Three Dealership Online Marketing Schemes You Are Falling For

The three dealership online marketing schemes almost every car buyer falls for!

I will expose the top three online dealership marketing schemes used to get your hard-earned money. If you are aware of these schemes, you are better equipped to make sure you get the best overall deal.

Let’s get started.

Dealership Online Marketing Scheme 1:

They advertise a price they have no intention of delivering on.

I see this all the time. Just like you, I use car search sites like Car Gurus, Auto Trader, etc and search for the vehicles my clients are interested in.

Enter the make, model, trim, color, miles and any other feature needed.

Then the trouble comes. You sort it by price.

Herein lies the problem.

The dealership sets the price they SHOW you. They know how you are searching or sorting (by price).

The price they SHOW you is not the entire picture.

Then, the website even says the vehicle you’ve found (at the top of the list) is a great deal. Right?

Well… maybe, or maybe not.

Chances are, the great deal advertised (much lower than everyone else) may not be giving you the entire picture.

Now look at this.

car offer

This quote, from a large online lead generation tool for dealerships, shows that this is a great deal.

The offer is $405 dollars below the average list price.

Keyword in that sentence is list price.

What is the $2,985 in dealer fees and accessories?

That eats up the $405 dollars quick, right?

It wasn’t easy for me to find this breakdown of their hidden fees.

You have to know where to look to find it. You have to actually reach out to the dealership in a lot of cases. Some dealerships do not disclose these fees anywhere online. If they do, they make it almost impossible to find them.

The average consumer only sees the price of $14,840 for the car and thinks it is a great deal.

They spend their time visiting the dealership and fall in love with the car. When the numbers are presented, the focus is set on the payment to hide the true cost of the car.

After spending hours there, your head spins circles, until you just agree.

Before we get into the #2 Scheme which quite possibly could be worse than the first, let me introduce myself.

I am Mike Rumple. I own and operate Your Car Buying Advocate, Inc. We teach the consumer the tips and tricks we use to get exceptional deals for our clients without having to step foot inside the dealership. For those that don’t like to do it on their own, they trust and hire us to do it all for them. We locate and negotiate a car deal for them, then we sell their trade in. They hire us to save time and assure them they’ll never have to worry about getting ripped off.

Dealership Online Marketing Scheme 2:

MAP Pricing (Minimum Advertised Price)

MAP pricing is a tool companies use to control what their retailers can promote in terms of price.

When you find a vehicle online, dealerships are all promoting the same price.

Tricky, huh?

The manufacturer does not allow the dealership to advertise the vehicle below their set MAP price.

That doesn’t mean you can’t get a far better price; it just means that the better price isn’t permitted to be advertised online. Again, sneaky, huh?

Let’s say you want a new BMW 230i X Drive. You go to Cars.com and you search for all of them within a 200-mile radius sorting by lowest price first.

Notice how the MSRP is the same as the selling price? That’s MAP pricing. They are advertising the price of the car with no discounts.

What’s that mean to you?

The only way you can tell what a good deal may be is to contact multiple dealerships to see what they are willing to actually sell the vehicle for.

You will see a tremendous difference in price from one dealership to the next.

The problem remains the same.

You go to the dealership and waste an entire day going back and forth only to end up with a purchase and still not knowing if you got a great deal or if you got ripped off. How could you know?

The problem lies in how you are going about the buying process. You are playing by the dealership rules. You are the one with the money so you CAN make the rules. I suggest never negotiating at the dealership. I think it’s a total waste of time.

You have to contact multiple dealerships to get the best deal. I know I say this a lot. But it’s TRUE!

This last scheme has been around for a long time. It is super tricky.

Dealership Online Marketing Scheme 3:

Offers for 0% financing are great!

I know what you’re thinking. Mike, how can you beat 0% financing? I am here to tell you I almost never recommend 0% financing to my customers. Here’s why.

When you choose 0% financing you almost always have to give something else up. It’s an EITHER/OR proposition.

In the fine print of these advertisements, are the details you MUST understand. Normally they read: We give you up to $4000 off OR 0%. Never $4000 off AND 0%.

To take the 0% financing you are losing the $4,000 in cash.

If you know enough to get it worked out both ways and the payment is lower by only a couple of dollars by taking the 0%, you are almost certainly better not to take the 0% financing.

Your balance on that loan will always be higher on the 0% option.

What happens when you trade in? The 0% option puts you farther upside down.

Just know that you have to run it both ways. Typically, what a dealership finance manager will do is quote you a higher rate than what you would qualify for on the $4000 cash rebate option to make the difference look more dramatic.

Therefore, you need to know what interest rate you can qualify for before you even get to this point. Now, if you have bad credit and you get 0% financing approved, then of course. I’d tell you to jump on it.

My advice is to never put money down on a 0% loan. You are defeating the purpose. If you have a trade-in, get the dealership to write you a check for the value of your trade in.

Putting money down on a 0% loan is foolish.

Financing is a really important part of the overall car deal. How you finance the vehicle matters. Don’t automatically assume you want to do 0% financing. Sometimes it makes sense, then other times it doesn’t.

As you can see, there’s no one size fits all to car buying, negotiating and financing. One thing you can count on is that you need to contact multiple dealerships for the complete deal and make them compete for your business.

2 thoughts on “Three Dealership Online Marketing Schemes You Are Falling For

  1. Hi Mike,
    What about when the 0% or 0.9% comes directly from the manufacturer? I have been shopping for a car and have walked out of dealerships twice because after we have agreed on a price they then try to raise the price after I insist on Manufacturer’s financing, which I qualify for because I have Tier 1 credit. They have claimed that I can’t take both the “rebate” or the 0% but in both cases there has been NO rebate advertised on the manufacturer’s website, neither on the dealer’s web site, neither the manufacturer says “0% offer cannot be combined with other incentives”. Neither the price quote breakdown said “this price includes a rebate, incentive etc”. Despite nothing saying anything about being either/or, one of the dealers insisted that I could only pay the quoted price if I use “conventional finance” vs the Toyota 0% 48 months APR. It feels that I am being penalized for having good credit. The most annoying thing is that in one case my husband test drove the car and got a quote. Told the salesman he had to talk to me before making a decision and came back home. Hours later the salesman called to follow up and he told him that I was NOT interested in buying unless I had Toyota financing at 0%. The salesmen said that would be ok and we agreed to meet later to finalize the purchase. As soon as we arrived, I discussed financing with the salesman. Then he went on about how they are not really making money on the deal if I do 0% (after he said on the phone that it was ok). After much talk, I finally agreed to 60 months 0.9%. We signed some papers, reviewed the quote, the credit application, etc. Then about 2 hours into the paperwork, the salesman comes out with the finance manager who tells us that he could not give me the price on the quote unless I used “conventional finance”. Or that I could do 0% or any of the other low APR offers from Toyota but he will have to raise the price of the car by $2,250. Why did he not say that on the phone? Or as soon as I arrived? At that point, I was upset. I had been at the dealership almost 2 hours and it was NO surprise to them that I only wanted to finance from the manufacturer. It was not something I kept a secret, I told them before I even left my house. So to pull this 2 hours into the deal just felt wrong. He suggested that I pay off in full to get the low price, (which my husband and had previously considered since we were putting 50% down). I just I did not feel like it, not after they made me waste 2 hours. If they had been completely honest about what the price included before I left my house I would have understood, but pretending to be ok with 0% finance at 48 months, then convince me to do 0.9% at 60 months after I stepped on the dealership (which I agreed to) then make sign a price quote knowing that I wanted only Toyota financing and then try to change the deal at the eleventh hour it was too much. So of course, I said thank you very much, I completely understand your dilemma you can keep your car. At this point, I don’t understand why Honda, Volkswagen, Hyundai offer these “low APR” offers if the dealers are not willing to honor them. In both occasions the finance managers appear to be upset at me because I’m planning on doing manufacturer’s financing. Buyers with Tier 1 credit are being penalized for using manufacturer’s financing. I understand that some manufacturers offer EITHER a cash incentive OR low APR offers, but in both of these cases the manufacturers did NOT have any advertised incentive or rebate that I was getting “in lieu of” the 0% financing. Why should I pay a higher price for a car only because I have good credit? And if I am writing a $25,000 personal check to pay a dealer right then and there, then I feel that I deserve an even bigger discount. It feels that dealers want unreliable buyers with bad credit. What ever happened to “cash is king”? At this point, I feel that I should be walking in at the dealership saying, I am a “cash buyer”, what is the lowest price I can get on this? Any suggestions?

  2. Ted,

    Thanks for the comment.

    Buying a vehicle is a very complicated transaction. This situation comes up quite frequently. Even if the manufacturer doesn’t list rebates it doesn’t mean they do not have incentives they give to dealerships to help them sell vehicles. The dealership gets to choose whether or not they give those incentives to you or if they keep them. The bottom line is you can not make the dealership sell the vehicle for any less than they are willing to sell it for. The real question now is which dealership has given you the best deal. I would buy that one as you are probably getting pretty close to the bottom.

    My advice in your situation would be to not take the special financing. Especially if you have a substantial down payment or could pay cash.

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