don’t be afraid to ask over and over again whether what you’re being offered is a lease or not. Sometimes they aren’t so obvious, so look for terms like “balloon payments” and “rent to own.” If you see these, it could mean you’re being taken advantage of, Reed says.

As much financing as possible should be done ahead of time in order to avoid being bamboozled by snake oil car salesmen. If you’re leasing, Reed recommends a three-year agreement because that ensures that the car is never out of warranty. And if you think you’re likely to use more than the allotted miles – usually 10,000 over three years – extend the mileage ahead of time so you aren’t paying the penalty on the back-end when you return the car over the limit.

Some car salesmen are also known to “pack the payment,” a practice where they add extra services as filler after you agree on a monthly payment plan. Don’t go into the negotiation thinking about how much you can afford a month. Instead, think about how much car you can afford overall and design your payments ahead of time as much as possible.

Finally, look out for salesmen trying to “steal the trade-in.” This is a process that can happen if you’re looking to trade your old car in for something new. The salesman will make a fake phone call to a broker to ask what your car is selling for at auction, write down a fake number, and then lowball you, saying that the car is getting less than its Blue Book value. It’s a sleazy way for them to pocket a few thousand on the trade in, Reed says.

Pay attention, do your research and you won’t become a victim.