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Bait And Switch: Savvy Car Shoppers Beware


2010 Chevrolet Malibu

2010 Chevrolet Malibu

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When I was Internet Manager for a major car dealer, we were careful that low-priced, advertised vehicles were always available for sale. We not only specified in our ad how many vehicles we had at the advertised price, but we listed the last six digits of the VINs to avoid any confusion. As long as an advertised vehicle is available for sale, flagrant, illegal bait and switch tactics are not being used.

However, car buyers should be aware that there is a kinder, gentler bait and switch tactic that is employed by some car dealers. It’s not fraud and therefore it is not illegal. Instead, it’s a marketing ploy that entices buyers with a remarkably low-priced, usually new car, truck, or SUV.  It’s designed to get you to call the dealership, or even better: rush down and buy the car before someone else does.

What’s the catch?

What can go wrong with trying to get the best deal on a new vehicle that you plan to buy anyway? Imagine this scenario: you arrive at the dealership and discover that the low-priced sedan you want to buy does not have the basic features you need in a new vehicle. Who wants a manual transmission in a family sedan? And there’s no air conditioning; it even has crank windows.

You can’t believe that a dealership would advertise a car that no one wants. This is disappointing because you would have saved a few thousand dollars at the price that was advertised compared to what you thought you were going to pay.

Luckily, your salesperson understands. He acknowledges your frustration and suggests another vehicle just a few feet away. This upgraded model has an automatic transmission, air conditioning, power windows, and even has a moon roof, alloy wheels, and a premium sound system. This is more like it. The salesman suggests a test drive and a few hours later you find yourself driving home in your new car.

Unfortunately, you just fell for a well-designed marketing ploy. Nothing illegal took place. What did happen was you didn’t do your homework and make sure that the low-priced advertised car had the features you need. This led to a more costly mistake, one that probably cost you a ton of money.

How to negotiate price

Savvy car shoppers negotiate the selling price, trade value, loan interest rate, and any other costs before they walk into a dealership. In order to negotiate the price of the vehicle, you need to know the Manufacturer’s Suggest Retail Price (MSRP), invoice cost, what the dealer actually paid (this is usually lower than the invoice cost), what other consumers in your geographical area are paying for the same car, and the price you should pay if you want more than a good deal.

All this information is just a few clicks away, which is why negotiating price at home on your computer is a crucial step. If you begin your vehicle search by walking into a dealership and announce, “Help, I need a car now,” you’ll end up paying hundreds, if not thousands of dollar more than necessary.

Yet, the customer in the above example was switched to a higher priced vehicle and purchased it without doing any homework on price. Do this and it’s as if you willingly put yourself at a disadvantage prior to negotiating with professional closers. It sounds crazy, but car buyers do it every day.

The bottom line

Confirm the trim line and features of any advertised deal that carries a price that seems too good to be true. This should be done before you step foot on to the dealer’s sales lot. And if, for any reason, you switch vehicles while at the dealership, get up and walk out before you try to make a deal.  This will allow you to research the price and other terms from home on your computer. Then, and only then, negotiate all costs from a distance. Do anything less, and expect to pay more.

I’ll offer more, savvy car buying strategies in upcoming articles.

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Comments (5)
  1. So...you couldn't make it in the car business,and now those who are in the bus. are employing"tactics" and "ploys", according to you, the drop out. If squirrely,lying customers were straight forward,"ploys" would never be designed. And that advertised low priced model IS for sale, it's called a base model,WITHOUT options,dolt! It's not ordered for stock inventory, because NOONE wants a stripped base model, and it would never sell if one was in inventory,moron!
     
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  2. @Mark - you can't put a correct sentence together (much less make any sense) and you call people morons... You're pathetic.
     
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  3. In truth, the system--from both the customer's perspective and the dealers, including sales people--is broken. Some dealers are great and focus on customer service. Many others are in survival mode and are forced by circumstances (to eat, pay the bills) to pull out all stops to make sales at any cost. For many customers--who only buy a handful of vehicles in a lifetime--this can be devastating and one of the most difficult events in their entire year. There is a better system; there is a better way of doing things. More in future articles. In the meantime, education, information, and transparency seem in order for everyone. Good luck.
     
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  4. I agree with James. The system is broken. I don't understand why the consumer has the nerve to ask what the cost of a new car is. Whatever you do for a living, you earn your money. Would it be fair if your customers asked to pay you little or no profit for product or services? How about less than what you own it for or the cost to provide the service. Would you work for free, or better yet have it cost you money to work? I don't think so. The manufactures spend a lot of time and effort producing a Manufacture's Suggested Retail Price. It has a profit built into it to cover the car's costs, and a reasonable profit for the dealer. All things considered it produces a chain of economics that make our system continue to move forward. As for shopping from home, from your computer I again agree with James to educate and inform yourselves. Then find a dealership that provides a transparent, full discloser sales process and drive the different cars you are considering. Who knows, you might find the process and experience worth while and that the leasing and sales consultant deserves being paid a professional wage just like any other profession.
     
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  5. I have used James' technique for my last 4 family vehicles, and it turns the table on the dealer or at least levels it. You negotiate from a distance after confirming what you are (fairly new or new, loaded) getting and what you're not getting (damaged car). It can actually be kind of fun, too. When you feel you are ready, then and only then do you call the person you have been negotiating with.
     
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