22/10/2011
The car buying season is upon us, with September and October often presenting the best opportunities for a savvy shopper. This period marks the 'model changeover,' where new model year vehicles arrive, prompting dealerships to discount the outgoing stock. However, this opportune time also seems to coincide with a surge in consumer suspicion: "Is my car dealership lying to me?" This question echoes the sentiment of many, as trust in car dealerships has seen a decline. According to a Cox Automotive survey, only 61% of Americans believe they received the best price, a drop from previous years, with nearly a third of buyers expressing dissatisfaction with their auto purchase. This article aims to equip you with the knowledge to identify and respond to common deceptive practices, ensuring you drive away with a fair deal and peace of mind.
As a consumer advocate, I've encountered a significant number of cases where motorists claim their dealership misled them during the purchase. These aren't isolated incidents. The Federal Trade Commission (FTC) has taken action against dealerships for activities such as falsifying consumer income and down payment information on financing applications and misrepresenting financial terms in advertisements. One notable case involved a dealership settling FTC charges for deceptively advertising loan and leasing terms in a regional Spanish-language newspaper. While the majority of dealerships operate with integrity, some may employ misleading tactics to secure a sale. Being informed is your most potent weapon.
Common Deceptive Tactics and How to Spot Them
The sticker price can be a deceptive starting point. I recall a personal experience where a dealership conveniently omitted a substantial "document fee" of $675 from the advertised price. This practice, unfortunately, is not uncommon. To combat this, always ask for the 'out-the-door' price. This figure should encompass all taxes and fees, providing a transparent view of the total cost. While dealerships may not be thrilled with this request, it's crucial for avoiding 'bait and switch' schemes.
Sonia Steinway, an attorney and co-founder of Outside Financial, highlights several other common dealership deceptions:
- Mandatory Add-ons: Dealers may insist you must purchase GAP insurance or a Vehicle Service Contract to secure financing. This is rarely true; these products are almost always optional.
- Forced Financing: You are not obligated to use the dealership's financing options. Explore external lenders to ensure you're getting the best rates.
- Income Misrepresentation: When applying for a loan, it's vital that your income information is accurate. A dealer suggesting it doesn't matter is a significant red flag.
Another tell-tale sign of trouble is when a dealership tries to rush you through the paperwork. Take your time, read every document thoroughly. If a dealer offers to forge your signature on any document, especially if you've left without signing a final contract, consider it a major warning sign and leave immediately.
Leveraging the Internet for Information
The internet is an invaluable tool for consumers. Websites like Repair Pal and others offer insights into pricing and service costs. The Car Care Council provides educational resources for drivers. As Steinway advises, "The internet is your friend." For accurate vehicle pricing, reputable sites such as Edmunds and Kelley Blue Book offer vetted information. If a dealership dismisses these resources, question their transparency.
Identifying a Lie: Beyond the Obvious
Detecting deception isn't always straightforward. Often, it requires a deeper understanding of how things work. For instance, a clean Carfax report doesn't always guarantee a vehicle has a pristine history. Jake McKenzie from Auto Accessories Garage explains, "Unless the owner of the car made an insurance claim, any accidents or flooding would not show up on a Carfax report."
A more insidious tactic involves dealers claiming the Carfax system is "down" when a report doesn't come back clean. They are counting on buyers not verifying the report independently. "They are banking on the fact that most buyers are unlikely to check the Carfax at home," McKenzie notes.
What to Do When You Catch a Dealership in a Lie
Discovering a lie can be infuriating, and the urge to confront the salesperson or manager might be strong. However, your first impulse should be to assess the situation critically. If they're willing to lie about one thing, what else are they hiding? Consider the long-term implications of doing business with a company that employs deceptive practices. Even a seemingly minor "white lie" could be indicative of larger, undisclosed issues.
The consensus among experts is clear: if you catch a dealership in a lie, especially a blatant one like misstating your income on a credit application, leave immediately. "Never sign your name to a contract where you know the information is wrong," warns Steinway. "Not only is it illegal, but it could result in you owing way more than you can afford."
My own experience has made me less tolerant of dishonesty. If a dealership cannot provide an out-the-door price, attempts to manipulate the price, or steers me towards a more expensive model, I walk away. Imagine the impact if more consumers refused to tolerate these practices. Would the purveyors of dishonesty be forced out of business? The answer is likely yes.
Key Takeaways for a Trustworthy Car Purchase:
| Common Deception | How to Respond | Why it Matters |
|---|---|---|
| Hidden Fees (e.g., Documentation Fee) | Always request the 'out-the-door' price. | Ensures a transparent total cost, preventing 'bait and switch'. |
| Mandatory Optional Products (GAP, Service Contracts) | Politely decline and state they are optional. | Saves you money on unnecessary add-ons. |
| Misrepresentation of Financing Terms | Shop around for external financing options. | Guarantees you the best available interest rates. |
| Inaccurate Income or Down Payment Information | Correct any inaccuracies immediately. If a dealer insists, leave. | Prevents loan denial and potential over-indebtedness. |
| Misleading Vehicle History Reports (Carfax) | Verify reports independently. Question "system down" claims. | Ensures you are aware of the vehicle's true condition. |
Frequently Asked Questions
- Q: What is an 'out-the-door' price?
- A: The 'out-the-door' price is the total cost of the vehicle, including the vehicle's price, all taxes, registration fees, and any other dealership fees. It's the final amount you'll pay.
- Q: Can a dealership force me to use their financing?
- A: No, a dealership cannot legally force you to use their financing. You have the right to secure financing from any lender of your choice.
- Q: If a Carfax report is clean, does that mean the car has no accident history?
- A: Not necessarily. Accidents that were not reported to insurance companies or law enforcement may not appear on a Carfax report. It's always advisable to have a pre-purchase inspection by an independent mechanic.
- Q: What should I do if I suspect the dealership is lying about the car's condition?
- A: If you suspect deception regarding the car's condition, it's best to trust your instincts. If possible, arrange for an independent pre-purchase inspection. If you uncover significant discrepancies or feel misled, it's often best to walk away from the deal.
Ultimately, buying a car is a significant transaction. By arming yourself with knowledge, remaining vigilant, and being prepared to walk away from dishonest dealings, you can navigate the car buying process with confidence and secure a vehicle that meets your needs and your budget, without being misled.
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