Main Dealership Scams and How To Avoid Them
When you look for balloon auto financing, chances are you either have dealt with a dealership recently or soon will. Be sure not to be taken advantage of by reading up on the top dealership scams.
“Your credit disqualifies you for the best rates.” Dealers will do their best almost always to make your credit appear worse than it really is. They do this so they can amaze you into higher interest rates on financing. This is part of the reason why you would be better off securing third-party financing, such as balloon auto financing.
Accumulating all transactions into one. Dealers love nothing more than to negotiate all three components of a car-buying transaction (financing, trade-in value, and the new vehicle price) at once. Lumping everything into one allows them to bring to notice one low number in front of you while disguising the fact that they are simultaneously inflating (or deflating, in the case of trade-in value) the other numbers. You may either negotiate each of these transactions separately or get balloon auto financing from a more trustworthy third party.
The MSRP myth. You will always only see the MSRP of the car on the vehicle window. This number is basically meaningless because it is nothing more than an inflated suggestion. What you should mostly pay attention to is the invoice price, or what the dealer paid for the car. Find out this number and work your way up.
The 0% financing illusion
You will sometimes have the option of 0% financing or a cash rebate. Always choose the cash rebate. The hidden costs of 0% financing are significant because the dealer has to compensate for the profit lost in the financing deal. Often, 0% financing means you have