3 Car Salesman Tricks to Get You to Spend More


Few things cause consumers more anxiety than buying a new or used car. Besides your house, it’s probably one of the most expensive, if not the most expensive, purchases in your life right now.

car dealer

Vehicles are just getting more and more costly in the US. In 2019, the average sales price of a new car rose to over $37,000. Used car prices saw a similar uptick, jumping up to just over $20,000.

As car prices continue to climb, it’s more important than ever for car buyers to arm themselves with smart negotiation tactics before purchasing a new car. Whether you intend to pay cash or finance your vehicle, there are several ways to prepare yourself for the dealership.

We’ve uncovered three common, yet alarmingly effective, pressure tactics used by car salesmen to not only seal the deal but jack up the price as much as possible.

Don’t let yourself be taken advantage of when buying a new car. Find out what you can expect from car salesmen and how you can deflect their tactics to pay a fair, uninflated price.

1. Emotional Hijacking

Car salespeople use this tactic in several ways, and it all begins in the showroom. When you are ready to take a vehicle for a test drive, the car dealer’s first priority is to get you to want the car.

They do this by helping you get comfortable, adjusting all the settings for you, and helping you imagine driving that car in your everyday life. You’re likely to get excited because you recognize the potential benefits of having the car: better mileage, fewer trips to the mechanic, or even just looking great in your new ride.

As your adrenaline pumps, you become emotionally attached to a particular vehicle, putting you at an automatic disadvantage in negotiating the price. Why? Because you’re no longer relying solely on logic, such as what payments you can afford, or even what the car is worth.

Those pesky emotions have become involved and now you’re more likely to compromise on your initial target price. Determine your outcome of the situation in advance of showing up at the dealership and hold yourself to it.


Another way they attempt to manipulate your emotions during the car buying process is by using comparisons to make you think you’re getting a great deal.

They might do this by simply placing a price reduction sticker on the car when in reality, the “lower” price is actually the full price. Just because there is a special offer does not automatically mean it’s the best deal.


A similar tactic that car dealers might use is to claim that your desired car is the last one in stock. This changes your emotions from excitement to fear and anxiety thinking there’s a chance you might not get the exact model you’re looking for. Don’t fall for this trick.

Even if that particular location is out (although they probably aren’t), that doesn’t mean you can’t find the same car somewhere else. Remember to keep your emotions in check and don’t be afraid to leave and come back later if you’re worried about being pressured into a decision you’re not ready to make.

2. Price Diversions

Once you’ve indicated serious interest in a vehicle, it’s time to start talking price. This is where things can really start to get stressful.

If you plan on financing your vehicle rather than paying cash, you can expect the car dealers to try to steer your focus away from the actual price of the car. Instead, they will attempt to get you to focus on your monthly payment amount.

Selling on Payment Instead of Price

The idea is to make the sale price more digestible. You’re less likely to feel sticker shock from a monthly car payment of just a couple hundred dollars. Plus, if you do go back and forth on the numbers, the difference in payment amounts seem a lot less than the thousands of dollars on the price of the actual vehicle.

Let’s look at an example. If you’re buying a car listed at $30,000, but only want to pay $26,000, you can lose some serious cash if you move forward negotiating the monthly payment.

Here’s how: Assuming a 60-month loan and 3.25% interest rate, the true cost of a $26,000 loan is actually $28,205 and your payment would be $470.

The car salesperson might say he can come down from a $542 payment at the $30,000 price point to a $506 payment. That’s just $36 more each month than your target price. But the cost of making that deal is quite pricey.

A $28,000 car loan at those terms actually costs $30,374 which is a full $2,169 more than the true cost of your target price. That’s a lot of money, but it doesn’t seem like much when the car salesman negotiates just the monthly payment.

Of course, we haven’t even talked about your interest rate yet. When a car salesman offers you different options on your monthly payments, they might not even mention the proposed interest rate. You should ask for transparency around this loan term, and recognize that you can negotiate.

Shop Around First

It may help to shop around for car loans before heading to the dealership so that you can have extra leverage when considering in-house financing.

Check with banks, credit unions, or even online alternative lenders to see what kind of rates you qualify for. Then use this information to make sure the car dealership’s loan terms are in line with other lenders.

Another important point to note here is that your loan term can also be negotiated. There might not be much sense in getting a slightly lower interest rate if your repayment term is much longer because you’ll be paying interest longer.

Make sure you understand each of the individual variables that go into the total cost of your vehicle, not just the final sale price.

3. Pricey Add-ons

Even after you’ve finalized the price of the vehicle, there are still several pitfalls to watch out for at the car dealership. Either the car salesperson or the finance manager may try to convince you to tack on several products.

Two of the most popular are gap insurance and extended warranties. Because cars typically lose as much as 30% of their value in the first year after purchasing, your loan amount and the value of your car are two very different numbers.

Gap Insurance

This is especially true if you put little to no money down on your vehicle. Gap insurance helps to protect individuals in the case of a total loss of the vehicle, like a major accident or theft.

Your car insurance company only compensates you for the value of your vehicle, not the loan amount. So even if your original purchase price was $26,000 and you have $22,000 left on the loan, the car is likely only worth $18,200 by the end of the year. Gap insurance pays that $3,800 difference you still owe on the car loan.

The concept of gap insurance isn’t all bad. In fact, it can be helpful to many people who don’t have the money to pay much, or any, down payment. The problem comes in when purchasing gap insurance directly from the dealer.

Rolling It Into Your Car Payment

They might try to convince you to purchase it from them so they can easily roll it into your car payment. However, they will likely charge you more than if you went through your standard insurance company.

Some reports indicate that car dealerships charge as much as four times as much as traditional insurance companies, simply pocketing the difference for profit.

Shop around before making a decision. If the salesman tries to pressure you or bully you into choosing right then, simply decline. If they continue,find the sales manager and ask for a different salesperson, or simply just leave.

Know that there are plenty of other places where you can find gap insurance, and probably at much better rates.

Extended Warranties

Similarly, your car salesman will undoubtedly attempt to sell you an extended warranty along with your vehicle. Also known as a vehicle service contract, this agreement allows you to pay extra upfront in return for coverage of certain repairs performed on your vehicle.

You’ll have to talk to your salesman to find out exactly what type of warranty your vehicle will be eligible for to determine if it’s a good deal. However, it’s worth noting that research performed by Consumer Reports shows that the median price for a policy is $1,200, yet 55% of consumers don’t use their coverage at all.

The median savings on repairs only amounted to $837, which still doesn’t cover the cost of the typical warranty. Before you decide if a warranty is right for you, research specific plans and gauge your appetite for risk.

Otherwise, you might get flustered listening to horror stories at your car dealership and end up spending an extra grand on a service you hadn’t planned on buying.

Bottom Line

Now that you know what tactics to expect from salespeople before you go car shopping, you’re in a much better position to negotiate effectively. Remember to research comps before you go in and determine your highest offer ahead of time.

Decide what type of additional products you’re interested in and shop other competitors. And finally, don’t forget to consider all the loan terms associated with financing your next car purchase. Taking each of these steps may seem time-consuming, but you’ll likely save yourself hundreds, if not thousands of dollars in the process.

Lauren Ward
Meet the author

Lauren is a Crediful writer whose aim is to give readers the financial tools they need to reach their own goals in life. She has written on personal finance issues for over six years and holds a Bachelor's degree in Japanese from Georgetown University.