As Car Buyers Get Smarter Some Dealerships Are Getting Dumber

"Tom McParland" (tommcparland) 01/28/2014 at 10:00 • Filed to: Stealerships, car buying, ad watch, automatch consulting, articles

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Lease a brand new Civic for only 99/mo!....Guaranteed minimum 6 grand for your trade, no matter what condition it is in!.....No credit, no problem we will get you approved today! What do all these phrases have in common? One thing, to get you into the dealership so they can tell you something along the lines of, "Well yeah that is what we advertise but it doesn't apply to you."

Deceptive or false advertising is nothing new in the automotive world, but for some reason it has lasted longer than in other industries. Turn on the television, listen to the radio, or open up a newspaper, I guarantee you will find a dealership making promises they have no intention of keeping.

Let's look at a few shall we…

This is a flyer from a local Honda dealer came in the mail the other night-

New '13 Honda LX Sedan for only….$99/mo! Hey that sounds like a pretty good deal, that is until you read the fine print which states- " On select models with approved credit...to well qualified lessees with approved credit...159/mo for 36 months $19999 due at signing...all prices exclude sales tax, title and tag fees…pictures for illustration purposes only."

Now wait a minute, I thought the lease was for $99/mo but then it says $159/mo so which is it?...And the vehicle pictured for "illustration purposes" is a 23k Civic Si not an LX model with an MSRP of $18,390.

Here is another-

6 grand over KBB for your trade or 6 grand off dealer advertised price! Wow 6 grand off! That is a lot of savings...wait a minute..." $6,000 off, over or back off the dealer posted price, dealer to retain all rebates, including recent college grad and military. On new Hyundai vehicles only.Not available on leases.Can not be combined with any other offer.off, over or back if you qualify for the recent college grad $900, active military $500, and $500 Hyundai owner loyalty! Loyalty and or conquest rebates can no longer be applied towards a lease.This promotion is not valid on 2013/2014 Hyundai Tucson, Veloster, Accent, Azera, please contact us for more details. Clean CarFax required on trade in. Deal extension is good until new incentives arrive or 1/31/14. Not valid on prior deals."

So in order to qualify: I have to have a trade, be a recent college grad, active military, AND a Hyundai owner!..And the reason I'm getting the 6 grand off is the dealership gets to keep those rebates. What the…?

These types of ads end up making the customer feel deceived and taken for a ride. More and more customers want to avoid the typical dealership experience. While there are numerous dealers that have gotten wise and don't play these games, there are far too many stuck in old ways. As I buyer's consultant I have found direct correlation to how a dealer advertises and whether or not they will cooperate with an inquiry from me. When I contact dealerships like the ones above asking for competitive price quotes via email, they are reluctant to give me what I want. I suspect that they know I will call them out on any inconsistencies with their offers and they would rather not bother when there are plenty of suckers rolling into the showroom daily.

But here is the thing, the number of "suckers" is quickly declining. There always be "uninformed" buyers, but the internet has become the great equalizer and tolerance for these type of practices is getting less and less. !!!error: Indecipherable SUB-paragraph formatting!!! I have found that while many dealerships are guilty on some level, it seems that Hyundai and Kia dealers are especially notorious. !!!error: Indecipherable SUB-paragraph formatting!!! This is perhaps why Hyndai's Equus concierge program by-passes the dealers directly.

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Of course as informed car buyers we all know to ignore these "teaser" offers, and shop smart. However, these advertisements are often a clue as to a !!!error: Indecipherable SUB-paragraph formatting!!! Does it mean that you can't get a great deal at places like these? No, I'm sure there are deals to be had. But in my experience getting that deal at these places as a seasoned car buyer is going to take some work; keep in mind whatever bargain one dealer can give someone else can too, maybe even without the games.

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Thanks for reading!

My name is Tom and I run !!!error: Indecipherable SUB-paragraph formatting!!! I am a professional car-buying consultant, which means people pay me to help them select the right car (NO YOU CAN'T HAVE A PRIUS) and negotiate with the dealerships to get them the best price. If you have any other questions or suggestions for future posts about the car-buying process please let me know. You can find some of my other posts on car-buying !!!error: Indecipherable SUB-paragraph formatting!!!

You can also find me !!!error: Indecipherable SUB-paragraph formatting!!! and !!!error: Indecipherable SUB-paragraph formatting!!!

Nibbles > Tom McParland 01/28/2014 at 10:05

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"ALL CREDIT APPS ACCEPTED"

I love that line. Note that they say "accepted". All that means is that they'll take your credit application; nothing about whether or not credit will be granted. People fall for that one all the time

Tom McParland > Nibbles 01/28/2014 at 10:06

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We will take any trade! Yeah you will take any trade...doesn't mean you will give me a decent price for it.

Jagvar > Tom McParland 01/28/2014 at 10:15

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Yeah, when my dad traded in his '89 Taurus in 2000, I think he got $200 for it. The Lexus dealership promptly scrapped it, I'm sure.

505Turbeaux > Tom McParland 01/28/2014 at 10:19

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The hardest thing to advertise in the auto world is a lease price. Of course you would rather advertise at $99/mo vs $159. F and I guys have been running bait and switch tactics at the credit desk for so long I am not sure they know how not to take money out of your trade to pay for X, then retain a rebate to cover Y, and then figure out what the manufacturer to dealer incentive is to take care of Z which is whatever else they advertised to you. And this is how dealers validate the drivel they pump into your local paper/radio/TV station. In my humble but educated opinion they should advertise cash prices, backing it up with a VIN and stock number. If they want to take a hit on a few cars so they can advertise a stupid low price, it is valid, almost like a Black Friday deal. Someone is going to get that deal, even if you have to wake your sorry ass up at 4am to get a smokin deal on that new TV. Or advertise a great interest rate. If you have crappy credit of course you aren't going to get 0.9 APR and it is easy to disclaimer for. It is really no wonder why dealers get a bad rep. My firm has so many clients we have had for 20+ years I think they would be embarrassed to give us a deal like this to work with.

pdx107 > Tom McParland 01/28/2014 at 10:25

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This makes me so glad I didn't get bent over when I bought my Dart last weekend. Paying cash helped as well

505Turbeaux > pdx107 01/28/2014 at 10:34

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paying cash is always the way to get past this

pdx107 > 505Turbeaux 01/28/2014 at 10:37

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Thats kinda what I was thinking. That and being eligible for employee pricing....

drock87 > Tom McParland 01/28/2014 at 10:37

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I've been in the car business for ten years, and I hate this shit. First, that Civic ad is illegal or a misprint. You can't advertise a payment with ANOTHER payment in the disclosure. Down payments are fine if the disclosure is accurate and readable. Mercedes leases on TV from the damned factory require like $6000 due at signing. Actually, MB USA are a bunch of idiots. But that's neither here nor there. Yes, there are a lot of dealers that still do this shit, and it's stupid. People know better. And, Kia and Hyundai dealers are just going to kick themselves in the ass for this fuckery. They build cars now for people with credit scores higher than 430. Which means ones that normal people will actually make a conscious decision to want and buy without this trickery. Shame on dealers for continuing to unconsciously ruin their reputations with stupid bullshit targeting credit criminals. The biggest thing holding Hyundai and Kia dealers back? Some still think of their cars as those of whom are "bust outs". That is strictly dealers' faults.

Storz > Tom McParland 01/28/2014 at 10:42

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Awesome article!

Tekamul > Jagvar 01/28/2014 at 10:44

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A friend had the same issue with a Hyundai Accent. Granted, it was a terrible car, but it started, drove and was inspected, and he took $200 in trade. I told him he was an idiot. That was 2006.

Nibbles > Tom McParland 01/28/2014 at 10:48

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Also, another reason why I loathe the dealer infrastructure here. If only there was a way to purchase direct from the manufacturer

Shit, guess I'm buying a Tesla

Tom McParland > 505Turbeaux 01/28/2014 at 10:58

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Leases aren't that hard, just run the special the manufacturer is having, with the same fine print. Now if your competitor is running this BS, they are going to steal leads but when customers get pissed about the bait and switch you can snatch them up.

jariten1781 > Tom McParland 01/28/2014 at 11:04

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I bought my FiST at one of these joints. All of their advertised prices included military, college, loyalty, and Ford financing discounts plus manufacturer incentives. Hilariously half the vehicles on the lot didn't qualify for the finance discount or incentives yet they were still advertised as if they did.

I ended up getting an acceptable deal, but it was definitely the 'old school' dealer experience with numbers changing depending on which desk I was at, four square, incredibly low ball trade in offer, etc. I can totally see how this would sour most folks (and it would have me as well if I hadn't worked for a dealer when this was standard practice). The last 3 cars I bought prior to this were much easier and more open transactions.

505Turbeaux > Tom McParland 01/28/2014 at 11:06

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yeah if it is a manufacturer lease special, no problem, cut and paste it. It is totally you against the competition and having the slightly better deal. In a perfect world a manufacturer would set the deal, and you would rest on your laurels as a great dealer to work with to get people in the doors

Nibbles > Jagvar 01/28/2014 at 11:13

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I don't know if the practice still exists today, but back when I was selling cars in the early-oughts we would take those "cash cars" and leave 'em in the back of the lot. That way, when someone came in with some cash for a down payment but weren't creditworthy, we could sell 'em one of those heaps.

My favorite was a 1985 Chrysler New Yorker Fifth Avenue. Sold it to a kid in 2002 for 1200 bucks. We took it on trade for $50.

erikgrad > pdx107 01/28/2014 at 11:23

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Paying cash helps get your bottom line cleared up, but when I go into a dealership, I always tell them, first thing, I want the numbers "out the door". I don't want to discuss what type of payment I'm looking for. Buying a car cash can potentially have drawbacks. My parents made the mistake of buying a new car with cash on a stormy day from The Suburban Collection dealership family in Metro Detroit (thought I'd throw in a plug for them) only to discover it had exterior damage masked, once they saw it in good sunlight the next morning. If they had financed it, I felt they might have a bit more leverage in trying to get a different new vehicle, since the finance company would have had a stake in the vehicle condition....particularly when they realized my parents could walk away, let the finance company have the damaged car back. Maybe I'm wrong about that. The dealership management was unwilling to replace the not new car with a different new car, they settled on repairs. One of these days I'm going to write about that whole fiasco as an Oppo post.

Forgetful > Tom McParland 01/28/2014 at 11:24

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I tried sales for a Ford dealer in Alberta for less than a year. This is the kind of shit that turned me off. That and the time the manager gave a 'fiery motivational speech' that was just a bunch of yelling about how sales were down and how the dealership spent so much money on advertising and inventory so it had to be our fault. I couldn't help thinking that they just had a shitty selection in a competitive market.

Got to sit next to a Ford GT the whole time tho. Small win.

pdx107 > erikgrad 01/28/2014 at 11:27

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True, you do make a good point.

I got mine new, 14 miles, held it at the dealer the weekend before last and picked it up last weekend, thankfully had no issues, and with the warranty in place I feel I am doing alright.

Also, getting close to $6k off MSRP between the Employee price and the various discounts, I think I got a decent deal.

erikgrad > pdx107 01/28/2014 at 11:51

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Close to $6k off MSRP? Damn fine deal, I'd say.

pdx107 > erikgrad 01/28/2014 at 11:56

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Thank you. Was the 2013 Dart Rallye, with the touch screen and all that jazz, for $16.4k instead of pushing 22k.

The employee pricing shaved about 2k off the top

erikgrad > pdx107 01/28/2014 at 12:23

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Is it the 1.4 turbo or the Tigershark?

pdx107 > erikgrad 01/28/2014 at 12:50

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Tigershark 2.0 Auto
has pretty much all of the options except the digital dash and the sunroof.

For Sweden > Tom McParland 01/28/2014 at 17:47

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What's your opinion of sales that advertise a $500 or $1000 guaranteed trade?

Tom McParland > For Sweden 01/28/2014 at 17:50

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That means they have at least a $500 or $1000 mark up on whatever they are selling.

John Bulzacchelli > Tom McParland 01/28/2014 at 17:57

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I looked into leasing a Mitsubishi Evo X last year - MitsuUSA had a offer running that was something like "3200 down, $250/month". In one of the oddest dealership experiences of my life I had ARGUE with the sales guy to talk to me about the lease deal (?) and look at my trade in. My credit was more than good enough, and I came prepared with value estimated from NADA, Blue Book, Black Book, Edmonds, and a few other sources.

My trade in was pristine realistically worth 4k (I even used the "average" condition column from my sources!), I figured I would ask 5 and go down from there.

He offered me $1,100 and wouldn't budge, so I told him I was done and got up. He then countered with "What do I have to do to get you to sign NOW!" lol.

We haggled a little and he offered $1,300, and with me ready to put down the remaining balance to make a $250 a month payment, he then started piling on extra fees that bought the payments north of $325.

That was when I walked away.

Fuck dealerships.

John Bulzacchelli > John Bulzacchelli 01/28/2014 at 17:59

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Because Kinja won't let me edit: I checked Mitsu USA's website when I got home - it said that all fees are included except title fee which was 88 dollars if I remember correctly.

So pretty much, what I saw was either illegal or just extremely selfish.

silverturbobrick > Nibbles 02/19/2014 at 13:50

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"We finance everyone!" Yeah. Even the guy with a 400 beacon score. Sure thing you'll finance him, with 90% down payment.