A former car dealer reveals what to look for when buying your next car.
Jase Patrick, who worked in a car dealership for 15 years, has provided insight into the often deceptive tactics salespeople use to leave customers with higher bills.
According to a recent survey, between 80 and 85 percent of new vehicles purchased by Americans in the past three years were financed, and as many as 40 percent of used vehicles were. Experian report.
It is therefore important for the former car salesman to make people aware of the methods used to increase monthly payments, even before they sign the papers.
“The price online is just to get people to the dealer, it has no effect on what they pay,” Patrick warned.
Former car dealer Jase Patrick helps shed light on the auto finance industry
About 85 percent of new vehicles purchased in the past three years were financed
Rushing to sign documents
Patrick warns car buyers of a trick to watch out for if they feel a salesperson is pressuring them to sign documents.
Patrick told American Prospect about a first-time car buyer, Mario from Corona, California, who was in a hurry and was told by a salesperson that he could not see the full agreement for his car loan.
“This is the ideal customer,” Jase told the publication, “this is what they want. [salespeople] training for.’
By forcing Mario into an unfair financing agreement, the 20-year-old nearly signed a deal that would have cost him more than $20,000 than necessary over the life of the loan, Patrick said.
Interest linked to guarantee
Patrick, who is now CFO, advises potential car buyers to beware of dealers who claim that the lower interest rate is linked to the purchase of a warranty product for the vehicle.
It’s actually illegal to tie a lower interest rate to a guarantee, Patrick told American Prospect.
However, many dealers still claim that this is the case to “inflate” the original price of the product sold, he explained.
Salespeople are looking for the ‘perfect customer’ to exploit for profit, Patrick warns
Unwanted add-ons
According to Patrick, it is important not to get carried away by finance and insurance people at car dealerships who add unnecessary products to the monthly payments.
In Mario’s case in California, Patrick said those sellers added $7,100 worth of extras, including a warranty, a “door guard,” nitrogen tires, two anti-theft systems and a guaranteed asset protection (GAP) policy.
The door security could be purchased for $10 on Amazon, but Mario would have to pay $695, Patrick said.
In addition, ‘nitrogen-filled tires’ often contain no more nitrogen than what is found in regular air, according to the FTC.
Multiple dealers advertising the same car
A quick and easy way to spot dealers who are trying to rip off their customers is to see if a car they are advertising is also being promoted by other dealers.
Patrick described these ads as a kind of fishing trip to find a customer to whom he can sell more, thereby increasing the dealer’s profit on the sale.
This is because it concerns a customer who wants a car but cannot pay the full amount and may therefore receive unfavorable financing terms.