Undoubtedly, buying a car is one of the most challenging purchases you’ll ever endure (the key word here is “endure,” because it really can be a test of wills to buy a car). For many, purchasing a car, truck, or SUV is the second largest expense they’ll ever have, second only to buying a home. You’d think that spending such a large amount of money would be a happy and joyous occasion … The reality of buying a car couldn’t be further from that aspiration.
Buying a car is certainly a lot different than when I first started in the car business in the 1970’s. We’ve seen a lot of changes that are for the better (and quite a few that are for the worse), but no matter how you look at it, buying a vehicle is still one of the most frustrating things we have to do every few years. I sold cars for 43 years, and even I think the buying process is annoyingly aggravating.
That being said, there is a difference between getting annoyed, and getting taken advantage of, and my goal today is to help you avoid the latter. There are a few telltale signs of a shady car deal, and my hope is that you never experience any of them. That being said, there’s a strong likelihood that you will, and in an effort to help you protect yourself, I’ve written this guide.
Without further ado, let’s dive into the three signs you should walk away from a car deal.
The seller won’t show you a CarFax or reconditioning report
Regardless of if you’re purchasing from a private party or from a car dealership, if the seller of the vehicle won’t show you a CarFax report or the reconditioning repair work, that’s a sure sign that you should walk away from the car deal.
When car dealers buy used cars (either as trade-ins or from auction) they inspect them to make sure they are in good condition for sale. Typically this entails some “reconditioning” work. Reconditioning is the industry term used to describe the process of getting a vehicle “showroom ready”.
If a dealer won’t show you the repair order for the reconditioning work that’s a telling sign that you should walk away from the car deal. It begs the question “What is the dealer trying to hide?”
The same thing goes for when you buy from a private party. If they won’t share previous service records and an up to date CarFax, that’s a red flag and clear sign that you should walk away. Poorly maintained vehicles can be a seemingly endless money-pit, and you don’t want to be the one paying for a laundry list of future repairs simply because a seller didn’t maintain their car well or disclose to you issues it had that would be apparent on a CarFax.
This rule applies to purchasing vehicles from rental car companies as well. It’s well known throughout the automotive industry that the CarFax reports on rental cars can be lacking in detail. This is because CarFax collects information about every vehicle from their network of data providers. Rental car company owned repair shops are not a CarFax data provider, meaning CarFax is “in the dark” when it comes to a lot of the history of a rental car. That being said, it’s of the utmost importance that the rental car company shares with you the service records and reconditioning repair work done on a vehicle.
Another thing to recognize as a “red flag” is if the dealer adds an erroneous “reconditioning fee” to the selling price of the vehicle. The dealer’s cost to recondition the vehicle is already factored into the selling price, so an additional “reconditioning fee” is simply an attempt to make extra profit off of you. Again, this is a sign to walk away from the deal.
They won’t let you get a pre-purchase inspection
If the seller of the vehicle won’t let you get a pre-purchase inspection completed on the vehicle, this is a tell tale sign that you should walk away from the deal. Again, it begs the question “what is there to hide?”
Obviously if you are purchasing a new vehicle you will not get a pre-purchase inspection completed on a car, however for any used vehicle (even a certified pre-owned) you should consider a pre-purchase inspection, and if the dealer or seller won’t allow it, you should walk away.
Recognize that not every car dealership will allow you to drive a car to your mechanic’s shop to inspect the vehicle. This is different from them not allowing the inspection to take place at all.
Some dealerships have policies that restrict their willingness to move vehicles around to a mechanic’s shop for pre-purchase inspections. That being said, they should allow you to have the mechanic come on site, or be willing to take the vehicle to the mechanic’s shop if you put down a refundable deposit on the car. Some dealerships are nervous that if they take a car to a mechanic’s shop for a pre-purchase inspection they may miss a potential customer who is interested in buying the car while it is away.
During my 43 years in the business I never had an issue allowing a customer to get a pre-purchase inspection. I gladly endorsed it. Typically we would have one of our lot attendants drive the car to their mechanic’s shop to make it easier on the customer. If a dealer is unwilling to support your pre-purchase inspection desires, again, that is a sign to walk away.
They offer you different prices depending on if you finance with them or not.
This tactic, to offer two different prices that are dependent on you financing your vehicle with the dealership, is not only unethical, but counterproductive to being customer-centric. Advertising a price that requires a customer (you) to finance through the dealership so that the dealership can make extra profit is not illegal, but it’s certainly close to the line!
It’s well known that car dealerships make most of their money from the “back-end” of a car deal. This is where they sell insurance products (like an extended warranty), and originate loans. If the dealership where you are looking at buying a car wants to charge you more for the car if you have your own financing, to me, that’s a red flag.
This also applies to other insurance products (like extended warranties). Let’s say you’ve negotiated a price with your salesperson and you’re now in the F&I (finance and insurance) office. The F&I manager tells you that you can get an extra half of a point off of your interest rate on the loan if you buy their extended warranty. What do you do? You get up and walk away!
Tactics like these are simply signs of car dealerships that are looking to take advantage of their customers. Again, they’re not illegal, but they certainly toe the line.
Bonus fourth reason to walk away from the car deal: they charge ridiculous fees
Buying a car is the polar opposite of any other purchase we make. When you go to the grocery store and buy some cereal you pay the price of the cereal and sales tax, that’s it.
When you buy a car you pay for the price of the car, and then a laundry list of fees (some of which are legitimate, many of which are bogus). As a car buyer, how are you supposed to know what’s fair and legitimate, versus something that is purely dealer profit?
I’ve written about legitimate and illegitimate car dealer fees in the past, but it’s worth restating them here. Specifically stay away from dealers that try and charge you any of these fees:
- Nitrogen fees
- Reconditioning fees
- Additional destination fee
- Cash up-charge