Avoiding High-Pressure Sales Tactics by Auto Dealers

You head to the dealership in search of your next car. At first, the car salesman seems friendly. But then he starts pressing you to get expensive add-ons. Eventually, you reluctantly agree and sign the paperwork. Later, you wonder if the salesperson’s pushy tactics crossed a line. 

This article offers tips for handling car sellers’ high-pressure sales tactics at a dealership. It also explains when their methods might lead to legal issues like auto dealer fraud. But every case is different. After reading this article, please discuss any concerns with a dealer fraud attorney near you.

How Car Salespeople Get Paid 

Car dealerships make money on new car sales in two primary ways. On the front end, dealers add a 3%—5% markup to the car’s price. Dealers also sell their own back-end products. These items can be physical things like roof racks or contracts for amenities like roadside assistance.

Most car salespeople work on commission, though pay structures can vary among dealerships. Commission sellers earn a percentage, usually 20-30%, of the dealership’s profit on every sale. Most dealerships also offer their sales staff a 5% commission on back-end products.

For example, Mediocre Motors buys a new car for $28,000 and adds a 5% markup. Sally, the salesperson, sells the car to Bobby, the buyer, for $29,400. With a 25% commission on a profit of $1400, Sally makes $350. But if Sally also earns a 5% back-end commission and convinces Bobby to add $3000 worth of dealer add-ons, she raises her commission from $350 to $500.

Common High-Pressure Sales Tactics in Auto Sales

The commission sales structure gives car salespeople a powerful incentive to use high-pressure sales tactics. Here are some common methods: 

• Rushing you: The salesperson tells you that the price is only good for a limited time or that you must buy a car today.
• The four-square: The salesperson draws four squares on a piece of paper and puts a different number in each box. These are the purchase price, trade-in value, down payment, and monthly payment. However, each of these figures should be negotiated separately. 
• Focusing on the monthly payment: Most Americans must know their car’s monthly payment to budget appropriately. Car salespeople take advantage of this fact. They can leave the monthly payment untouched while extending the auto loan term of the auto loan or increasing the interest rate. But these changes significantly increase the car’s total price. 
• The bait-and-switch: You see a car ad and head to the dealership. But when you get there, the salesperson tells you that the car you want isn’t available, but a similar car is. The “similar” car has dealer upgrades that add thousands to the advertised price. 

How To Handle High-Pressure Auto Sales Tactics 

You can’t stop car salespeople from using high-pressure sales tactics. But you can limit the effectiveness of their strategies: 

• E-mail or call ahead to verify that the car you want is in stock at the advertised price. 
• Set aside a full day for your showroom visit. It’s harder for a salesperson to rush you if you have time to spare. 
• Negotiate the total price, monthly payments, financing, and value of your trade-in separately. 
• Be ready to leave. Let the sales staff know you’re willing to take your business elsewhere. 
• Focus on the total purchase price, not the monthly payment. 
• Don’t sign anything without reading every line.

Are High-Pressure Sales Tactics Illegal? 

They can be. Auto dealer fraud occurs when a salesperson knowingly misrepresents or conceals important information during the car-buying process. 

Most automotive sales tactics, like pushing add-ons, create pressure but don’t usually involve deceit. Other tactics may be fraudulent, depending on the circumstances. For example, a bait and switch might not be auto fraud if the dealer’s ad clearly states that a limited number of cars will be available at the listed price. But it could be fraud if the bait car was never available for sale. 

Some tactics are almost always fraudulent. One scheme, the yo-yo or spot delivery scam, works like this: The salesperson helps you complete financing paperwork and lets you take the car home. A few days later, the sales manager calls. They say your financing fell through, so you must sign new loan documents. The new loan terms are worse for you and better for the dealership. Other fraudulent schemes include: 

• Telling you that you must agree to optional dealer add-ons like extended warranties as a condition of sale 
• Representing a used car as a new vehicle
• Hiding relevant facts about the vehicle (e.g., accident or flood damage) 
• Rolling back the odometer 

Federal law and many state laws forbid salespeople from using abusive methods. Among other things, abusive tactics prevent car buyers from understanding essential contract terms. Abusive maneuvers include:

• Burying important information in fine print
• Physically preventing the buyer from seeing a crucial document (or key parts of a document) 
• Using pop-ups, multiple click-throughs, or drop-down boxes to hide information in digital contracts 

I Think I Was the Victim of Illegal Sales Tactics. What Can I Do? 

Contrary to popular belief, you generally don’t get three days to change your mind after a car purchase. So, canceling the sale usually isn’t an option. However, fraudulent or abusive tactics should be reported to the following:

• Better Business Bureau
• State attorney general
• Consumer Financial Protection Bureau
• Federal Trade Commission

If filing a complaint doesn’t help, you may need legal help. An experienced lawyer can help you understand your rights and build a strong case on your behalf. Find a dealer fraud attorney near you today.