By on July 26, 2017

cars dealer dealership, Image: HappyAlex/Bigstock

In the last five years, I’ve visited over 2,500 dealers in 44 different states. Sometimes I think I’ve seen everything. And just when I think that, I’m invariably proven wrong.

This week, I walked through the doors of a massive dealership — easily one of the largest dealers I’ve ever set foot in (the name and make of this dealer shall remain anonymous, since the conversation was “off the record”). This dealer sells upwards of 500 new cars a month and about 200 used per month, and they’re planning to add even more floor space so they can increase their volume.

As I waited to talk to the GM, I browsed the cars on the showroom floor. Considering the overwhelming success of this store, you can imagine my surprise when I saw that every car on the floor, without exception, had an extra sticker on the window.

The sticker said:

DEALER-ADDED EQUIPMENT AND SERVICES

ADJUSTED MARKET VALUE $1949.00

LIMITED MARKET AVAILABILITY $1000

TINT $200.00

TOTAL $3149.00

I damn near sprinted around the showroom to check, and yes, I was right — this sticker was on Every. Single. Car. The dealer did have a couple of new models that, in theory, could possibly be considered “limited availability,” but most of them were “limited to how many the factory can produce in a year.”

Of course, everybody knows (because the internet says it’s true) that dealers absolutely, positively, do not make money on new cars (insert eye-roll emoji), so I had to find out what was going on here.

Turns out it’s some pretty sinister shit that you, the consumer, definitely need to know about.

There are a fair number of manufacturers that absolutely, positively, will not allow their dealers to advertise below invoice (Toyota, Honda, etc.), so they have to get fairly creative in order to advertise “specials” to entice customers to come in the door. Let me explain.

Have you ever shopped at a liquidation sale, like when Circuit City went out of business? The liquidators buy up all the inventory and subsequently throw up big “50% OFF” signs all over the store.

Well, of course that’s not really true — the inventory of washers, dryers, and HDTVs is, in most cases, actually no cheaper than it was before, but they can advertise it as 50 percent off by marking it up  before “slashing prices.” In order for your local Japanese import dealer to do those “$5,000 OFF ALL NEW CAMCORDIMA” sales, they actually have to mark the cars up first.

You may be saying to yourself, “But, Bark, isn’t that illegal?” In some states, yes, it is. In many states in the union, you can’t put any dealer markup on the sticker. In others, you have to put something of value on the sticker in order to mark it up — you can claim that window tint is worth $2,000 if you want to, but there has to be something there. However, in many states, you can put whatever the hell you want to on the sticker, and you can make it look nearly identical to the actual Monroney sticker.

But is anybody actually stupid enough to fall for this? Does anybody ever walk in and pay full pop plus an additional $3,149? “Sometimes, yes,” said the GM of this particular store. “It’s almost always immigrants who don’t know any better.” While punching people labelled as Nazis may be up for debate, I think we can all agree that it’s okay to punch GMs who take advantage of immigrants.

“But,” he continued, “we actually only sell about 10 percent of our cars at MSRP or above. It’s psychological warfare — the customer feels like he’s getting a really great deal, but we know that we’re glad to sell the car at invoice, so anything above that is a win.”

I did a quick check of his third-party listings on the usual suspects, and noticed that he didn’t have any of the ADM added to his cars on the classified sites. “No, of course not. Nobody would click on them if we did that. We advertise at invoice, which is the minimum price that we’re allowed to advertise at.

“However, if you click through to our website, you’ll see that all of the cars have a little button that says ‘Click to unlock our Internet Specials.’ If they click that button, they have to fill out a contact form, including name, phone number, and e-mail. If they provide a valid e-mail, we’ll show them the real price — invoice minus holdback and all dealer fees. Every internet deal is a loser for us, but it helps us hit our sales targets.”

In case you’re not playing along at home, I’ll sum it up for you: the dealer marks up all of his cars on the sales floor, hoping that uneducated customers will fall for it, so that he can, in turn, sell the majority of his cars at a loss to smart shoppers, but only if they’re willing to give up a “lead.” It also allows him to advertise “sales” to pull in more traffic in the slower times, even though the sale price is, in most cases, essentially MSRP.

And dealers wonder why customers don’t trust them. So how can you avoid this sort of nonsense?

It sounds simple, but do your homework. Over 80 percent of customers now “research” online before they visit a dealership, but the vast majority of that research consists of reading new car reviews and dealer reviews on Google and DealerRater. At the very least, if you’re shopping new, you need to come to the dealer armed with invoice numbers.

Third-party searches are a great place to start your search, but it’s not where you should end it. Many dealers are doing exactly what my new GM friend is doing — saving the best deals for their own websites. Doesn’t really matter if it’s due to OEM regulations or if it’s because the dealer thinks that he closes at a higher percentage on leads from his site, it’s just true. After you find the car you want via Cars.com or AutoTrader.com, head over to the dealer’s site to make sure that better pricing isn’t available there.

This tactic of forcing a customer to give up an email address in order to “unlock” the best deals is, unfortunately, becoming rather commonplace. While I don’t really care if a dealer spams my personal email (60,000 unread and counting), you might. So it doesn’t hurt to throw together an extra email address for yourself like “barkcarshopping2017@gmail.com.” As long as you actually create the address, their CRM tools will recognize it as valid and email you the pertinent information.

Also, never, ever pay ADM. Not never. I don’t care if it’s the latest and greatest car on the market. MSRP, sure. ADM, nope. I bought two of the hottest, most marked up cars on the market (2013 Boss 302, 2016 Focus RS) and refused to pay ADM. There certainly is no reason to do it on a 2018 Camry.

Lastly, don’t write off a dealer that has a car you want just because you hate their tactics. While it can be somewhat emotionally satisfying to say “screw you” to a dealer who marks up everything on his lot, there’s no reason to inconvenience yourself by driving across town or, God forbid, flying across the country. Chances are the dealer isn’t as stupid as he’s appearing to be and that he understands that he’ll eventually have to sell the car at invoice or below. Just make it clear in your communications that you’re willing to pay invoice minus holdback, and stick to your guns. No negotiation, no haggling. Invoice minus holdback and go.

Now you know how to avoid this particular dealer trick, but as long as there are franchise dealers, there will be more tricks. If you come across any new ones, email me at barkm302@gmail.com and I’ll let you know how to beat them. It’s kinda my thing.

[Image: HappyAlex/Bigstock]

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129 Comments on “Bark’s Bites: The Dealers Who Add $3,000 to Window Stickers While Secretly Selling at Invoice...”


  • avatar
    I_like_stuff

    I always wonder who is stupid enough to fall for all those Nigerian prince scams? Well now we know, they also fall for dealer scams. Unreal.

    • 0 avatar
      Luke42

      From what I’ve heard, the Nigerian Scammers deliberately fill their messages with typos and bad grammar so that people who are discerning enough to notice such things won’t answer their mass emails.

      People who are gullible enough to respond but discerning enough figure out the scam before sending their bank account information can really eat into their profit margins.

      More information:
      http://www.419eater.com/html/trophy_room.htm
      http://www.419eater.com

  • avatar
    -Nate

    Jesus H. Christ .

    Why can’t they just lower the prices and SELL the damned things ? .
    -Nate

    • 0 avatar
      Hemi

      It annoys the piss out of me when I go buy a car and they have added things as mentioned in the article, tint, vin etching, pin stripe, dealer paint and carpet protection!!! It adds at least 3k to the price of a car. Last one I bought, the only option was “added paint protection” for 1.5k. I told them to remove it from the car bc I didn’t want it. They eventually budged and removed the 1.5k charge.

  • avatar
    Dave M.

    Fascinating and sad. Which is precisely what keeps me and you and a whole bunch of others in the game as a car consultant/negotiator. I relish the game on behalf of perhaps a dozen buyers yearly. An intense hatred of dealers and the buying process is fully understood.

    • 0 avatar
      I_like_stuff

      How does one get a job/gig doing that? I’d love to and would be good at it.

      • 0 avatar
        Dave M.

        I didn’t say it paid….often gift cards and dinners are sufficient since it’s a hobby. I’m sure there’s a way to make it a pay model -$500 fee to save a minimum of $3000; additional $250 if a trade is involved?

        • 0 avatar
          trackratmk1

          The problem I find with personal auto consulting is finding people who are willing to admit they are in over their head buying a car. It never ceases to amaze me how many incompetent buyers tell me AFTER they bought a car at how great their deal was, when in reality they got smoked.

          It’s hard for people to be big enough to admit they don’t know how car buying works. They think they’ll still win.

          • 0 avatar
            White Shadow

            The only thing that really matters is the buyer’s perception. If he/she thinks it was a good deal, then all is fine and dandy.

          • 0 avatar
            Erikstrawn

            “It never ceases to amaze me how many incompetent buyers tell me AFTER they bought a car at how great their deal was, when in reality they got smoked.”

            If the dealer takes a picture of you getting the keys to your car and gifts you a calendar of the event, you got smoked.

  • avatar
    I_like_stuff

    “Just make it clear in your communications that you’re willing to pay invoice minus holdback, and stick to your guns. No negotiation, no haggling. Invoice minus holdback and go.”

    Yep. Car shopping doesn’t have to be hard. Whether new or used. Make an offer, stick to it. Shouldn’t take more than 5 minutes of “negotiating” to reach a final price. Don’t play the dealer games with sitting down at a table with a 4 square, going back and forth to the phantom sales manager or any of the other bullshit.

    • 0 avatar
      trackratmk1

      Yet somehow I hear stories every week about lease customers getting written up at 10% over MSRP, and they never know until they want out early and they’re tipped $10k negative on a $25k valued car.

      It’s not easy for A LOT of people… or maybe it is too easy??? —-> “Just sign here and we’re all set…”

  • avatar
    MrGrieves

    Dealers are insanely guilty of ADM tactics in Alabama, but I believe they are required to provide equipment for it. $500 Nitrogen filled tires? $800 Window Tint? And so on…

    I once had a Honda salesman explain the need for $1000 paint protectant on a Civic. He said “The paint tends to peel after a few years on these cars, so you must have this or you’re setting yourself up for a huge problem.” Salesmanship 101!

    • 0 avatar
      JimZ

      It never ceases to amaze me how easily these people can talk out both sides of their mouths. “This car is the best ever it’s so awesome you’ll love it but it’s a piece of junk which will fall apart in a couple years so buy all of this protection and extended warranties!”

      • 0 avatar
        gtemnykh

        Yeah I find that hilarious. “Wow, must be a pretty poorly built car if it will rust out within a few years from a rock chip without this active-electrode rustproofing gadget!”

        My Civic that I bought used had one of those useless rust-prevention systems on it, it was one of the most blatantly ineffective and preposterous devices I’ve seen in my life.

      • 0 avatar
        Kyree S. Williams

        This. My best friend accompanied me to the Honda store in test-driving the 2017 Civic EX-L and 2017 CR-V EX-L this past January. When we balked at the asking price, he said, “This is *the* best car on sale, hands down.” When we complained about the hard plastics—which, oddly, were not in the comparably-equipped CR-V we drove—he said “Well, it’s a cheap economy car…what do you expect?”

        He was also quite flatulent. Isn’t the point of buying a new car so that you, the customer, can be the first person to pass wind in it? And he was rude. The moment I walked in the door, he asked, “So are you financing or paying with cash?”

        But nothing beats the Chevy salesman, who, when we test-drove the 2017 Volt, said, “Most cars are just two cars welded together…a front half and a back half. But not Chevrolets; they’re one piece.”

        • 0 avatar
          JimZ

          “Most cars are just two cars welded together…a front half and a back half. But not Chevrolets; they’re one piece.”

          these are actual words that emerged from the mouth of a person?

        • 0 avatar
          LeMansteve

          Kyree – a Chevy salesman in 2017 told you that? I hope you laughed or left immediately.

          • 0 avatar
            Kyree S. Williams

            Yes. Granted, he also told us that (a) he had just started there three weeks prior, and that previously he’d been bussing tables at The Olive Garden, and that (b) he was working on this awesome wind-powered car, but was worried the oil companies would hire a hitman to take him out.

            He was definitely a reflection of that sleazy dealership, and not of GM. And, no, my friend did not buy his car from them. He bought it from a different Chevy dealership.

        • 0 avatar

          That’s amazing. Now I have to tell my favorite car-shopping story.

          We were test driving a used car at a dealership. For reasons, salesman and I were swapping seats in the parking lot of a supermarket. As I walk around the hood of the running car, I catch the sweet aroma of coolant, and wrinkle my nose. The salesman sees this, looks at the supermarket, and says, “mmm, groceries!”

          • 0 avatar
            Kenn

            My story (one of many): Many years ago, I test drove a new Mitsu Eclipse. When the salesman and I returned, he mentioned that the engine is intercooled. When I said this wasn’t the turbo model, he said it didn’t matter: He opened the hood, explained that the coolant leaves the radiator, goes through the engine, then returns to the radiator – “See, it’s intercooled!”

          • 0 avatar
            Kyree S. Williams

            @rcousine — Wow. Do you think he was serious?

            @kenn — For every knowledgeable salesman, there are two or three who don’t have a clue as to what they’re talking about, and will make up stuff…to people who know better. This is an example of such.

        • 0 avatar
          thornmark

          >>And he was rude The moment I walked in the door, he asked, “So are you financing or paying with cash?”<<

          I don't see rude, I see ineptly blunt. When I bought my first new car I thought they would like that I would pay cash – I was wrong – I learned that they make more profit from financing. The guy wanted to know where he was going to make his money and negotiate w/ that in mind. You might say the salesperson gave you a compliment because he thought you were one of minority that had the ability to pay cash.

          I was told that you should negotiate a price w/ financing in the offing and then pay cash. Now I let Costco do the negotiating.

          • 0 avatar
            gtemnykh

            I made the mistake of considering a Dodge Dart before buying my Civic, I walk into the showroom and the first thing the salesman asks is “so what kind of monthly payment are you working with?”

            media.giphy.com/media/fDO2Nk0ImzvvW/giphy.gif

          • 0 avatar
            Kyree S. Williams

            There’s a subtle way to do that, especially because we hadn’t gotten to the point of negotiating. At that point, I was just doing basic research, so I wasn’t buying anything that day or even that month.

    • 0 avatar
      TheDoctorIsOut

      In my son’s early days of car shopping we wandered over to a Pontiac dealer because of a used Integra we saw on the line, but the new car guy got there first and insisted he could get my son into a new Sunbird on a better deal than a used Acura. As we got into the front seats it didn’t take five seconds to realize these were the most uncomfortable seats in all of western civilization, best fitting a contortionist who lacked any sense of pain below the waist.

      We quickly exited the car and commented on the seats to the salesguy. His reply: “That’s a safety feature. They make’em that way so you don’t fall asleep behind the wheel.”

    • 0 avatar
      threeer

      I live in Alabama…not sure if it’s just our state, but shenanigans do abound there. When I bought my 2004 Lancer Sportback Ralliart (used…this was in 2010), the dealership attempted to charge me several hundred dollars for “enhanced security/theft protection” measures that they were going to graciously provide for me, basically VIN window etching…that was already on the car. I guess they figured I would never actually LOOK at the car during my test drive. The car was traded in to them as it sat, they did nothing to it and were attempting to charge me for it.

      I know that dealerships (and hence the folks that work there) need to make a living. I get it. But there are enough times I’ve had a dealer try to pull crap that the stereotype exists for a reason.

      It did work (sort of) to my advantage once. I was looking specifically several years ago for a manual transmission Ford Fusion (1st gen). I found one via Carmax, but it was in St. Louis and not the Charleston, SC area where I was living at the time. Back then, you were granted a handful of questions you could ask the Carmax genie before committing to having a vehicle moved from one location to another. They swore up and down that it was a six cylinder with a manual transmission, which I knew didn’t exist. When the vehicle was brought to Charleston for me to inspect, I popped the hood and politely told the salesperson that they had falsely advertised the vehicle, even after I pointedly asked the question to confirm the cylinder count. Manager actually knocked off a decent chunk of change to make up for it. Probably still priced higher than if I had found a different place to buy from, but it was the car I wanted and after dealing with the cylinder count snafu, the experience was a fairly smooth one.

      Where do I sign up for that extra headlight fluid??

    • 0 avatar
      Luke42

      “He said “The paint tends to peel after a few years on these cars, so you must have this or you’re setting yourself up for a huge problem.” Salesmanship 101!”

      When we bought our Civic, the finance manager said something similar.

      My response: If I believed that would happen on this car, I wouldn’t be here buying it.

      That shut that $#!t down fast.

  • avatar
    JK43123

    Gotta be Ricart.

  • avatar
    dal20402

    The Ford dealer where I leased my C-Max does exactly this. Their first lease quote to me was ridiculously inflated, but as soon as I complained that it was inflated they folded like a house of cards and gave me the best deal of any dealer I contacted.

    • 0 avatar
      Luke42

      In my business school price theory class they argued that each buyer has a different price they’re willing to pay (hence the demand curve), and so the way to maximize your profits (and not leave money on the table) is to sell the same stuff at different prices to different people (price discrimination).

      They also explained that buyers can smell a rat and sometimes share pricing information with each other.

      It sounds like this dealer is trying to exploit this theory by determining the customer’s sucker-level and adjusting the price.

      What they song see are the people who never show up because of their prices. But maybe they have enough foot traffic that they don’t have to care about that.

      As cynical as it sounds, I bet it works fairly well as a way to boost profits.

      • 0 avatar
        Bill Wade

        I owned a company that sold business telephone systems.

        Price was entirely dependent on the customer. Many purchased at nearly cost knowing we would generally have the backside moves, adds and changes along with service. Usually we recouped our investment within a year.

        Others paid a reasonable markup up front which paid for the equipment and labor along with slightly subsidizing the other sales.

        Unlike some car dealers we never stuck somebody to the ceiling. It was a low margin business that required us to do things as efficiently as possible to compete.

  • avatar
    Jean-Pierre Sarti

    thanks Mark, one question, just to confirm, are you saying for most dealers the price you see on cars.com or autotrader is their invoice price?

    • 0 avatar
      iNeon

      Those are bait prices– prices with double, conflicting, rebate schemes– well below invoice.

      • 0 avatar
        I_like_stuff

        You have to be a recent college grad, in the military, lease a competitor’s car, own a construction business, belong to an obscure organization and live in one of 3 zip codes in Alaska to get the price advertized.

        So it is a “legit” price that nobody could possibly qualify for.

        • 0 avatar
          Erikstrawn

          Being in the military doesn’t get you a good price. Young airmen, away from home, getting a good paycheck for the first time in their lives? Salesmen salivate just thinking about it. Then the airmen end up in financial counseling classes because they can’t pay their bills.

          • 0 avatar
            joeaverage

            Most bases I was ever stationed at 20 yrs ago had a band of businesses around them that functioned as parasites on young enlisted men.

            It was the same shops that cater to low income urban youth.

          • 0 avatar
            Bill Wade

            The local base here went after the scammers with a vengeance a few years ago banning all kinds of dealers, bars and other businesses from military personnel along with base legal going after contracts.

            It was amazing how many immediately went out of business. Nobody else since has had the cajones to try it again.

            One dealership group has purchased almost all dealers and is actually a good group to work with. They treat military very well. I was listening to a salesman at the Ford store talking a young military kid out of a Mustang GT and pushing him to a Fusion. The guy had his wife and young son with him. I complimented the salesman later for that.

      • 0 avatar

        Actually, no. AutoTrader AND Cars will bounce you for doing that. Of course, it has to be reported first.

  • avatar
    StudeDude

    I shouldn’t be surprised that some dealers are still resorting to “Bump Stickers” with ADM and the like, but I did think that it was pretty rare. I noticed a Mazda dealer in PA trying to get $500 for Nitrogen filled tires 2 years ago, but believed it to be an anomaly. Looks like that’s not the case.

  • avatar
    Marko

    “In many states in the union, you can’t put any dealer markup on the sticker.” Which states are those? Google-fu is failing me.

  • avatar
    ajla

    An ADM-style sticker on *every* new vehicle is practically BAU around here these days. Probably 70% of the region does it. It certainly seems just like a way to prey on foreigners and the elderly.

    Another thing to watch out for in certain states is the dealer/doc fees. Florida for example doesn’t have a cap on these so they can often approach $1000 (sometimes $2000). The fees dont need to be on the window stickers and often dealers try to bury it in small print on the PO hoping people don’t notice it.

    • 0 avatar
      I_like_stuff

      I once had a dealer tell me they have to charge $250 because it’s the law. I said, oh really? Can you tell me the exact statute? And of course the law said a dealer cannot charge MORE than $250, and $0 last I checked is not more than $250. But probably 95% of people just blindly pay that $250…cuz…well it’s the law and stuff.

      • 0 avatar
        dwford

        Yeah, it’s not the law. But here in Connecticut the dealer fee is considered a taxable service fee, so not only do you pay the extra $499 or more, you pay sales tax on top of it.

      • 0 avatar
        Kyree S. Williams

        They’re “half” telling the truth. Some states mandate that if they charge one person a doc fee, they have to charge *everyone* the doc fee. Or, alternatively, the dealership may open itself up to a discrimination lawsuit if it charges some people the doc fee (the ones who don’t negotiate it out), but not everyone.

        But all that means is that the line item has to be there. So when the dealership insists on the doc fee, I just let them know that they can either decrease the price of the car to cover it, or give me something in addition that’s worth the price of the doc fee (like some accessories).

        That’s also why I give them an out-the-door (OTD) price. “It doesn’t matter how you line-item it; I’m not paying you more than $X for this transaction.”

        Also, some manufacturers limit the amount of the doc fee that can be charged to military customers. I know GM does this.

        • 0 avatar
          healthy skeptic

          >> That’s also why I give them an out-the-door (OTD) price.

          I think that’s the way to go. When you play dealers off against each other, tell them you are negotiating OTD price only, after every last little item, and that you don’t want any nasty surprises at the end of the sale.

          Once that’s established, it doesn’t really matter how they line-item their own paperwork.

          But don’t forget to fend off the F&I guy afterwards, with all the add-ons he’ll try to sell you.

          • 0 avatar
            gtemnykh

            The straight OTD comparison between dealers is my preferred method, I tell them up front that I’m casting a pretty large net and talking to a bunch of dealers within a several hour-drive radius looking for the best price.

    • 0 avatar
      brettc

      Here in Maine I see doc fees up to $499 generally, which is nuts. They’re not capped here. NY state caps them at $75.

      But I’m sure dealers in NY have found ways to work their way around that limitation.

  • avatar
    Alfisti

    This all gets back to, yet again, the preposterous habit of not advertising the full price in North america. As an Australian in Canada it never fails to bewilder me how it got this bad.

    Back home the price is the price, you can negotiate but there are no added extra. it is an utter minefield here between PDI, delivery, ADM, taxes a…. for regular purchases add tips and eco fees.

    I don’t care about your costs, i really don’t, i just want to know what it is gonna cost me.

    Now sure as shit people will respond with “but state taxes”, I call bullshit, everyone knows what the tax will be on the item so just bloody well include it! I know you are all used to it but it’s absolutely stupid, all of it, the lack of tax in the price, the car buying fiasco, the tipping thing, absolutely stupid.

    • 0 avatar
      S2k Chris

      “Now sure as shit people will respond with “but state taxes”, I call bullshit, everyone knows what the tax will be on the item so just bloody well include it”

      In a lot of states, your sales tax is on the price of the new car minus any trade in (10% on $15k car minus $5k trade in = taxable amount of $10k, tax of $1k), so no, we don’t necessarily know what the tax will be.

    • 0 avatar
      notwhoithink

      “Now sure as shit people will respond with “but state taxes”, I call bullshit, everyone knows what the tax will be on the item so just bloody well include it!”

      It’s not just state taxes, it’s local taxes. I live just outside of Columbus, Ohio. Columbus is in Franklin County. The sales tax levied by the state of Ohio is 5.75%. Franklin County tacks on an additional 1.75%, for a total of 7.5% on a car sold in Franklin County to a Franklin County resident. But I actually live in Fairfield County, just east of Columbus and a bit outside Franklin County (probably less than 1 mile). So my sales tax is going to be 5.75% (Ohio) + 1% (Fairfield County) for a total of 6.75%.

      I can go into Franklin County and buy a car, but if it’s being sold to be at my home address and registered in my home county (Fairfield) then I’m taxed at the rate of Fairfield County rather than Franklin County. So no, they can’t just tack it on because what tax rate you are charged depends on where you live rather than where you buy (at least with cars).

    • 0 avatar
      joeaverage

      America! “Land of the Free” (to rip you off and limit your choices)

  • avatar
    readallover

    ADM or not, most dealers around me are charging the $300, $400, or $500 administration, paperwork, or whatever they call them fees.
    Its this kind of crap that sends people to Costco to buy their cars.

    • 0 avatar
      MrGrieves

      I bought a car from Costco 7 years ago. It was a pretty good experience, but since that time many of the “Costco Approved” dealers in my area have dropped out of the program. The only participant within 120 miles of my Zip Code is a Ford dealer.

      As an alternative, I’ve had good luck doing all the negotiation over the phone / email for the last two cars I’ve purchased. The salespeople tend to dispense with the initial “rip off” offer and go straight to something reasonable. One thing is for certain – I’d never walk cold turkey into a dealership to buy a car.

      • 0 avatar
        baggins

        you dont have to be afraid/unwilling to walk into the dealership, if you know what you want to pay. Last time I went into a Honda dealer to buy an Accord. Offered 4600 off MSRP, they accepted in 10 minutes. Longest part of the process was waiting for the call to be detailed and gassed up.

        4600 off was my estimate from 15 minutes of research on Edmunds forums about what people were paying.

      • 0 avatar
        joeaverage

        Depends. When I was looking for our most recent used car purchase no one would work over email. C’mon in and we’ll see what we can do. Never mind that some of the dealerships (brand specific) were 200 miles away.

        In the end CarMax won by several thousand dollars and alot less hassle.

    • 0 avatar
      golden2husky

      I can’t stand fees. To me, the definition of “fee” is you give them money and get absolutely nothing in return. Another supporter of a final, out the door price. Don’t care how you write it up but the squeal point is the squeal point.

  • avatar
    thelaine

    Great, simple, practical advice.

  • avatar

    I’d like to know who that dealer is so that I can avoid them at all costs.

  • avatar
    slavuta

    “Invoice minus holdback”

    so, you’re stealing their holdback too?
    Once dealer told me that “today, my family will have nothing to eat”

  • avatar
    SCE to AUX

    “It’s almost always immigrants who don’t know any better.”

    Sadly, this was also the testimony of my brother, who sold cars for a brief while at a large local dealer. On several occasions, he simply wrote up sales agreements for Indian immigrants (in his experience) who walked in and said “I’ll take this one” with no negotiation whatsoever.

  • avatar
    deanst

    Not really anything new here – people who take the time and effort to research the second biggest purchase of their life can save some money. Price differentials are everywhere – it’s the nature of the capitalist system. I don’t have a problem with the ADM scams – it is clearly stated, and if you are dumb enough to fall for it then you obviously haven’t done your homework. I have some sympathy for financing games as most people’s knowledge of basic math is abysmal.

    • 0 avatar
      golden2husky

      A scam is just that, a scam. While an educated consumer is going to get the best deal if they fight for it, at what point is this concept no longer OK? If you bring your car to a mechanic and he says it is “x” wrong should you know that his repair is unnecessary because you did an extensive diagnostic on your car? Or is ripping off the customer ok because he doesn’t know long term fuel trim from a spark plug?

      • 0 avatar
        bikegoesbaa

        Your mechanic example is a scam, insamuch as the seller is knowingly providing false information to mislead the buyer.

        A dealer charging ADM is not lying, they’re openly asking for a premium and the buyer who has been so informed can decide whether it’s worth it to them.

        It would be a scam if they said something like “ADM is a government fee, there’s nothing we can do about it.”

        If I sell you a lawnmower by telling you it’s self-propelled when it isn’t, that’s a scam. If I sell you a lawnmower for $50 more than they cost at Lowe’s because you didn’t shop around, that’s commerce.

    • 0 avatar
      brn

      “it’s the nature of the capitalist system”

      These examples are not the nature of the capitalist system. People misuse the word capitalism more often than they misuse the word literal.

  • avatar
    KingShango

    My local Hyundai dealer adds a pinstripe and tacky door trim to every car on the lot and charges $500 for it. And they’re quick about it too. Took a look the other day and they had already added it to every 2018 Sonata they had.

    • 0 avatar
      iNeon

      They’re added before the cars are even for sale.

    • 0 avatar
      Kyree S. Williams

      Me when a dealer does this: “I don’t want the pinstripe. I didn’t *ask* for the pinstripe. But I do want the car. So you can either scrape it off or comp the $500.”

    • 0 avatar
      SCE to AUX

      Pinstripes are totally worth $500, especially when the original price was $750.

      • 0 avatar
        healthy skeptic

        @SCE to AUX

        Tell them you hate pinstripes so much, in order for you to be seen driving around in a car with pinstripes, they’re going to have to knock at least $1,000 off the bill.

        And tell them to take the nitrogen out of the tires. That way, you don’t have to pay an extra $500 for nitrogen-filled tires, and they can have their $500 worth of nitrogen back, to sell to the next customer.

        • 0 avatar
          gtemnykh

          Yep, when my family drove 4 hours to buy a Honda Fit Base/manual for MSRP in 2007, the dealership in Patterson NJ had added wheel locks and mud guards, and maybe something else. We just told them to go ahead and take those off because we didn’t want to pay for them. It wasn’t worth the effort for them to do that, they just threw them in. Wheel locks on steel wheels with hubcaps, seriously?

          • 0 avatar
            Syke

            That sure says something about New Jersey.

          • 0 avatar
            JerseyRon

            Are you sure it was Paterson, NJ? Honda dealer I know of nearby is in neighboring Passaic (and new showroom in neighboring Clifton).

            In any case, seems most dealerships won’t fight you to pay for those add-ons if it risks losing the sale since they make so much profit on all the buyers who do pay for them.

      • 0 avatar
        joeaverage

        $500 for a $20 roll of pinstriping applied in 30 mins….

        Sure, its worth that. Where do I sign?

    • 0 avatar
      arach

      My dealer did that with the “paint protection”

      So we told them we’ll wait for the next one off the truck, and we said “Call us as soon as its coming in. We’ll buy it before you put the paint protection on”

      conveniently, they threw in the paint protection for free!

  • avatar
    LeMansteve

    Inflated prices give the seller the opportunity to put large sums of cash on the hood.

    People respond to discounts. Some people are so blinded by big, shiny discounts they totally lose sight of the total cost.

  • avatar
    dwford

    You act like you just discovered this trick. Every dealer on the nation does a variant of this. Even if it is just parking the cars on the lot at MRSP, while having a lower price advertised elsewhere. Yes, dealers prey on the uninformed. Those full price buyers do in fact subsidize the penny pinchers. So? Every retail establishment does this. You can go to the grocery store and pay full price, or you can bring coupons, etc with you. That’s how shopping works. Try buying something at Target. You can pay shelf price, or, you can shop the sales and buy multiples of certain items to get gift cards back. You can also use the Cartwheel app for additional discounts, and you can bring your own coupons. Is the person paying shelf price getting screwed by Target? Laziness and lack of education have costs.

    • 0 avatar
      S2k Chris

      “You act like you just discovered this trick. Every dealer on the nation does a variant of this. Even if it is just parking the cars on the lot at MRSP, while having a lower price advertised elsewhere. Yes, dealers prey on the uninformed.”

      In fairness, dealers have to show the car with the Munroney on it, which has the MSRP. It’s required by law.

      • 0 avatar
        dwford

        They also have the option of putting their sale price right next to it so it matches their online advertising, but they don’t. Because they hope to catch that uninformed buyer at full price. No different than the dealer in the article.

  • avatar
    PrincipalDan

    See, they install that TruCoat at the factory, there’s nothin’ we can do, but I’ll talk to my boss.

  • avatar
    bikegoesbaa

    I’m amazed that people do any negotiating at dealerships.

    If a dealer won’t give me an OTD price via email I’m not buying from them, period. Getting 3 or 4 of them to do that on the same car is a very effective way to drive the price down. It’s a reverse auction.

    I guess if you don’t know what car you want or are looking for something *very* uncommon and specific then you have to show up in person or deal with whoever has your unicorn in stock.

    But for stuff everybody has? Figure out which dealers will work online-only and start them on a race to the bottom.

    • 0 avatar
      dwford

      Of course. Why anyone goes to the dealership blind is beyond me. I go to the dealer to take delivery, that’s it. All negotiation is done via email and phone.

      If you don’t know what you want to buy, then yes you’re stuck going to the dealerships and test driving. But never sit there and just buy a car.

      • 0 avatar
        krhodes1

        You still need to go to the dealership for this and that. Test drive, see colors in person, that sort of thing.

        I usually do the negotiating via phone/e-mail after, but I went in, test drove, and bought my GTI in one swoop this year. I already had done my research on price, and they had the right car in stock. I did about $1000 better than I expected on the price, thank you Dieselgate. This was in FL where there was a remarkably stupid dealer fee on the sticker, but the discount was even more remarkably stupid so I didn’t care.

      • 0 avatar
        jh26036

        I’ve done both approaches. Making dealerships bid for each other, while you think you may get the best deal by going to the lowest bidder, it’s not always the absolute lowest price. Feel free to call me a scumbag, I was armed with the best number I thought I had from the dealership, went into the dealer anyways, got some random floor sales guy, gave him an even more aggressive offer and you know what, after some back and forth. I got an additional $1,000 less than the best internet price. I wanted to do a little more testing and asked to throw in rubber mats and I would sign right now. They refused. I told them, are you ready to see me walk out on this deal for $150? They said yes. I showed them my back for 5 steps, they caved and said, you got your $150. Can we close this out?

        This back and forth did cost me an extra 2 hours of my life. Will it work every time? But for $1,150…I will certainly try.

  • avatar
    nguyenvuminh

    Good info. Don’t be surprised that many out there don’t know about this. As for the GM saying a lot of immigrants fall for this, what can you say, those immigrants take all of our great jobs like picking melons in the field in 90 degree weather so we gotta get something back from them, right?

  • avatar
    NomNomChomsky

    Saw the most absurd ADM yesterday at a car parked at Costco, of all places. Fixed 2015 Volkswagen Passat TDI. $4995 “TDI Market Adjustment” and $250 mud flaps. Of course Volkswagen is putting $5k on the hood for these fixed 2015 TDIs. I’m not surprised that the dealer still has the car given the absurd markup. Never mind that even the ones at MSRP are sitting.

    • 0 avatar
      TMA1

      Dealers love grabbing the cash back that the manufacturers are offering. I was looking at a Focus ST a few years ago, at Z-plan pricing minus $3,000 in cash that Ford was offering. The dealer didn’t show me the invoice with the Z-plan price on it, just a scrap of paper with a number, and his assurance that the price was even lower than the Z-plan. Which it was, but only because he was keeping 2/3 of the cash back for himself.

      He also told me I shouldn’t bother driving a GTI, because it was the same thing as a Focus ST.

  • avatar
    TMA1

    I’m surprised you haven’t seen this kind of thing before. I’ve seen it at Honda, Hyundai, Nissan, and even Chevy dealers in suburban Maryland. Civics, Sonatas, Sentras, even freakin’ Sparks. And not even an electric Spark, I’m talking about a $3,000 ADM to a $14,000 sticker.

  • avatar
    arach

    I paid ADM on a 2010 camaro in 2009.

    I have zero regrets.

  • avatar
    deanst

    One dealer I bought a car from wanted $50 to gas up the car. I told him that $50 of gas wouldn’t even fit in the tank, and I would pay $10 for $10 worth of gas. I got charged the $10, and ended up with $40 worth of gas in a full tank. Communications at a dealership obviously aren’t the greatest.

  • avatar
    Sigivald

    I’m just irked because “ADJUSTED MARKET VALUE” and “LIMITED MARKET AVAILABILITY ” are not “EQUIPMENT OR SERVICES”.

    They’re “because we can”, which I know happens and don’t mind even being written out.

    Just, well… they’re neither a service nor equipment.

  • avatar
    pmirp1

    Another great article, you are on a roll Bark.
    I like going to auto trader or cars.com and find their best prices and get good deals. I never ever just go to dealer without checking internet. And if the dealer doesn’t agree to a price in email, I walk away. Always they email or text back and say if I am serious the sales manager will give me the veteran rebate and southeast rebate for first time buyers or some other nonsense like that and will therefore honor the price on auto trader. Also, its a good idea to wait for big holiday weekends like Labor Day when dealers have to meet numbers and will lower cost for a week or so(usually shown first on their own web site). That is how I got 5000 extra off my 2016 Admiral Blue Stingray. Also, if you find a price for a car locally, but not the exact color, most dealers will give you what you want by trading for your desired model plus a transportation fee (my 2014 pre catfish face Mustang GT deep impact Blue with premium black with blue stripe interior was shipped from Florida to Atlanta).

    One sad side note, no matter how smart one may be, if your financial house is not in order, and you talk monthly payments with dealer instead of price, then dealer got you exactly where they want you to be. I feel sad for those people but in life, keeping financial house in good order is lesson number 1.

  • avatar
    Johnster

    I personally know several well-to-do people (mostly senior citizens) who didn’t really need new cars, but who could have been persuade to buy if they didn’t have to deal with this kind of stuff. The dealers are really shooting themselves in the foot and they don’t seem to care about it. If you don’t absolutely need a brand new car, the one you already have should last a couple of hundred thousand miles.

    • 0 avatar
      JerseyRon

      Absolutely right.
      Though not a senior citizen or well-to-do, I could have bought a new car before now but with my 2004 Corolla doing well, why subject myself to the “joys” of the car shopping experience.

  • avatar
    JerseyRon

    In my recent car shopping, I came across quite a few dealerships with the additional price sticker which usually included pinstriping and window etching. It left a bad taste in my mouth. Even though I know I could get them to take it off, I couldn’t help but think of all the people they screwing doing this.

  • avatar
    RS

    Local 1 Price Ford dealer has an RS on the lot selling for $1450 below MSRP. They never did ADM on any of the RS they had – always selling at MSRP. The discounted pricing started a couple weeks ago.

  • avatar
    thelaine

    People who get ripped off deserve it, especially children, old people, immigrants, the feeble-minded, and the blind, crippled and crazy. Noble car dealers perform a public service by culling them.

    – Ruggles

    • 0 avatar
      healthy skeptic

      And direct sales by the OEMs will never ever work, not in a million years, but for some reason we still need laws around to prevent that from happening.

      – Ruggles

  • avatar
    JerseyRon

    I’m going to be replacing my 2004 Corolla with a 2017 Impreza 5-door. All the dealers I contacted came in at a similar price–at or a couple hundred below invoice. Considering the vehicle (as I wanted it) is in short supply, I don’t think I could do much better. Decided to do business with the dealership that does not play any of the window etching, paint protection, or pinstriping games. Their doc fee of $249 is reasonable compared the the $399 or higher others want.

  • avatar
    427Cobra

    My town has become a sea of “No-Haggle” AutoNation dealers. When shopping for a new truck last year, the local Ram dealer bragged about their huge sale & were offering $3000 off. I drove about 45 miles to get the same truck for $10.6k off, with very limited negotiation. If TrueCar is to be believed, I beat their pricing by almost $1000. I dealt exclusively with the internet manager. It was the smoothest, easiest transaction I’ve ever had. I was through F & I in under 15 minutes… no up-sell on paint protection or extended warranty… it was fabulous. I got financing below 2%. Could I have done better??? probably… but I was satisfied with the deal… and the truck. No complaints here.

  • avatar
    28-Cars-Later

    Mark – I just wanted to comment and say how much I enjoyed your few fiction pieces and I would certainly enjoy reading them again (even in quick post form as Crabspirits and I did in the past).

  • avatar
    matt3319

    A local VW dealer her in STL had a ADM sticker on every single VW in the lot. I asked why it has these on the cars? “Well, its for people who have negative equity. It helps them cover their neg equity!” Um right, maybe so. I asked him bluntly ” well, for me, its invoice, minus holdback, minus incentives and rebates.” He said “I guess we can”.

    I bet everyone who has put comments on here hasn’t fallen for any of those dealer tricks. Imagine all that do!!

  • avatar
    JerseyRon

    If manufacturers truly wanted to, couldn’t they use financial disincentives to discourage dealerships from playing these games? Or at least disqualify them from winning any awards bestowed by the manufacturer?

  • avatar
    Chris from Cali

    Hey!! Aren’t you Jack Baruth’s brother? Oh man, his articles are so great. :)


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