Car Advice

How to avoid the new car dealer traps when buying a car

We know buying a new car from a dealer can be tough, that’s why we’ve come up with this handy guide to help you side-step the new car dealer traps.

WHEN IT COMES to buying a car from a dealer and their salesforce, well, you can’t be too prepared. See, while the Internet has changed everything from the way we research a new car, to the way we buy one (you can do it all now without ever leaving your home), many of us still prefer to buy from a car dealership. And for those people, well, we’ve come up with this guide to avoiding the car dealer traps.

The most important thing for buyers is that they go into the dealership knowing the make and model of vehicle they’d like to buy; this can all be worked out online by reading car reviews on sites like Practical Motoring, or even manufacturer websites to see, for instance, what colours the car comes in. You really don’t want to let the salesperson guide you towards a particular vehicle if it’s not the one you’ve already got in mind, because they might just be trying to get rid of slow-moving stock.

And it pays, in your research, to find out how long the vehicle you’re considering has been in production and whether it’s about to be superseded by a new model. Buying near the end of a vehicle’s lifecycle or, worse, just as it’s about to be superseded will immediately affect your future resale.

New car dealers absolutely want your business and they’ll do absolutely everything to get it. And that makes them, ahem, dangerous – figuratively speaking, anyway. That’s not to say that all new car dealers are rip-off merchants, because they’re not, but they will push and pull you to buy from them. Why? Well, because they’re under huge pressure to sell as many cars as possible for the most amount of money possible. And so they all have their tricks of the trade.

For instance, no dealer or salesperson will ever quote you the best price over the phone, they don’t want you shopping around and risk having another dealer out-do them by a few dollars. That means, if you’re in the dealership and the dealer offers you their best price, always get that written down; it’ll help you negotiate with other dealers on the same make and model of vehicle, but it will also mean the dealer can’t “forget” if you go back to them to continue the negotiation. It’s also worth mentioning that there’s no such thing as a fixed-price for a new car.

The manufacturer’s list price is often nothing more than a starting point with most new car dealers willing to negotiate if they can tell you’re serious. Yep, negotiating with a car dealer isn’t a one-sided affair. You, as the buyer, need to be open and honest with the car dealer; you should never be openly hostile. But, ahem, like a first date, don’t go too far too soon, for instance, say you’ve got a vehicle to trade-in, well, it pays to keep that information close to your chest.

That said, some dealers are hip to that tactic and will, often times, come straight out and ask you as their first question. Side step it if you can, but don’t lie. Once you’ve got the dealer’s ‘best price’ then you can reveal that you’ll want to trade-in your old car. And while it pays not to be cocky about your trade-in and what you want for it, you should have done your research on private-sale and trade-in prices for your particular vehicle to get a rough idea of what it’s worth.

But, remember, a car dealer will always pay less than market rates because they, in turn, have to make a profit on the vehicle when it’s sold. So, if you think you can get more money, sell your old car privately. If the make and model you like is available as a demonstrator it’s worth considering it, because a dealer can’t legally sell it as a new car. See, once a car is registered it’s technically second-hand, even if it’s only got 150km showing on the odometer; dealers will be more likely to negotiate on a demonstrator model and you’ll save quite a lot of money by buying nearly-new.

If you’re buying a new car off the lot then ask to see the vehicle’s build plate (which is usually on the firewall) because it will tell you when the vehicle was made. Meaning, even if the vehicle has, say, a compliance plate saying ‘February 2014’, the build plate might say it was built at the end of 2013. And that means, that vehicle, no matter what anyone says will always be considered a 2013 model, and not a 2014 model.

The compliance plate merely tells you when the vehicle was approved for sale in Australia. Before you sign on the dotted line make sure you take your prospective purchase for a test drive, and you can read more about how to test drive a car here. The key thing to remember is that you want to drive it on a variety of roads, not just around the block. And do be careful if a dealer suggests you take the car home for the night; while this will help you get a better feel for it, it will also most likely make you fall head-over-heels in love with it – I mean, it’s bound to be better than your old car.

Okay, so you’ve done all your research, negotiated with the dealer and test driven the car you’re interested in and now you’re ready to sign on the dotted line. Well, don’t. Not yet anyway. You want to go through all of the figures with the dealer, especially if they’re offering finance; they’ll be making a commission, see. So, in some cases, it might actually be worth talking to a private broker to see what they can offer.

Now, when you’re starting to talk money with the dealer they can be quite keen to push you to sign up, but as mentioned, take your time to do your homework on the best finance deal for your circumstances. The break in the negotiation can sometimes see dealers become pushy, saying the car will sell if you don’t buy it right now. Fine. You’re in control, remember. But, if you’ve got your heart set on it, ask them if they’ll take a 24-hour holding deposit to be refunded if you decide not to go ahead. Most dealers will say, yes.

When it does come time to sign on the dotted line, don’t, whatever else you do, say yes to any cost optional extras like rust-proofing, paint protection or window tinting. These will be ridiculously over-priced; some reports suggest as much as 500% more than high-street aftermarket accessories retailers. And make sure you’ve looked at the warranty too. Some dealers will offer you free extended warranty; make sure you read the small print because there might be stipulations, like the vehicle has to be serviced every six months at that dealership for the warranty to take effect.

The manufacturer’s standard warranty might state servicing the vehicle every 12 months or a set number of kilometres. And, then there are dealer delivery charges. These are one of motoringdom’s great smoke and mirror routines; they’re nothing but profit and usually involve nothing more labour intensive than giving your new car a wash and vacuum before you pick it.

Sure, some dealers might go to greater lengths, like parking it in a ‘reveal room’ and covering it with a sheet, but most won’t. So, make sure you negotiate. Buying a new car sounds like a lot of hard work but you shouldn’t be frightened by the process. After all, you’re spending a lot of money on a new car, so you want/need to make sure you get the best possible deal.

Just remember that when it comes to buying a new car you’re in control and can walk away whenever you choose. Good luck.


  • pleagh

    So what you are saying, Isaac, is:
    Pick a car to buy without sitting in it or even seeing it.
    Based on all your opinions on reviews of the paid media.
    Don’t buy the car even if you want and can afford it, because all dealers are trying to rip you off.
    Buy a demo even if you don’t know what it means or why it is cheaper.
    Don’t get any ‘add ons’.
    Use a broker, rather then the paid professional salesman/woman at the dealer.
    Waist the time of your local dealer for a test drive and a trade in price then don’t give them a chance to earn your business.
    It does not cost a dealer anything to get the car from the manufacture, get it shipped to there location, store the car somewhere, have insurance for not only the car but every joe blow that wants to drive it, send it to the work shop, clean it, do all the necessarily paperwork required for the car to be sold and registered and have the car financed.
    Dealers are not allowed to make money, and are expected to move heaven and earth to sell a single car.

    • Thanks Pleagh.
      Don’t misread me, I get that car dealers need to make some coin and have plenty of big costs associated with running their business. But, buying a car can be an intimidating process and customers shouldn’t feel pressured into buying anything just because they might “waste the time of your local dealer”. If you’re renovating a house you generally get three quotes for the work (and quite often ask for contact details of the builder’s last three jobs), why shouldn’t you do something similar when buying a car.

      • pleagh

        Yes, it can be intimidating, because people dont want to be ripped off. In the world of internet sales and reviews it is hard for a ‘shark’ salesperson to stay in a job. If a dealership has a bad reputation it will be online somewhere.
        Best thing to do is be honest with the salesperson and dont ask ‘whats your best price’. Simply say ‘what can I buy this car for?’
        Do you get 3 quotes when you go food shopping? Or when you buy a TV from JB, do you call 3 other JB HI FI’s?
        I understand a car is a higher price point, but you are buying a new car, they will all be the same. Yes you may pay a few $100 more, but you will save time. And isn’t your (and the dealers) time worth something?
        If you like the car enough to own it, the salesperson has done a good job and the price is acceptable, buy the car.

        • I get what you’re saying. No, you don’t get three quotes when buying food and building a house has more variables than buying a car. I like the “what can I buy this car for?’ line as it gives you a clear out without wasting time if the dealer can’t meet your budget. Cheers.

Isaac Bober

Isaac Bober

Isaac Bober was born in the shadow of Mount Panorama in Bathurst and, so, it was inevitable he’d fall into work as a motoring writer. He began his motoring career in 2000 reviewing commercial vehicles, before becoming editor of Caravan & Motorhome magazine. He then moved to MOTOR Magazine before going freelance and contributing to Overlander 4WD, 4×4 Australia, TopGear Australia, Men’s Health, Men’s Fitness, The Australian, CARSguide, and many more.