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How To Interpret a Car Salesman’s Lies


Shopping for a new vehicle can be an intimidating task. The claustrophobia-inducing office, the ruthless salesperson, and the proliferation of numbers crowding the page can all turn what should be an enjoyable experience into something out of a nightmare. But it does not have to be that way; if you know what to expect, you can be prepared. Here are a few things to watch out for to ensure you have a better shopping experience and end up with the best price.

The case of the disappearing down payment. The method most dealerships use to negotiate a car deal involves showing you your trade value first, then giving you a payment based on using your trade-in and an additional down payment, usually 10-25%. The payment will be over a short term and look very high despite the trade and down payment. The dealership’s goal is to have you make an offer based on the payment and your trade in, but with no money down. The truth is, they probably did not use the down payment when they calculated the payment. In other words, if you took the deal they offered, the entire down payment you give would be profit to them. The solution? Take a calculator with you. Some quick math will tell you if they have included the down payment or not. Car salesman hate calculators.

What’s my interest rate? Some of the most enticing incentives offered by car companies are based on low, or sometimes non-existent interest rates. These are typically good deals as most of them do not have any additional charges for using the sub-vented rate. But did you really get the advertised rate? Often, the person quoting you the payment will use a higher rate, giving themselves a pad for negotiating. Every dollar added to your payment by a higher interest rate becomes profit to the dealership. The solution? Remember the calculator you brought to check on that down payment? Make sure it has a function for calculating interest.

That payment fits my budget. Shopping for a new car tends to be an emotional experience. Once you, as the customer, have gotten to the place where you want the vehicle, the dealership has you right where they want you. Typically, most people will simply agree to a payment at this point because it fits their budget. The problem here is that you have probably told your car salesman what that payment is. All they have to do now is come close to that payment and you will sign on the dotted line so you can drive your new car home…even if what they showed you is not the actual payment based on the interest rate, trade value, down payment and term. Again, dealerships will often add extra dollars to the payment to give themselves a negotiating pad and, like boosting the interest rate, every dollar over the actual payment becomes profit to the dealership and money you did not need to spend. The solution? Pull out that calculator again and make sure the numbers make sense. The salesman might not like it, but that calculator is your best friend.

Car manufacturers and dealerships are businesses and, as such, they deserve to make some profit. Car salesmen are people with families and expenses just like everyone else and deserve to make a reasonable income, but none of them deserve to make more than they should. Armed with some good research, a calculator and a detached point of view, you can ensure you get the car you want at a price that is fair to everybody, but most of all, to you.

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