Buying a new car is a significant financial decision. While the car buying process can be exciting, there’s also a level of intimidation. After all, you’re going up against a trained salesperson when visiting a car dealership. And while your average car salesman may not be shady, there are tactics they use to maximize the sale in their favor. Familiarize yourself with these tricks used at car dealerships before you go car shopping. You’ll be able to recognize these tactics if the car dealer starts to use them on you.
While there are ways you can use to protect yourself as the car shopper, like getting pre-approved for financing, it also helps to become aware of tactics a car salesman could make. Many car dealer tricks are obvious. Others are more subtle but can greatly influence your decision.
Here are five lesser-known psychology tricks used at car dealerships, along with tips on how to avoid falling victim to the power of car salesmen.
1. Showing You a More Expensive Model
Prior to visiting a dealership, most people have a car in mind they want to see. When you share this with the salesperson, they will typically show you a vehicle right above the model you asked for. While this may seem harmless, the dealer’s goal is to show you models with extra features that raise the sticker price.
The car dealer trick is that people don’t like to “lose.” Customers tend to go to greater lengths to prevent losing something rather than gaining something of equal or greater value. So, after the salesperson goes over all the bells and whistles of the higher-priced vehicle, they will show you the lower model you initially requested. Then, the dealer makes you feel like you’re missing out. They will repeatedly point out that you’re sacrificing certain features with the lower model.
This dealer tactic makes you focus on what you’re losing out on. Yet, many of those add-ons may be features you didn’t even necessarily want in the first place.
The dealership will also use the bait-and-switch tactic. They’ll advertise that they have a popular car at a great price. Yet, when a potential buyer gets there, that car is miraculously already sold or not available. This gives the dealer a chance to show you another model that’s usually priced higher than the one advertised.
WHAT CAN YOU DO:
- Walk away. You should visit multiple dealers to find one that has exactly what you want. Remember, “No thank you” is a full sentence. Stick to your guns!
2. Wearing You Down by Taking a Long Time
With all the advancements in technology today, you can only wonder why buying a car takes so long! Buying a new car can often take hours, if not all day. The dealership sells cars all day, every day. Surely, they could have come up with a quicker process by now, right? Who wants to spend all day at the dealership? No one, and that’s what they’re counting on. The salesman wants you to get frustrated and impatient.
Buying a car could be a much quicker process. But, to maximize the sale, car dealers will often drag out the event as long as possible. This strategy wears you down. The salesman knows you’ll eventually become frustrated. This way, you’re more likely to agree to terms in their favor just to finish the process. It’s a dealer tactic you’re almost guaranteed to experience if you bring your small children along. So, leave the kids at home when you’re looking for new cars.
WHAT CAN YOU DO:
- Leave kids at home. Salespeople will use your frustration and desire to finish quickly against you.
- Never go car shopping when you’re pressed for time. If you have somewhere else to be, skip the dealership. Wait until you won’t be stressed trying to make a quick deal.
3. Rushing You to Buy Based on Inventory
Dealerships are famous for telling the potential customer that they must act now or the car might not be there tomorrow. With the limited new car supply (due to microchip shortages), this tactic is actually truer today than before. However, the salesman is using it to their advantage.
It’s easy to tell a potential buyer that if they don’t buy the car now, it will likely be gone tomorrow. This rushes the car buyer. However, even with the chip shortage, the dealership can usually get the same or similar vehicle within a week or two.
WHAT CAN YOU DO:
- How do you avoid this tactic on the car lot? Plan ahead. Start shopping before you get rid of your old car. If you’re leasing now and plan to buy your next car, start looking at least 2-3 months before you turn in your lease. That way, you’re not under pressure to find a car. If the dealership doesn’t have the car you want, at the purchase price you want, walk away.
- If you own your current car and are just casually looking, take your time. Nothing makes a salesman happier than customers who are desperate.
4. Avoiding Talking About the Total Price of the Car
Once you decide to buy a car, you’ll move on to the financing process. The salesman will want to talk about an auto loan. At this point, the finance person will try to lure you into purchasing add-on products, such as a service contract or extended warranties. Financing should be a completely separate conversation. Simply tell them you’re already approved at your credit union. This can actually be true if you get pre-approved for financing!
The auto dealership will factor those add-ons into the price and typically present you with car buying options in three columns. This makes it harder for you to know which one is actually a good deal. They know that by giving you three choices, most people will select the middle option. Studies have shown that people think that’s the better deal. They assume the most expensive option is a rip-off, but you’re losing out of if you choose the cheapest option. They focus on the middle one. This results in the salesman getting you to buy additional products.
WHAT CAN YOU DO:
- Pay attention to the final car price! Most people will assume that if they pick the cheapest option, it doesn’t include any add-ons. But, that is rarely the case. Usually, all three prices will have add-on products included. If you don’t want any add-ons, you need to say no or request to see the price without add-ons.
- Don’t talk about the monthly payment. In order to get a great deal on a car, stick to negotiating the total price of the car, not the financing. If you tell the car salesperson your ideal monthly payment, they can usually make any vehicle fit your budget. But, that may mean taking out a car loan with a term that’s far too long. Anything longer than a 5-year car loan is putting you at risk of being upside down when you eventually sell or trade it in. Numbers aren’t magic, but salespeople make it seem that way. Have your financing set before you walk in. Then, your monthly payment isn’t up for discussion. Having your financing set takes away one of their most powerful tools – making something that’s too expensive seem affordable.
5. Using the Guilt Trip
People are generally empathetic and don’t want to be mean or cold to others. When you’re in the financing office, the salesman may try to make it seem like their income comes directly from the add-on products they sell. Meaning, they don’t get paid if you don’t buy anything extra. Trust us, if you don’t buy the car or the extras, the dealer will sell it to the next customer.
One of our team members was negotiating for new tires on a used car, and the car salesman actually said, “I can’t do those for free. We’re already losing money on this deal.” If you stop and think about that without feelings involved, why would the dealer even sell it if they were “losing money”? It was simply a dealership sales tactic and they actually lost the car sale because of it.
Guilt pulls on people’s heartstrings and can result in car buyers adding services just to help the employee. The truth is that a salesman is usually paid a salary and gets extra incentives for selling add-ons. A good car salesperson will not pressure you into anything.
WHAT CAN YOU DO:
- Walk away. If you feel pressured into anything, leave. Trust your gut. If it feels icky, it probably is.
We’re Here to Help You Avoid Tricks Used at Car Dealerships
We want to ensure your car buying experience is fun and rewarding. Knowing the tricks used at car dealerships can help you get a better deal.
Avoid talking about financing at the auto dealership. You want to concentrate on the sticker price of the car, not your loan or monthly payment. The first step to gaining the upper hand in car negotiations with a dealer is to get pre-approved for financing. With a pre-approval, you’ll be protected from overspending or buying expensive add-ons at the dealership. You’ll know how much you can spend walking in.
If you want to get pre-approved for auto financing, have us calculate a monthly payment, or have questions about buying a new car, we’re here to help. Call, text, chat, or stop in! Our team is available M-F, 9am-4pm ET.
Each individual’s financial situation is unique and readers are encouraged to contact the Credit Union when seeking financial advice on the products and services discussed. This article is for educational purposes only; the authors assume no legal responsibility for the completeness or accuracy of the contents.