Questions That May Indicate Upcoming Dealer Fraud (1)
Car dealers usually ask key questions for diverting your attention and maximizing their profit. Knowing these questions and refusing to take the bait will help you stay in control of the negotiations and get the best deal. Below are some of these tricky questions and the best ways of answering them and thus avoiding various types of dealer fraud.
1. “What kind of monthly payment are you looking for?”
In some cases, this question doesn’t presuppose any upcoming vehicle scam. If you’re looking to buy a $50,000 car on a budget of $300 per month with a $1,000 down payment and no trade-in, the dealer will know right away that you’re wasting his time. In any case, it much better to negotiate based on the cash price of the car and not the monthly payment.
Before negotiating on any car, do a little math: Start with the sticker price of the car, add in 15% for taxes and finance charges, subtract your down payment, and divide by 36, 48 and 60 to get a rough idea of monthly payments. Also don’t forget that your vehicle insurance premiums may go up as well. Can you really afford this car? If you can’t, you might want to respond by asking what a lease payment would be like. (Leases offer lower payments, but may also have mileage limits and require you to give up the car at the end of the term.)
So the most proper answer in this case is: “Let’s negotiate a cash price, and then we can figure out what the monthly payments will be.”
2. “Are you going to trade in your old car?”
Many people rely on the cost of their trade-in to offset the price of the new car – but negotiating with a trade-in just complicates matters and gives the unscrupulous dealer yet another set of numbers to manipulate. Remember, the value of your old car isn’t going to change in the time it takes you to hammer out a deal. If you intend to use your trade-in as a down payment, you should have an idea of what it’s worth. Still, it’s important to take one thing at a time – and the first thing is to negotiate the price of the new car.
Your answer to this question should be something like: “I haven’t decided yet. Let’s figure out the price of the new car first.”
Be careful with the above questions to be able to avoid dealer fraud.