So Roomie needs a car to tool around in and sees a couple good deals on Cars Dot Com. She asks me to go along with her to the dealership to guide her, and I tell her I would do it under one condition-If I say “goodbye” and walk out, she was to follow me out the door, no questions asked. Unfortunately, when we get there the dealership was closed(contrary to their website and the phone call we made before leaving). We see another used car lot down the street and go there. The saleswonk almost teleports to my side and asks me what I am looking for and I reply “SHE’S looking for something $4000 or less with halfway decent mileage and not too much damage’”. He immediately takes us to a used car with a sticker that reads “$5999!!”. I point out the difference between what we asked for and what he showed us, and he grins and says “We are gonna knock a thousand bucks off the price just for you”. I told him that we would like to see something else. He then passes us off to a fellow salescreep who tries to sell us a “bondoed-to-the-max” Nissan Quest…for $4999. He says that this car usually goes for $8999, but because their mechanic didn’t have time to take a look at it, we can have it totally as-is for $1000 more than what we told them we have to spend when we first walked in.
Lucky us.
Roomie sees a car for $9999 that she thinks she might be willing to make payments on, using the $4000 for down payment, and she says, both to me and to the dealer, “The highest I can go is $100 per month”.
I figured that after putting down a down payment of $4000 on a $10,000 car she shouldn’t have a problem. The dealer said "Just let me take it to my manager, but I think he’ll go for it.
We wait 12 minutes.
Finally, he comes back, smiling, and says “I got your deal!”. Written down of the contract, it says that we can have the vehicle, after a multitude of fees have driven the cost up to $10735, for $4000 down payment and $175 a month for 60 months.
You do the math.
I ask him what her total cost will be, and he says “$9999”
I ask him again, “How much money will she finally be giving you”, and he says “$4000, plus fees, plus the $6735 she is financing, of course!”
“No! How much money will be coming out of her pocket, total, to pay for this car?”
“I don’t understand”
I grab a pen, do a little math and show it to Roomie. And she stands up, says “Goodbye”, leaves…and I follow her out the door.
For cheap cars you should buy privately (Craigslist for example)–and have the vehicle inspected by a mechanic.
Not only that, don’t ever tell a car salesman how much you want to spend or what kind of monthly payments you’re looking for. This is car shopping 101.
Back when I was doing onsite tech support, I did a call to a used car lot. While I was working on their network, one of the salesmen tried to sell me a car.
I know a guy who has had all sorts of jobs, including running numbers. He told me selling cars was profitable, but only because he screwed every buyer in so many different ways. He sold his MIL a car. She was family and he liked the woman, but he couldn’t help gouging her a bit because of how trusting she was.
Lambs to the slaughter was how it was.
That goes for new car buying as well as used car shopping.
Any discussion of the “total” cost AKA down payment + sum of monthly payments is inherently suspect. It’s bad accounting.
I understand the point, that financing something raises the lifetime outlay for it. But that’s only logically comparable with the opportunity cost of paying cash for the whole thing, plus whatever else you could do with the money during the life of the loan.
It is important for a buyer to understand both the cash price & the total financed outlay. But most people are really bad at time payment math, NPV, etc., and the second number is as likely to confuse as it is to inform.
But yes, used car dealers are scum.
Unless the mechanic sucks and says everything is great, and the car’s transmission dies 3 months after you buy it. Then you’re paying off a $3,000 car for 3 years that is sitting in front of your mom’s house undriven until someone takes it off your hands for $300.
That was my first fucking car. I was young and listened to the advice of everyone I knew.
After that I used my own brain, ignored everyone else’s “advice” and I’ve had nothing but great experiences with cars since.
(Except when I bought Vlad the Impala, a car as old as I was, and no I didn’t name the car it came with the name. But I got my $100 worth from that death trap at least.)
The car salesman was happy to give Roomie a 19% interest rate on that loan. I’m sure he would have gotten a nice hefty bonus from it.
So, was the salesman playing dumb there? Or do (some) sales people at car dealerships really not understand a measure like “total cost” rather than “affordability” (which comes down to, “can you make the payments”)?
I teach my students about total cost when comparing loan terms but with the context that to be educated consumers they need to ask if it is worth the extra money to get that particular car. In this case roomie will be averaging that extra cost over 5 years or $62.75 per month (for 5 years). Is it worth it to her to spend that extra money to get that car?
He was attempting to confuse the issue and make the sale.
Which is why you never go to a car dealer that claims “We treat you like family!” 
CarMax seems pretty reasonable. No haggling and they make sure that the cars are sound before they sell them. If you’re super savvy about cars, you can do better of course but most of us aren’t.
The car sales industry as a whole is ripe for disruption. Outfits like Carmax and the online car sales like Carvana are carving out some of this market. You may pay a little more but their business models seem to treat their customers with a bit more transparency.
In 2000 I was in the market for a new car and was looking for an Accord. The dealership was really trying to screw me. It told them that I could get a better price on carsdirect,com. They assured me that it was impossible and that they were lying and their price was the best. I went back with a printout from their site and suddenly they were able to price match.
Definitely.
When we bought our Tesla Model 3, all of our interactions were via email and apps. The car appeared in our driveway, with the only notification via the app and an email. They didn’t even ring the doorbell.
The whole dealership model of car sales, resales, and repairs needs to be replaced.
To add to me anecdote. The California auto dealer’s lobby group tried very hard to ban internet new car sales. Fucking assholes.
Supposedly. We bought a used minivan from them and it seemed to spend more time in their shop than it did with us!
Yes. I’m irritated by the service package my wife signed up for and I agreed to–tire rotations and oil changes for a good price (tired of laying on the garage floor changing oil). Of course, they ALWAYS find something wrong that costs $$$.
The last time I brought it in they claimed her brake pads were at 3mm and needed replacement “right away,” and it was a “safety issue,” so I HAD to approve it. Of course, they would also get $600 for the job. I said no, bought a set of pads, and took time this past weekend to change them. I don’t know what gauge they were using, but there was at least 5mm on each pad. Of course, I had the car up on the jack and the tire off and had pulled the pads, so I went ahead and changed them, but I was irritated.
That’s why I like using my mechanic. Little shop, only accepts cash, but he’ll pass my car for inspection if I promise to replace my brake pads in 6 months (and I do). I like to get as many miles as possible out of tires, brake pads, etc.