Cars

Here’s Why Online Car Prices Might Not Be a Good Deal

Car dealership

Visiting a dealership has always come with a few problems. So it’s no wonder then that many people look for car listings online. Internet shopping allows you to see what’s on a car lot before making a trip to the dealership. You might think it would also allow you to better compare prices; however, that’s not necessarily the case. As Jalopnik reported recently, car dealers these days employ some unexpectedly sneaky tactics to make online deals look better than they are.

How Online Pricing Works 

Rows of Toyota cars for sale at a dealership
| David McNew/Getty Images

When listing a vehicle, a dealership is competing with every other lot in its area as well as a few private owners. Dealers know you can easily compare prices among their competition and will go somewhere else if they do not measure up. To make a sale, the listing will have to be near or under what everyone else is posting-even if that means playing with numbers a bit.

When it comes to used cars, there’s also less room to negotiate than with a new car. Sales reps these days have very little wiggle room as compared to years past. Dealers these days expect people to compare prices online. As such, they more likely to list the lowest possible selling price. 

Just because dealers are listing lower prices does not mean they are happy with less profit. After all, they still have commissions and overhead to pay. Now that negotiations are becoming a thing of the past, car dealerships have to be creative in how they make money-particularly since they operate on very low margins to begin with. 

A common trick they use is to post a listing that is well below the market price, then tack on fees and surcharges. For example, a dealership may add certification, prep, or reconditioning fees that may range into the thousands of dollars. You might also find higher-than-usual documentation, tag, or title fees as well. The result is that your actual cost might actually be much higher than what you had anticipated.   

Getting the Best Deal 

Best time to sell your car
VW Audi salesman sells car. | Yavuz Arslan/ullstein bild via Getty Images

Just because car dealers are sometimes sneaky does not mean you cannot get a good deal. It just means you will have to be somewhat meticulous in your approach. For example, rather than asking about the car’s price, find out what your out-the-door cost will be. Insist on an itemized list so that you can go over each one to see what if any hidden fees might be included.

The price of your automobile might not be negotiable, but some items on the list could be. For example, a dealer may be willing to knock a certain amount off of a doc fee. In addition, you might not want things such as anti-theft protection, and may wish to avoid them completely. 

Don’t be afraid to ask what certain fees cover, particularly if they seem like unusual or “add-on” charges. You may just find that certain fees overlap one another. If that’s the case, you can try to get the sales manager to reduce those fees or perhaps even waive them.  

You should also be wary of other “add-ons” a sales rep might try to offer you during closing. Extras such as gap insurance, window etching, and extended warranties can greatly increase the price of your automobile, and should be considered very carefully before signing any contracts. Remember these products can often be purchased elsewhere for less money.

Getting the Best Deal Possible 

If you encounter a very low listing, you should always proceed with caution. Ask plenty of questions and read all paperwork carefully to ensure you do not get taken advantage of. Set spending limits for yourself and do not be afraid to take a firm approach with your salesperson. If you do these things, it’s less likely you will be taken in by deceptive pricing.