Tricks to watch out for when shopping for a car

We know. Not all car dealers are unscrupulous, and not all are going to take you to the cleaners.

Among all the “Honest Bobs” out there walking the lots, many really are trustworthy.

But there is a simple reason so many people dread buying a new car: the potential for rip-off is astronomical, and common practices over the years have often justified consumers’ fears.

If you catch a whiff of any of the scams below, be on the alert.

Juggling the Four-Square: This isn’t really a trick, but awareness here is important for a buyer.

When you sit down to negotiate, the salesman will pull out a “four-square” worksheet on which to work out the terms of the deal.

In the four quadrants of the sheet the salesman will record purchase price, down payment, monthly payments, and trade-in value.

He will fill in the sheet as you talk, working the deal like a shell game—if he thinks you are preoccupied with getting a fair deal on your trade in, he might give you a good price for that and then nudge your new-car purchase price north.

Take it slow, focus on one item at a time, and be sure you are comfortable with each individual aspect of your purchase.

Profiting from rebates: Rebates bring a lot of customers into a showroom, but the discounts can hide several tricks dealers employ to suck a few bucks from a buyer.

First, don’t let a salesman tell you that you are getting a good deal because of a rebate; rebates come from the manufacturer and usually apply regardless of the price you negotiate with the individual dealer.

Negotiate as if there are no rebates. Second, make sure the rebates are deducted from the purchase price.

If you allow the dealer to mail you a check after the sale, you end up paying taxes and interest on the rebate. If there’s an incentive on a car today, odds are there will be incentives on it again.

Inflating payments: Talking monthly payments at the car dealership can be as dangerous as saying “bomb” at the airport. A salesman asks how much you are willing to pay each month, and you throw out a number.

He asks how much more you could afford—just getting a feel for you. You tack on another 50 bucks.

In your mind, you were just theorizing, but to the salesman, you just committed to a certain minimum monthly payment.

Instead, when a salesman asks how much you can pay each month, tell him you will not discuss monthly payments and only want to talk purchase price; you’ll decide on monthly payments after you’ve settled on a fair price.

Fees and extras: Delivery charges, titling fees, and a few other closing costs are inevitable extras associated with buying a new car.

But aside from a few essential add-ons, most fees or extra-cost items are either inflated or altogether unnecessary.

Negotiate fees down, or outright refuse to pay them. And deny any extras offered by the finance and insurance manager.

Basically, if it’s anything he offers you after you’ve negotiated your sales price, you don’t need it and you shouldn’t pay for it.

Particularly egregious are paint protection and fabric guard, essentially wax and Scotch Guard dealerships often charge hundreds of dollars for.

Interest-rate bumping: You should always shop for your own financing before you head to the dealer. Maybe you’ll get a better rate; maybe you’ll just get a better idea of what rate you qualify for so you can police the finance manager.

It is not uncommon for the dealer to secure financing for you but offer you a rate one percentage point higher—and then pocket the difference.

Altering the bill of sale: Never sign a bill of sale with blanks or terms that are “subject to bank approval” or have similar wording.

Some dealerships will let a customer sign such a document and release the new car to its happy owner, only to call the buyer back a few days later to say that the loan fell through and they need to come back in to sign some new paperwork, which just happens to cost the buyer more than the negotiated price.

Never drive your car off a lot until all the paperwork is filled out completely.

Car and Driver.com