Advertisement rules the world of commerce. Any smart CEO knows there has to be a big chunk of money invested in good ads if you want to overcome competitors and win at the trade market. Usually the advertisements show the products better, “sweeter”, and more desired than they actually are, but this is exactly how they can “catch” more customers in their “nets”.
A TV commercial about a beautiful shiny sports car which runs like a demon, has numerous gadgets and incredibly low price mesmerizes any consumer. Every time a person sees it, he or she wants to run to the nearest dealer and get that beauty, but sober mind should be always ahead of crazy emotions in an auto purchase.
If the ad seems too good to be true, the consumer is better off with double or even triple check-up before making up the mind on a good offer. First of all, it never hurts to read the tiniest script underneath a newspaper ad which might hide some tricks as for the “goodness” of the offer. The same goes to TV or radio commercials: quick chattering in the end might be hard to figure out, but its purpose is to hide what should not be shown to wide public.
The most common ads like these are:
• Buy this car for just $159 a month. Oh, wow, you can definitely make it with the low payments like they offer! Speaking about a price of a vehicle in low monthly hundreds instead of thousands of dollars is one of the favorite dealers’ tricks and it works well. First of all, do the math and count the total price they offer with the little payments. As a rule it is obscenely high and there is really no need to pay that much for a car. Besides, figuring out the total amount will help realizing the deal is not as good as they speak about it. If there is no problem with the total price, look at other tricks: there might be a very big down payment or the deal will only be approved with very high credit record. The low price might also be the indicator that there are no optional features which people like to use.
• Zero-percent financing. This is really interesting because a customer can actually buy a vehicle for pure price without any additional interest, but… There are tricks to this kind of offer as well. Before rejoicing at the great offer, look if the ad has little print that says: “with approved credit” or any phrase alike. Dealers would not give this offer to anybody, only to customers with credit score 700 and higher.
• Dealer pays off the old car with a new purchase. Why would any company decide to give you a big sum of money without gaining a penny? If you go for this offer, read the contract absolutely carefully to see what they are doing. As a rule the thing goes like this: a person already has a vehicle which he or she is not done paying off, so with the pure value of $4,000 there is still $9,000 to be paid off. When this auto is traded-in, these thousands will not be cut off. When a dealer puts together a contract for a new vehicle, he adds the $9,000 to the cost of the new vehicle. Looking at monthly payments the customer does not notice a great difference, but those thousands are shown at the total amount you have to pay off. Another trick here is that the $9,000 is well above the price of the new car, so the loan on it will be considered as unsecured and treated with very high interest rate.
• Dealer pays $4,000 for any trade-in. This trick is more than 50 years old, but there are still folks that go for it. It works the same way as the previous one: the dealer will only give for the vehicle what it is worth, the rest of the price will be put on the new car. Watch out, negotiate and read the details in the contract to find out the truth.
• Huge end-of-the-year sale. This is the one that is the closest to the truth among all the tricks. If a customer does not care what model-year to buy, there might be a winning in the deal like this. However, always keep in mind that in the end-of-the-year sale you are buying an almost one-year-old car, so its price should be not of a new one, but as of an older model car. If you are one of those people who resell cars every two-three years, this one year at the dealership might be a loss for you at the time of sale.