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TOP 10 DEALER SCAMS TO AVOID
Table of Contents
Chapter 1. The 3 Main Ways Car Dealers Can Rip You Off
Chapter 2. Dealer Trick: The 4 Square Method
Chapter 3. The Bait and Switch Scam
Chapter 4. Why Special Sales Events Are Usually Ripoffs
Chapter 5. Dealer Advertising to Watch Out For
Chapter 6. Outrageous Dealer Scam: Switching Paperwork
Chapter 7. Car Rebate Scams and How to Avoid Them
Chapter 8. Beware of "Dealer Stickers"
Chapter 9. How to Spot a Fake Window Sticker
Chapter 10. Why Women and Minorities Need to be Careful
The 3 Main Ways Car Dealers Can Rip You Off
Believe it or not, 8 out of 10 consumers don't know how to buy a car without
Getting a good deal is not rocket science, but it does take research to
figure out how to do it right. Most people are
either lazy or uninformed and aren't willing to
invest their time, even though they can save
upwards of $5,000 on a typical deal.
Dealers sell vehicles every single day. They
know every type of customer, all their
objections, and tactics to pressure and profit
A typical car buyer only buys a car once every 5 to 6 years. There's no way
they're going to outsmart a dealer without being fully prepared.
But the statistics show that 80% of car shoppers try to negotiate at the
dealership instead of doing everything via phone or email. They also
finance their cars through the dealership and tradein their old car without
thoroughly shopping it to other dealers.
Of course, dealers love it because those are the 3 main ways they make
money off of clueless shoppers.
1. The Price of the Vehicle
2. The Financing
3. The TradeIn
Most car shoppers focus only on negotiating the price of the car. That's fine
with dealers, because they can easily give you a good price while
completely ripping you off on the financing and tradein.
If you focus instead on your tradein, that's fine too. The dealer will simply
raise the price of the car and screw you on the financing.
The main point is that dealers will juggle these 3 profit sources so that you
get a good deal on whatever you're focusing on, while being ripped off on
the other two.
Always make sure you separate each transaction into its own negotiation.
Don't let the dealer package everything into one monthly payment.
Dealer Trick: The 4 Square Method
Negotiating the price of a car at a dealership is a sucker's game.
Smart car buyers know never to set foot in a dealership when it comes time
to haggle it's way more effective to do all your negotiation via phone and
What we're going to reveal in this article is the most common negotiation
technique dealers use to sucker car buyers out of their hardearned money.
It's called the 4 Square Method.
The good news is that you will never have to encounter this sleazy
technique as long as you follow our car buying method, but it's always
interesting to see how slimy dealerships can be when ripping off
customers. (Note that not all dealerships use this technique)
How the 4 Square Method Works
The 4Square method is a negotiation technique that is designed to
confuse car buyers by mixing the price of the car, down payment, tradein
value, and monthly payment into one sheet of paper as seen below.
By mixing these all together, the salesman can easily move around the
numbers to make it seem like you're getting a good deal when in fact,
you're getting ripped off.
Most clueless car shoppers focus on the monthly payment which is exactly
what they want since it's the easiest to manipulate.
The salesman knows if they can get you to focus on one square of the
worksheet, they can rip you off on the other 3 squares.
Check out how confusing the worksheet looks after going backandforth
through each square.
How to Avoid the 4 Square Method
Avoiding this sales technique is easy if you follow our advice. First, you
should always negotiate each part of the transaction separately.
This means you keep the negotiation of the car price separate from the
tradein, financing, and any other addons such as extended warranty
It's important that you arrange your own financing before negotiating the
price of the car.
Dealers love to mix the financing with car price negotiation because they
can have you focus on monthly payments instead of the price of the car.
The ironic part about negotiating the price of a car the smart way is that it's
so easy. It not only saves you a ton of time and hassle, but you will save
thousands of dollars in the process.
The Bait and Switch Scam
One of the oldest dealer tricks in the book is the "bait and switch"
It's pretty simple: A dealer advertises a very low price on a particular car,
but once you arrive at the dealership, they tell you it has already been sold
or they try to convince you to buy a different car at a higher price.
The whole point is to get you to come to the dealership where they can
take advantage of highpressure sales techniques.
This is all legal as long as the dealer actually had the car available and sold
it at the advertised price.
The problem is that it's rare to actually be the one to get the deal, and even
if you do, it's probably a car you don't want anyway.
Read the Fine Print
Dealers that use the "bait and switch" technique will almost always
advertise a barebones model that is very cheap to begin with.
This may be a car with a manual transmission, no power windows or doors,
and sometimes even no air conditioning!
It's rarely a car anyone would want to buy in the first place.
They will also require ridiculous terms such as a huge down payment or
financing for 72 months, but these terms will be printed in tiny fonts that