Buy a Car First, Then Pay More Later?

Automobile Showroom

What to do when dealers demand a higher price days after you buy a car: Internet Scambusters #850

Unless you’re a born haggler, you probably don’t look forward to negotiations when you buy a car.

The experience can turn out to be even worse if the dealer later tries to get you to pay more or plays another trick on you.

In this week’s issue, we’ll explain how these tactics work and what you can do to avoid getting caught out.

Let’s get started…

Buy a Car First, Then Pay More Later?

Supposing you buy a car for a bargain price, then the dealer calls you the next day to say the price was a mistake and you now have to make up the difference.

Remarkably, this really happens. And not just now and then.

Then you realize they didn’t hand over the second set of keys and they’re sort of holding them hostage until you pay the new price.

In other cases, dealers have been known to hang on to the DMV license tag until the buyer pays an additional sum, sometimes running into a four-figure amount.

Of course, it’s also possible that the sales rep actually made a mistake when writing up the sale.

So, what would you do?

The first thing to say is that you probably should take legal advice. We don’t provide such advice here at Scambusters, so what follows is for information only.

The subject came up recently on the question-and-answer website and the common view is that, in most cases, since you — and they — signed a contract for the purchase, the car is yours.

However, that could also depend on the wording of the contract. For example, the contract might say the deal is subject to approval from a finance company. If that’s the case, the dealer could claim they couldn’t arrange financing at the promised rate and that you will need to negotiate this again.

(Car dealers usually receive a commission from the finance company. The higher the interest rate they can sting you for, the more commission they earn.)

If this isn’t a condition and the contract is watertight, the car should be yours. The dealer likely would be unable to sue.

If they’re holding your keys, you should simply ask them to hand them over and, according to one expert on Quora, if they refuse, you should call the police.

On the other hand, if there was a genuine mistake, it’s down to your conscience over whether you want to pay the difference. In one example, for instance, the sales rep mistakenly charged for manual transmission when the car was an automatic.

So, if you’re in the market for a new car, remember these points:

  • Check with friends, neighbors and relatives, as well as online, to establish the reputation of the dealer. If it’s bad, don’t even go there.
  • Don’t sign a contract that says the deal is subject to finance being arranged.
  • Make sure the VIN number of the car is the same as the one in the contract so the dealer can’t claim they sold you the wrong vehicle.
  • Don’t give way to high-pressure tactics and tantrums if you’re sure of your legal position.
  • And if the relationship with the dealer turns sour, don’t take you vehicle there for maintenance and repairs!

More Tricks

Meanwhile, in researching this, the Scambusters team also encountered a number of other car dealership tricks to be on the lookout for.

First, if you show interest in a vehicle and take one for a drive, you may return to find the sticker price has changed. Or you may even find the existing sticker already lists a price higher than you thought it should be.

Some dealers (and one of the Scambusters team has direct experience of this) use a sticker that’s called something like “adjusted market value.” It can add significantly to the manufacturer’s suggested retail price (MSRP) but has no legal standing.

But nor is it illegal — just a nasty trick.

If you spot it (as our man did), the sticker or the rep will likely say it has something to do with the way the car holds value compared with others.

The real reason is to set a higher starting price for negotiations. The buyer thinks they struck a great deal by pushing the price down by a thousand or two but they end up paying the MSRP or higher.

A second, even more disreputable trick is to effectively hold your drivers’ license hostage. This can happen with used car dealers too.

The rep asks to see your license so you can take a test drive, then “forgets” to return it to you. And if you forget as well, you’ll have difficulty getting it back without making another visit to the dealership.

Even if you do remember while you’re there, the rep may make excuses to delay returning it to you — for instance saying he just has to go and check something with his boss — forcing you to hang around the dealership.

An investigative reporter who faced this jumped into the bed of a truck at the dealership and shouted about his experience to everyone who came in. He got his license back pretty sharply.

It’s unfortunate that buying a car can be fraught with these kinds of tricks. It can turn the buying experience into a nightmare. And it underscores the value of using no-hassle buyers’ programs offered by organizations like AARP, AAA, credit card companies, and some retailers.

For more on these programs, see Car-Buying Services: Skip the Dealership Stress.

Alert of the Week

Watch out for calls claiming to come from your cable of satellite TV provider saying they need to inspect your installation or replace certain equipment.

This may be just a ruse to get inside your home — as has happened recently with subscribers to the Dish satellite service.

If you get a call like this, ask the caller to give your account number. A scammer likely won’t know.

Regardless of this, decline the offer, saying you’ll confirm it with the provider first. Then look up their number independently and check it out.

Time to close today, but we’ll be back next week with another issue. See you then!