Marketplace Report: Car Sales Shenanigans
ALEX CHADWICK, host:
Back now with DAY TO DAY on this President's Day - a holiday that is also one of the biggest days of the year for car sales, which makes it also one of the biggest days of the year for car sales shenanigans. And what better guide to underhanded the behavior than MARKETPLACE's own Steve Tripoli? Steve, I don't mean anything bad by that.
STEVE TRIPOLI: Oh, Alex, you - how are you enjoying that land I sold you in Florida?
CHADWICK: You know, my mother's just still getting used to the idea of an alligator as a pet.
(Soundbite of laughter)
CHADWICK: All right, let's get to the sales pitch. And we have a little tape, here.
(Soundbite of commercial)
Unidentified Announcer: President's Day only comes once a year. And to celebrate, GMC has a commanding offer: 0 percent financing on almost every '07, like 0 percent for 60 months on a Sierra classic. Hurry, five days only, then this term ends.
CHADWICK: So, sounds like sales that are going pretty good at the GM lots, anyway.
TRIPOLI: Yeah, we ought to bolt the studio and get down there, Alex, you know, but I will say there is one perfectly accurate statement in that ad. President's Day does, in fact, come just once a year. But let's be fair. The deal that they talked about also probably does end after five days like they say, because then the next deal starts.
So lesson number one with an ad like that: don't ever be stampeded by a car salesman. Everything's negotiable all year long.
CHADWICK: Well, what are the other classic things that people should look out for today if they're out shopping for a car?
TRIPOLI: Tell you what, Alex. I'll play the salesman and see if you can suss out some of the tricks. You want to try that?
TRIPOLI: Okay, ready? Oh, Mr. Chadwick, great choice on that white Lexus coupe. Best buy on the lot, you know. I see you also qualify for the special financing. Wow. Payments are just 479 a month for 60 months. Great stuff, sign right here. Okay, Alex, what should your response be to that kind of pitch?
CHADWICK: Gee, I don't know, is special financing good or bad?
TRIPOLI: Well, it can be good, but you know what you need to do with that number is take a breath and crunch those numbers yourself before you sign, because a practice that some dealers uses called price packing, where they get that monthly payment number just a little bit wrong, maybe $15 a month. But, you know, $15 a month over 60 months means they just got an extra 900 bucks out of you.
CHADWICK: Well, what if I'm a really well informed person? Say I bring my consumer reports price chart, and I get them to sell me my white Lexus, right at invoice price, and with good financing. That sounds pretty good, doesn't it?
TRIPOLI: Oh, Mr. Chadwick, that's a great deal you got there, you know. But now, how about that extended warranty? And by the way, this car comes with stain proofing of the carpet. It has already has that, and then just a $150. And, you know, we have to charge that 97 bucks to install those special wheels you ordered. So what do you say to all that, Alex?
CHADWICK: If the carpets already have the stain protection on them, why do I have to pay for it?
TRIPOLI: Right. You know, you're on the right track, there. I mean the lesson is, even if they got a great price, you got to watch out for all the add-ons that they hang on to these deals. Don't take their word for it that you can only get such-and-such an interest rate on your car loan. A bank or credit union could do a lot better, maybe thousands better.
And don't let them talk down the value of your trade-in. Get that value independently. You can also check that on the Web before you face all these Honest Abes out there at the President's Day sales. Finally, Alex, if you do manage to straggle out of the showroom with a good deal today, coming up later on Marketplace, we'll examine how stocks scammers may be taking advantage of the boom in alternative fuels.
CHADWICK: The ever-vigilant Steve Tripoli for Public Radio's daily business show, MARKETPLACE. Thank you, Steve. And MARKETPLACE is produced by American Public Media.