This scam happens when the dealer adds unnecessary fees to make as much profit as possible. This fee can be seen on the orange sticker marked on the manufacturer’s suggested retail price (MSRP). There is no real reason for requiring more money for the additional dealer markup. What the dealership does is including all kinds of extra fees in the additional dealer markup.
Avoid this scam
The best way to avoid the markup scam is to simply ask the dealer to get rid of it whenever you see an extra dealer mark up fee. If they refuse than just walk away and shop somewhere else. Remember that if you do pay the extra dealer markup, you are overpaying for no real reason.
The biggest scam is the lawyers whom write articles like this that makes all car dealers look like crooks, when in fact its the sleazy scam lawyers that want to make you feel like every car deal is being done by shysters so you will hire them the minute you feel bad about the car and want to breach your commitment. layers feel like its your right to change your mind and its never your fault… The most unscrupulous group of people are lawyers. I work as a car salesman right out of high school for several car dealers. the one I ended up staying at for nearly 4 years was a great dealer whom I purchased many cars from since I have been successful as a MFG dealer. Sales makes the world go around in fact most of your jobs if not all are supported though a sale somewhere. And if you think about it … Well most of you wouldn’t be here if a sale. take a look at both of your parents chances are one of them had some sales abilities:)
I appreciate your comment. The fact is I never deny the reality that there are many honest sale people other there. I have many friends in the automotive sales industry who are honest and righteous individuals. The list of those people grows daily as I come across cases where the dealership made a honest mistake and once we contact them they realize and admit the mistake and do everything in their power to correct the mistake and help our clients out. But you know what other list keeps growing? The list of cheating, lying, defrauding and unscrupulous car sales people. Everyday I get countless phone calls from people whose hard earned money got swindled by some sleazy salesperson. And yes you are right – my practice is benefiting due to the fact that there is so much fraud going on in the auto sales industry. You remind me of one instance (and I’ll even give you specifics) I had a fraud case against Claremont Ford & Mazda and I got into a heated argument with one of the sales managers (Chuck Erwin was his name if I recall correctly) where I confronted him and told him that they had basically defrauded my client out of about $11,000 on a single car deal. Do you know what his reply was? He told me “First of all so what if we did cheat? The fact is we are closing down the store so you cannot do anything about this. Also, you lawyers are the worst, so what if we made that much money on that car deal? Just because we made that money now you get to come after us and take it all away from us?” – and my answer was “YES! ABSOLUTELY YES! But not because you made that money but because you made that money by committing FRAUD!” Your see FRAUD is what makes it wrong. There are a lot of salesman out there who wheal and deal and make tons of money in the industry – I say more power to them if they can do so with a clear conscience. But if there is fraud involved then they better hope a consumer protection attorney such as myself does not find out about it. Again, I am not against sale, I am only against fraud and cheating. I have friends who make $20,000 a month by selling cars – but they do so by being good at what they do and by selling 100 cars a month! Not by defrauding 1-2 unsuspecting clients. If you are an honest car salesman then I applaud you and hope there are many more like you. The fact is – if there was no dealer fraud I would not succeed in any of my cases and I would not have a legal practice focused on dealer fraud. The very existence of my law practice and the numerous clients we represent is a testament of the sad reality of all the fraud that occurs in the automotive sales industry. Unfortunately many sales people look at fraud as a way of doing business – if they commit fraud ten times a month and get caught only once then it is an absolutely lucrative and efficient way for them to increase their profit margins.
Never, ever pay additional dealer markup. In California, there are many dealers who put the ADM stickers on all new cars in inventory. It’s just a negotiating ploy to say, I can get it for you at the MSRP. Also, if they change the contract from the negotiated deal, rip it up and sprinkle the pieces over the sales persons head and walk out.
True. True. ADM and MSRP amounts are all arbitrary. You need to find the true market price of the specific vehicle of your choice and negotiate from there. Sites like http://www.carsdirect.com are a great resource for doing your preliminary research before you even visit any dealership.