How to avoid paying too much for a vehicle

PHOENIX (3TV/CBS 5) – Buying a new or used car is a major purchase, often costing tens of thousands of dollars. Navigating the sales process can be complicated and frustrating. New rules proposed by the Federal Trade Commission could help consumers, but until then, the experts at Consumer Reports have some tips on how to avoid some common car-buying mistakes.

The FTC received more than 100,000 complaints in each of the last three years about suspicious dealer practices. Now the agency is trying to put some protections in place to prevent the practices from affecting other consumers. What are some of the practices the FTC would ban? An example would be not disclosing the full price of a car to any consumer who requests it.

Until the protections are in place, Consumer Reports advises prospective car buyers to try to get as much information as possible in writing from the dealer. Ask for a detailed price, outside the door. That price should include add-ons that have already been installed on that car, especially if the dealer says it’s the last one in stock. Under the new rules, you wouldn’t have to pay for those extras, but in the meantime, you’ll want to negotiate to remove them.

Did you know that half of a dealer’s profits (about $1,200 for new cars and about a third of profits, or $900, for used vehicles) come from additional financing, leasing, and service fees? At the end of the whole process, check the paperwork and check the math. If there is something extra you want to buy, negotiate the price. Don’t be fooled by unnecessary extras like nitrogen-filled tires.

Consumer Reports has seen charges as high as $495, despite one company saying dealers should only charge $8 to $12 for a fill. CR suggests skipping the nitrogen altogether, no matter the price. What happens when you arrive to pick up your car, they tell you that there was some kind of error?

“The car was just sold to someone else and the only one left is more expensive” may be something you’ve heard before. It’s classic bait and switch. In some states it is illegal and, at the very least, it is an unfair business practice. That is the perfect time to recognize it as a signal to walk away.

Not surprisingly, auto dealer associations are not too happy with the proposed rules, saying they are complicated and could negatively affect their business. But if you feel like a dealer has wronged you, Consumer Reports says to complain. Report it to the FTC, which already has the power to initiate enforcement actions for deceptive practices, and share your experience.

Leave a Comment