Financing

There are plenty of good, honest dealerships, with honest salespeople that make the purchase of a vehicle a no-hassle experience. The dealers we link to in "Where To Buy One" for our favorite cars have been carefully vetted. But even with the best dealerships, one of the problems dealerships have is low employee retention. New salespeople may be tempted to fleece customers since they may not be there the next time customers buy their next car, so always follow the guidelines below and let us know of any problems you have so we can either address it with the dealer or remove them from our site in the event there's no satisfactory resolution.

Whether financing or leasing a vehicle, make sure you get the real monthly payment. Unscrupulous salespeople or dealerships try to inflate your car payments, regardless of whether you buy or lease the vehicle, because they often make more on the vehicle financing and after-market add-ons than they do on the sale or lease of the car itself.

While they may make the price of the vehicle seem attractive, add-ons and junk fees will ultimately make your monthly payments significantly higher. Examples we've noticed thanks to our secret shoppers are jacked-up interest rates and market value adjustments, often just listed as "MVA" on the sticker label. Make sure you get the total cost of the vehicle AND the monthly payments, including a payment schedule over the entire term of the loan before you sign on the dotted line. And make sure you're aware of any end-of-lease balloon payments.

Beware of acronyms. Some unscrupulous dealers will use different acronyms for the same item and charge twice. Junk fees are also listed with acronyms like "DRP" (Dealer Retirement Plan) , "DDF" (Dealer Documentary Fee), "DIF" (Dealer Inspection Fee).

Don't apply for financing and don't give out your SSN until you've shopped around and know you have the best deal from the best dealer. Dealers sometimes "shotgun" your credit application to multiple lenders all at once to get the lowest interest rate - not necessarily for you, but for them. If you do that with multiple dealers while shopping around, it will not only negatively affect your credit score, but unscrupulous dealers often don't pass on the savings to you because the more the bank or finance company makes, the more they make.

Some shady finance managers will also condition credit terms, especially if you have spotty credit, by telling buyers that credit will only be approved if the vehicle has an add-on security or after-theft recovery system. That's not always the case, so check. Either way, those aren't bad things to have, providing they're effective. However, some anti-theft / after-theft recovery systems are of little to no use as some dealers may be tempted to use the lowest-cost alternative to maximize their profit.

Make sure to read the fine print on "Extended Warranty" Coverage. Many of these plans provide sub-par coverage which only takes effect after the vehicle's original warranty expires and are what are known to industry insiders as "Four-Corner Warranties", meaning that these warranties have so many disqualifying factors that by the time you drive around the block you probably did something to void the warranty if you ever have to make a claim.

FINANCING