Is this a common car salesman's scam?

I haven’t purchased all that many new vehicles in my life, but in the process of acquiring the last two, a similar thing happened that makes me wonder if its some kind of scam I don’t understand, or just a simple coincidence.

On both ocassions, the salesman (two different dealers/make of vehicle) made some sort of error during the price negotiation phase.

In the first instance, the value of my trade-in was misquoted. After evaluating my little piece of crap Nissan pickup truck, the salesman said "okay, I can give you 13,000 (usd) for it". Which got me thinking "Gee, that's quite a bit more than I expected...hell, that's more than I originally paid for it!". So I started adding options to the new vehicle. Options I hadn't initially planned to purchase, but hey, now I've got more to play with. Then it happened…“Oops, I made a mistake. I thought that was a Pathfinder. Sorry, I can only give you $6,000 for it.”

With the most recent purchase it had to do with the monthly payments. I told him what I could afford, he ‘spoke with the finance guy’ and came back with a figure that was about $50 more per month than I wanted to pay. So I offered another $1000 down. After speaking with the finance guy again, he said “Oops, I made a mistake. I was looking at the 5 year loan instead of the 4, and now with your additional $1000, the payment will be that x+$50 I mentioned earlier.”

So, is this “Oops, I made a mistake” thing a common scam?

(BTW - I walked on both deals)

Car salesmen really don’t make mistakes like these very often. Smells badly likes scams.

Also, never tell a car salesman what you can afford, max. monthly or anything like that. Go to the dealership knowing all this but don’t tell them. You should also figure out ball park payments for a given loan amount ahead of time.

The more knowledge you have, the better you will do.

You were wise to walk out on both deals. Both cases sound like outright fraud to me. My own sample is too small to say but I hope it isn’t widespread because a lot of buyers would be pressured into falling for the deal. That’s why I arrange my own financing through my credit union before shopping for a vehicle. I don’t have to listen to BS payment estimates ot get jerked around. Take a financial calculator with you so you can calculate payments at a given APR. A scam artists will hate you for it an honest dealer shouldn’t care. You did the best thing possible, you walked out without hesitation when it didn’t smell right. Good for you.

FWIW I was a car salesman for about a year a long time ago. I was not pleased with what I was doing but I was never dishonest, certainly not like this.

Isn’t it common knowledge that “going to talk to the finance guy” is a lie? They are sitting in the back room for a few minutes. Gives the customer time to get scared of losing the deal (etc.)

Yes, they are. And, there are other scams like forgetting to add in an option you aksed for, or adding an option you didn’t want- or just the plain old simple “math error”. However, in the first case, it could have been just a mistake.

FTG is right- they LOOOOOVE “monthly payment buyers”, those who tell them how much they want to pay per month- they have so many ways of scamming you that way. The worst is the old “balloon payment”- which is illegal in some States. I would say it is 99% likely that in the second case you WERE being scammed. There are books on this- read one. <— all sorts of scams listed for ya.

4 items car dealers use to confuse the buyer:
trade in value
something else - maybe price.

THe dealer will jump back and forth in order to make you loose track of what want.

Also when you quote a figure that is your max, the (some) dealers take it as: (example)

you said $x is your max
Dealer says ok what price range are we talking about, $x to ?
you say well maybe $50 over $x.

Dealer said $x to $x+$50, but no more then ?
you say $100 over X

Dealer now has you $100 over the amount you are willing to pay in a way that you agreed.

That was an example I saw on 20/20 or some such show.

The suggestion was to eliminate as many variables from the dealer as possible, don’t discuss trade in - try to sell independantly, try to finance outside the dealer and deal with cash, and don’t let him know how much you are willing to spend unless you absoultly know what you are doing.

To follow up on bbeaty’s observation: be suspicious whenever the salesman has to go talk to someone at a crucial moment in negotiations.

Another common stunt is for the salesman to stick his neck out to get you the best possible deal only to come back, disappointed, and tell you that his supervisor or “the finance guy” wouldn’t go for it. Arthur Hailey detailed this in his novel Wheels.

Some years ago I was undecided about whether to get a Saturn or another car which cost roughly the same. I say “roughly” because, unlike a Saturn, it didn’t have a set price. So I showed the salesman the memo the Saturn salesman had written up for me the night before, listing the options I wanted and the price the car would cost me. I told him that if he came close enough to it I would buy his car instead. He stepped outside to see “the finance guy”.

“Here it comes”, I thought; he’s going to say he almost got his supervisor to match the price of the Saturn. Nope: I was wrong. Instead he told me that his supervisor had laughed when he told her somebody was actually considering buying a Saturn.

On the way out of the lobby I turned and told him that I wanted to thank him as he had made my decision a lot easier. Other salesmen heard me. I felt good about that.

I’d recommend you read Confessions of a Car Salesman from

It’s the story of a reporter who worked as a car salesman for several months at two dealers, including one that tried many of the scams you describe.

Why the heck would anyone want an auto loan from a dealer, who is likely to scam the heck out of you?

Just a note -

I actually paid cash (well, it was a check but I didn’t get financing) for the first time in my life last year. Believe it or not, I had a much harder time purchasing that car than any others I had in the past when I financed through the dealer.

When my wife and I were shopping around, the first thing the salesperson would ask was “how much can you afford a month?”

Whenever I would just ask “how much is this vehicle?” It seemed they just could not figure it out. They seemed dumbfounded. They couldn’t comprehend that I wanted to pay in full.

Anyway, we actually walked away from 3 dealers because of it before a we made the purchase from a small local dealership.

Someone help me here… why exactly is it bad to tell them your monthly payment limit? If you want a five-year loan (or whatever) and you want the payment to be a certain amount or lower each month, I don’t see how they can sneak things in on you, as long as you are firm with the above two requirements.

Or am I being incredibly naive?

Your real concern should not be the size of the payment, but the cost of the car. If I said I could afford payments of $350 per month, there’s no doubt that a dealership would be willing to hook me up with pretty much any car on their lot, whether Geo Metro or Caddy Escalade. But that doesn’t mean that I will pay the same price for either car – and it certainly does not mean that I will get a fair shake on the value on my trade-in, on the interest rate of the loan, or the term of the loan.

Jean Grey: you are incredibly naive.

When buying a car, you should always buy on price, not payments. Many of the reasons have been covered here (or in the links, reread them), but consider:

You say you want to pay $350/month. What’s wrong with this picture? No time value. How many months? $350 x 36 months is a lot less than $350 x 60 months. So the salesperson could try to convince you to spend “just a few dollars more” per month. Maybe $376. That’s not really much more, less than a dollar a day, right? But $26 x 36 = $936, a grand more than you meant to spend. If you’re financing 60 months it comes out to $1560 extra. Cha-ching. Now how much have you paid for your car? The answer is that you don’t really know anymore. Which is right where they want you. Throw in trade in values, downpayments and interest rates and you can get very confused, even if you are very intelligent. The key is to reduce the variables to as few as possible.

Oh, forgot to mention: a lot of salepeople will use monthly amounts to try and squeeze you into a lease. They make money on the value of the car sold, not on the payments. So Jean, sure you came in looking at the Focus, but for just a few dollars more, heck, I shouldn’t even be telling you this, just $399/month, I can put you in this Thunderbird convertible. That’s the one I saw you looking at when you came in. Of course we’d have to go lease to get you in this beauty, but the cost is really the same for you…
Of course your out of pocket cost is the same, but in the end you don’t own the car, you might get screwed on the residual, maybe paid a larger “capital reduction cost”, paid extra at the end for excess miles (at 0.25/mile), maybe a penalty for excess wear and tear, etc.

Jean, I think as long as you know ahead of time what kind of real price you can afford, they’ll have to try hard to get anything past you. For example if I say I can afford $350 a month, they can try to tell me that I might be able to afford a $14,000 car at x.x% interest. Don’t let them tell you that, as you should know already. You should know the interest rate and the purchase price of the car you want, and you should be able to figure out a ballpark monthly payement for yourself. There are also plenty of places where you can plug in numbers and figure it out–payment calculator from They also have a calculator to help you decide whether it’s beneficial for you to accept a rebate or special APR (it’s one of the tabs at the top of the calculator).

So, plugging in numbers for my current situation (and known interest rates for area dealers–ie 3.9% for 60 months), I can get a $19,000 for about $380/month (with no down payment and my little trade-in). Now, if I went to a dealer and said that I could afford $380 a month, there’s a chance that he’ll try to find some way to maximize his profit while confusing me as to how much my $380 a month will actually buy (by adding options and quoting their price in terms of additions to the monthly payment, for example, instead of the actual cost).

I should add that although upon reading back over my post, it’s not real clear. I do agree with the other replies, and I do realize that for my hypothetical $19,000 there, I’m paying an extra couple thousand dollars over the course of the 60 month loan. However, that’s the American way, right :smiley: Save money now, pay a little extra later. As long as you know what you’re getting yourself into, so it’s not a surprise.

A guy I went to grad school with bought his first new car after graduating to celebrate getting his first real job. He told me that when they handed him the paperwork to sign, he didn’t even have to do any math, he just glanced down the column of figures they showed, saw that all the individual amounts ended in either 0 or 5 and yet somehow, the grand total ended in an 8. IIRC, he stood up, said, “If you people can’t do addition right, you don’t deserve my business,” and walked out.

Former car salesman checking in here (don’t ask - worst year of my life).*

Yes, it’s a common scam. While car salespeople might look and act like idiots, they are actually cunning, conniving bastards. And that’s the good ones.

Firstly, you really should avoid getting your financing from the dealer, if you can possibly avoid it. Sometimes when i was selling cars, if we got some guy who was set on a particular trade-in value or sticker price, the manager would let the car go for that price as long as we got to do the financing. This was because the manager knew that we could make more on a four year financing deal than we would have made on the car. Also, if the guy is going to bring his car back into your dealership for servicing, you also make money in that way.

Second, if you are really set on trading in your old car, forget any illusions you had about how much its worth, or how much your new car should cost. The ONLY figure you should be concerned with is the changeover figure; that is, the amount of money you have to give the car dealer in order to hand over your old car and drive out in your new one.

Getting hung up on the trade-in value of your old car can just get you screwed. For example, say you think your heap of junk is worth $5000, and you won’t accept a penny less. You go to two dealers, and the first offers you $4000 while the second offers you $5000. You think, “Great, i’ll go with dealer number 2.” But what you don’t realize is that dealer number 2 is charging you $22,000 for your new car, whereas dealer number 1 might have charged you $20,500 for the same car, saving you $500 overall. IT’S THE CHANGEOVER VALUE THAT IS THE KEY, BECAUSE THAT IS THE AMOUNT COMING OUT OF YOUR POCKET.

It’s also good to be very clear, before you sign the deal, about what extras you do and don’t want in the car. If you agree to a deal without the extras, you can then be screwed when you add them on. For example, our dealership used to get a rustproofing package done by a local company. The company charged us $175 to do the job, and we charged the customer $850. How’s that for a markup? If we thought the customer was getting nervous about doing the deal, we could always knock a few hundred off the rustproofing; but if the customer had already agreed to the deal, and was adding the rustproofing later, then he always paid full price and got shafted.

Once you’ve decided which car you want to buy, what colour you want, what extras you want, etc., then go to three separate dealerships (at least) with your old car. Tell each of them that you want them to quote you a changeover price, based on trading in your old car for THE EXACT MODEL, COLOUR, EXTRAS, etc. that you want. Be sure to emphasize that the quote should include all the extras.

Tell each dealer that you are going to two other dealers, and that the dealer that gives you the best quote will get the sale. Tell them that there will be no second chances, and that you’re not interested in running back and forth conducting an auction. This should ensure that they go “balls and all,” as we used to say, on the quote and give you their best possible price straight away.

  • Note: this information is based on one year’s experience in selling new cars in Australia in 1990. Things may have changed, and may also be different in other countries.

Another trick that they are using out here in the desert. The Salesmen stay in the building (or right in front of it) waiting for you to come get them. At that point, they KNOW you have found a car that you LOVE, and that they can basically ignore any reasonable offer and say that the price is firm.

And do not get me started on “Desert Protection Package” which consists of a shiny wax job and Armor All for an additional $1000. (Up north they do it with Undercoating) which can be done aftermarket by a reputable body shop for about $150.