The Four-Wheeled Fine Print

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Offers on TV (and radio and in print) showcase the big numbers and best deals in very large type – with any stuff that might not be so appealing scrunched down into micro-sized print at the every bottom of the page. Or read-through at warp speed by an announcer who might as well be speaking Klingonese, as far as your ability to follow what he’s 1

Here are some things to be on the lookout for:

* “Offer only available in FLA, GA, SC… ”

Many incentives are regional – meaning, if you don’t live in one of the areas where the deal is good, the deal is not available to you. The same car might cost $1,500 less (or more) just by crossing the state line. This caveat is almost always read super-fast and sotto voce.

* “All estimates are computed on the basis of a 10 percent down payment…”deal 2

Some financing deals are contingent on things like the buyer coming up with a predetermined cash down payment. In other words, you might have to come up with “x” dollars in cash at the time of sale in order to take advantage of the advertised low-rate financing. If you don’t have the cash down payment, they may stick you with a higher finance rate – which will balloon your monthly payments. Same basic deal with lease offers. Many require a pretty substantial “acquisition fee” at time of lease inception in order to take advantage of the advertised monthly lease payment.

* “Offer not compatible with other offers…”

This means you may not be able to get both low-rate financing and cash back. You have to pick one – or the other. It’s important to run the numbers before you are in the pressure cooker of the dealer’s store so you’ll know ahead of time whether it makes more sense for you to go with, say, the lower-rate financing – or the cash back rebate.

* Dealer participation may affect savings… “

This means the offer’s contingent on the dealer’s “participation” in the program (rebate/cash back, special rate financing, etc.) being advertised by the automaker. Remember: Dealerships are franchises like McDonald’s or KFC. They may sell Fords or Hondas, etc. – but you are not dealing directly with Ford or Honda, the car company. Be sure the dealer you’re negotiating with is, in fact, participating in the rebate/cash back deal you saw on TV. He may not be. Don’t assume he 3

* “For Bonus Cash, buyer must take retail delivery by …”

As implied, the deal’s only good if you buy the car before a specific date. This can put pressure on the consumer to make a snap decision or purchase a car “off the lot” that may not have all the features and equipment (or be the color) the buyer really wanted, etc. If you end up with a car you don’t like, it’s a bad deal- no matter what it cost you.

* Estimates do not include the cost of transportation and handling charges, dealer prep, labor…”

This loophole is big enough to drive a Hummer H1 Alpha through. The price you thought you were getting could very well turn out to be nothing like the price you actually end up getting. Insist that every charge/fee associated with the proposed purchase be clearly spelled out, in writing, before you commit to buy. “Dealer prep” alone can add hundreds to the bottom line – negating any savings you may have expected via the “cash back” lure that got you into the showroom.

* “Not all buyers will qualify…”deal 5

Surprise, surprise. Most finance offers have this little caveat lurking somewhere in the fine print. If you are a young/first-time buyer – or have less than exemplary credit – that low finance rate touted in the ad may be unavailable to you. It’s a good idea to check alternate sources for financing – such as a bank or credit union – just in case the deal being offered by the automaker’s finance arm (GMAC, etc.) won’t be extended to you.

* Residency and other mileage restrictions may apply…”

This means the offer might be contingent not just on where you happen to live – but also on how many miles you drive annually (lease contract). It doesn’t do you much good to get a great deal on a lease if your annual mileage exceeds the maximum allowable – at which point you could get whacked with additional charges. It’s always best to over-estimate your annual mileage when it comes to lease contracts.

* “Free” maintenance …

Like “kids eat free,” there’s no such thing. You just pay another way. Typically, you pay more for the car. But the dealer makes you feel better about it by “throwing in” free oil changes for the first couple of years. Which costs him almost nothing – but can end up costing you a 7

* Take delivery from available dealer inventory – 

This one’s easy to miss because it seems innocuous. But then you get to the dealership and find out he’s only got three of the model you’re interested in – all of them high-trim models and loaded with options you don’t want – or stripped, without the equipment you do want. Ordinarily, you can order the exact car you want – equipped the way you want it. But if the offer (for the deal advertised) is contingent on taking delivery from available dealer inventory, that means you have to take what he’s got – or forget the deal.

* “Vehicle shown may contain optional equipment available at additional cost…”

In other words, what you see (in the ad) may not be what you get (at the dealer). Be sure the car you want – with the equipment and options you want – is in fact available under the terms of the offer. A great deal on a car you don’t want – or which hasn’t got the equipment/features you need – isn’t much of a 4

* “Bonus cash offered on eligible vehicles must be financed or leased through (the automaker’s captive finance arm)… “

This means that in order to get the offered cash back/rebate, you must finance the vehicle through the automaker’s captive finance company (Ford Credit, GMAC, etc.) rather than a credit union or private bank – which could be a net money loser for you. You may also not be able to get the cash back if you pay cash for the vehicle. Basically, the automaker is looking to recoup the “cash back” by making money from you via interest payments.

Throw it in the Woods?


  1. Hoping I live to see the day when dealers go the way of the Dodo. In the Internet age you should be able to go to a manufacturers website and order the EXACT model, color and options YOU want; not some bullshit package they try to stuff on you. This should also cost thousands less, since your not paying for the bloated dealer network.
    I have no opinion on the viability of Tesla motors, but I give them credit for trying to go direct sales to the customer. In my state (MA) and a few others I read about there are actually laws prohibiting sales without involving a dealership. Wonder how much it cost the dealers to bribe all the state reps back in the day. Tesla is fighting this in court, but I’m sure the dealers have paid of the guys in black dresses all along as well.

  2. Nearest I could figure on the document fee that the dealer charged my friend was that it covered the title, registration, and tags. They send a clerk to the county vehicle office who stands in line registers the vehicle, gets your tags and title. Total cost to them the $6.00 per hour that they paid the clerk – the fees were already charged earlier. Oh, when they do this you get to wait an extra week because they do it on their schedule.

  3. The latest scam going for the new car market is the ‘internet price.’ The price includes 1 or more incentives that most people won’t qualify for, including military and college grad discount. Before wasting your time and driving out to a dealership, be sure to ask how many and what dollar amount of incentives are being applied to that price. Ask them for the processing fee and the delivery charge, because they’re going to add that on as well. Tax and title you can figure out for yourself based on state, that has to be paid to the state so you’re not getting out of it.

    As far as buying a used car, I cannot recommend this approach. Supply is low and prices are high at the dealers. If you can get a used car privately, that will be the only way you’re going to be saving money in the long run, save luxury vehicles are vehicles that have the highest trim level, as they don’t hold value. If you’re buying in the lower end and base model vehicles, you can generally snag a better deal in the new market, IMO.

  4. In 1995, I tried to lease a Teal Metallic Ford Contour SE with a manual transmission. The dealer calculated a monthly payment and we signed a contract, but the dealer ordered it from the factory because he had no manuals in that color on the lot,

    When the car came in a month later, the salesgal said, “Here’s your new contract and my, isn’t that a low monthly payment?”

    I said, “Like hell, it is. It’s double what we agreed to! Where’s my original contract?”

    She replied, ‘Well, the incentives expired before the car could be delivered.”

    I told her that she could’ve called me if she knew the incentives were expiring, so I could chose one that was in stock. The color wasn’t that important.

    Well, we negotiated a price somewhere in the middle. I wondered how the dealer could do it, since the car was leased under the Z plan. It turned out that the dealer jacked up the residual price to lower the payments, which meant that purchasing it at the end of the lease was out of the question.

  5. There is a simple way to buy a new car, if that is what you want. Go to dealers and drive and investigate cars until you figure out what you want with what options. Tell the sales person that you are not sure which car you want yet, and what is the next car you are about to go try, so you can make an easy exit. Then get online and email all dealers with make of car you want, and ask what is best “out the door” total price deal they will give you. Once you get a real offer email it to all the other dealers and ask how much better a deal they will give you. You will get the normal BS about “I’ll beat any offer you get by $200”, or “come on in and we will talk”, but you will find 2 or 3 dealers that are hungry and try to give you a super deal. You can keep doing iterations of emails, and eventually you will find that dealers will get to the point where they say “I cannot beat it, but I will match it.” Once you have gotten there you know you have gotten the best deal possible.

  6. It’s easier to just assume that everything you hear on a car sales commercial is bullshit….because it generally is.
    Until you are holding a piece of paper with a proposed price that they will sell the car to you, you have nothing at all.
    And even then the finance guy will try to add stuff after you have an agreement.

    • Because I don’t have a HD TV, I can’t read the disclaimers at the end of the commercials, not that I could read that many words in five seconds anyway.

  7. Eric,
    Great advice. I own a 2005 Mercury Grand Marquis that is in very nice condition and only has 60,000 mile on it. I have been swamped with offers from every car dealer in town since I registered the vehicle last September. I just moved back to Florida so it is obvious to me that Florida Vehicle Registration Offices mail out all new vehicle registrations to all the car dealers. Yeah I know it’s legal in Florida but the practice is sick. Anyway these slick glossy offers have claimed that they want my 2005 Mercury so bad and I have gotten offers for up to $10,400.00 for this car. A quick check with both Kelly Blue Book and NADA indicates that these so called offers exceed not only trade-in values but also high retail values in some cases. So I says to myself, Self – run like hell. I didn’t bother to read the fine print but it doesn’t take a rocket scientist to know that these guys are in business to make money and if they offer you $1,000.00 more than you car is worth as a trade-in they are going to charge you $2,000.00 more than what your buying is worth. As you mentioned – those add on charges can kill you. An older woman that I have known for years bought a new car for her retirement last summer – she was so pleased at how nice they treated her until she started looking at the difference between what she thought that she paid and what she actually ended up paying – they actually charged her $450.00 for paperwork. Thes guys are almost as crooked as congress critters.

    • At a dealer, there’s prep cost. What is that? The guy they’re paying $6/hr. as an independent contractor gives it a quick rinse and dry. Then there’s the “undercoating”, yep still doing that too. Then there are “administrative fees”. They can think up plenty of them that will have you paying well of $1,000 above what you thought you gave for the car.

    • And what is the deal with the “documentation fee”? When I bought my most recent used car, the salesman admitted that the dealership charged $495 to pad its profit. At which point, I suggested that we forego the doc fee, conduct the transaction on a handshake, and not do any paperwork. Then my wife and I stood up and headed for the showroom door. The salesman and the manager chased us to the door, then knocked $1000 off the price I verbally agreed to pay.
      Like Eric, we went into the dealership with a list of what we were looking for, what mileage/condition we wanted, and we firm on what we would pay.

      • It works because it sounds “official.” And people are conditioned to expect – and defer to – anything “official.”

        “Documentation fee”? Why, that must be necessary, something the state requires….

        Feed ’em fish heads!

        • I’ve had the same thing. The only time I’ve ever bought a new car from the dealer, I told the sales guy the price I was willing to pay, told him I had financing and told him what I would accept for our trade in. I told him he had 30 minutes or I was out the door and over to the next Honda dealer 20 miles away. Motivation for them to sell a car almost always wins out.

  8. Another good one is leases that require $3000 or more put down on them to get the good monthly rate. With a lease, you don’t get that money back — they keep it, even after you return the car.

    Oh, and who other than retirees, drives less than 10,000 miles a year? No one does.

    • Hi Chip,


      Those lease contracts are full of cheesiness. Other than businesses, I have never understood the appeal of leasing cars. Yeah, you get to drive a new(er) car all the time. But you never own it – and you pay through the nose for it.

      • If a dealer could lease enough vehicles they’d never care if they sold another one outright. When my sister told me my nephew had leased a pickup to work, I nearly shit. I told her it would have to be perfect turning it back in or it would cost literally thousands for their services in returning it to like new. He found out too. He got screwed so hard he ended up buying it so he’d have something to show for the outlay. He shoulda called his old uncle.

      • Eric and Chip, I’m with you. I have worked the numbers on a lease many times, particularly when I could deduct my payment thru my business. Even then, with the upfront cash requirement, I could never get the numbers to work in my favor. And I’m pretty good at haggling—leave everyone with their dignity and a reasonable profit!
        Now that I’m semi-retired, and can no longer write off my car expenses, NFW will I ever consider leasing.

  9. What the big print giveth away, the small print taketh away.

    Good points to keep in mind Eric.

    The haggling on price/options can be annoying since I do not want to be a sucker and pay more than needed. If you are good at haggling, then you can find a good deal on a car, otherwise you will pay too much.

    It has become easier to haggle with the use of the internet.

    • Haggling now that is a hobby I never really enjoyed. I’m curious do people actually like haggling? But still some people are really good at it.

      Side note I’m not sure why anyone would want to do a lease if you aren’t a business? I remember in finance some time back the idea of a lease in business being a good thing because it helps cash flow. Something like a lease is when you both buy and sell a vehicle upon purchase. Of course you not only get shafted by the professional salesman on purchase price like usual but you then get shafted on in used value which is always underestimated. So you are paying for the highest depreciation rate only. But so in finance this still may make sense if your companies IRR (internal rate of return) is something like 20% as then it would be better to only pay a partial amount of the upfront value for the same usage of a new car instead of its full price and reinvest the remaining back in the company. On top of that you supposedly get to write off the highest depreciation directly against the taxes.

      When one considers though this is exactly why so many good companies fall out in the business or should I say credit cycle fostered by the Fed Reserve. The system promises easy money and encourages a businessman to go out and leverage a debt and take what seems a logical loss against say taxes. But the IRR is often mistated by false periods of money printing. And when the money stimulus of cheap credit is removed the companies find themselves buried in bad business deals as maybe their real IRR goes to 2%, less, or even negative. I think myself and many others on here realize that to be a long term successful businessman the idea is to take the least amount of debt and even pass up what might seem like a good deal finance wise in taxes based on projections of growth. Always be able to roll up production in the bad times with the least amount of overhead even if it sounds like a real good deal in great times.

      As far as leasing goes does such an idea even have merit for individuals not in business for themselves? I don’t think so. And I’d really say that usually car salesman are the better negotiators at haggling in my opinion.

      Hot Rod

      • HotRod, haggling with a good haggler is a pleasant experience. All to often you have to deal with people that don’t realize everything is negotiable….everything. I have found our better halves don’t quite get haggling although growing up, some of the women I knew could Jew you out of a tree. That’s high praise. And I’m not like Insain McCain, no brown nose for me thank you.

  10. One other caveat I’ve encountered, with used cars, is a very easy to miss statement: price assumes $1000 down payment. In other words, the price is $1000 more than advertised. When I pointed this out the the dealer his statement was “our lawyer has determined this is perfectly legal”. I said: so, even though you are lying about the price in big letters, the lawyer says its “legal” and you’re ok with that? Just checking, thanks!

  11. This is one major reason to avoid buying a new car in the first place. It is not worth that hassle period. If you are going to buy a car, buy it from a place like Car Max where the transaction is simple. You get a nearly new car at a substantial discount over a brand new model and there is very little in the way of fine print. What you see is what you get with pre owned vehicle.

    This fine print BS would have been eradicated long ago had it not been for easy credit, dumb customers and arrogant dealerships.

    There are so many potential pitfalls in buying a new car that I am surprised anyone does it anymore. New car transaction prices have skyrocketed since 2009. I read somewhere that the average price is somewhere north of $30k. Unbelievable.

    • That’s my philosophy, too.

      When I need to buy a vehicle, here’s my process:

      Determine what I want – and how much it will cost. Specifically, the maximum I will pay.

      Take the sum out of my bank account, so I have cash in hand.

      Start looking for vehicle via classified ads and so on.

      When I find one that meets my criteria (e.g., 2000-2004 Frontier w/manual transmission, 4 cylinder engine and AC; miles under “x”) I make the owner a cash offer. I always make a reasonable offer – never preposterously low, as I believe that will only serve to antagonize the seller and may screw the deal. So far, every single time the seller has accepted – or accepted after making a reasonable counter-offer that I accept.

      I hand the seller cash; he hands me keys and signed title.

      I’m done.

      • “Take the sum out of my bank account, so I have cash in hand.”
        Just don’t get stopped by a phero w/that cash, or he will perform an ‘asset forfeiture.’

    • It’s the better option Swamprat. Instead of buying new get one a year or 2 old. Most of the hassles are over, even possibly any gremlins in the car might have been sorted by then, but that requires checking as to why someone would get a new car then sell it a year or 2 later.

      I prefer to stick to older cars anyway. My current NX Pulsar is all I need. If I ever get another one, it’ll be a Nissan 300ZX turbo.

      If I ever buy new, it’ll be an Audi R8 😉

      • To see what gremlins (if any) were fixed, get the Carfax report. As for why someone would keep a car for only a year or two, maybe they decided they didn’t like that type of car after all. Or they bought a compact, then the wife turned up pregnant a few months later, so now they need something bigger.

        • It’s a possibility strder, but often they come from fleet buyers that want to trade in while the thing still has low miles.

          I’m not sure Carfax would be able to report on anything that wasn’t entered in their database, especially with private sales. It’s always worth a look.

        • Carfax isn’t infallible (as Rev notes) but I agree that it’s a good resource. So long as that’s not the only resource you go by. In addition, the car should be closely inspected by someone competent to do so – either yourself or a mechanic you trust. If all seems Kosher, then proceed!

        • My wife and I were looking for a new(used) pickup when a salesman asked if we hadn’t rather have a Bronco. This was in the 80’s when they were large and this new black one they had with every option I guess Ford could put on one had 280 miles on it, still had the little tire titties. A guy bought it for his wife for Xmas. She drove it around for a couple days and then said she wanted a car so they traded it on a big Olds Toronado. I’ve found vehicles with 2-3,000 miles. People wanted them and then didn’t after driving them a while.

          • A cow-orker a few years ago shows up to work with a new BMW 1 series. Then a couple weeks later a new Mercedes. He decided he didn’t like the BMW and traded it in for a much more expensive Mercedes. Must have been investments or the money his wife made… our employer doesn’t pay enough to afford that sort of car…. the 1 series sure just save up for it. the MB no. Not even the executives drive cars that high-faluten.

    • The used car business is full of it’s own marketing methods, fine print, up charges, etc from dealers.

      To avoid those one has to do a private sale which has its own pitfalls.

      • Yep, and it doesn’t even have to be Car Max, individuals will put a good shine of tinted wax on a car and you’ll only find it has “no paint left” after a few weeks. If I had the slightest doubt now, I’d sand it in an area and rewax it to see what the paint really looks like. It doesn’t take long and when that tinted wax is off, that’s a good time to take it back to the seller and let him figure out what he wants to do at that point. He’ll know, give your money back, rewax it and sell it to someone else….or he can talk to my little friend.


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