You can do all the research in the world to find your dream ride, but there's more on the line than just the asking price. A few missteps at the dealership could total your credit score... and consumer rights.
For advice on avoiding a financial collision at the car shop (we promise, that's the last of the driving metaphors), look no further than Consumer Reports' ubiquitous auto issue. For 50 years, the publication has helped gearheads and grandmas alike find the perfect wheels -- from finned sedans to muscle cars to minivans to hybrid hot rods. (For non-subscribers, there's some great free advice on the watchdog's website.)
Here are a few all-too-common car-shopping traps that raise our eyebrows:
Credit score shenanigans. You've checked your pristine credit record and are ready to line up some sweet, low-interest financing. But when the dealer checks with the credit bureau, he reports that your score isn't good enough to qualify for the better financing deals.
Huh? It's illegal for a car dealer to lie about your credit score.
Tip: Go in knowing where you stand, in the eyes of the lending industry, and report a dealer who fabricates a false score to your state's attorney general's office.
Legitimate credit problems can arise if there are excessive inquiries into your credit rating. Too many hits can lower your credit score.
Tip: Tell salespeople you do not authorize them to run a credit check (they need your written consent to do so) -- especially if you have already arranged financing elsewhere, plan to pay cash, or are just going for a test drive.
Dud deals. Those $0 down, 0% interest, and zero payments for a year deals sure sound generous. But the fact is many dealers aren't that big-hearted when it comes to financing. You might be hit with all the monthly payments -- plus retroactive interest -- once the year is up, or be contractually forced to refinance the balance of the loan at a higher interest rate.
What about the dealer whose ad says "We'll Pay Off Your Loan!" Don't kiss your old car debt or lease goodbye just yet. More than likely, the dealer means he'll roll the amount owed on your old vehicle into your new loan.
Tip: Watch out for early-termination fees. And if you're in over your head -- meaning you owe more than your car is worth -- forget about arranging a trade-in.
Not-so-fine print. Thousands of dollars and years of driving pleasure are on the line -- and in the fine print. The finance manager may say the bank requires a "mandatory extended warranty."
Tip: In some states, that's illegal. Consumer Reports recommends against buying an extended warranty, unless the car has a reputation as a clunker. Also scour the bill of sale for "protection package" fees and "dealer prep" charges, which are usually unneeded. The manufacturer usually does rust-proofing and fabric protection, so no need to pay extra for redundant work.
And finally, don't buy from any dealer who requires you to sign a mandatory arbitration clause. Your John Hancock on that clause removes your right of redress, should a serious problem cut you off at a merge. (Sorry, couldn't resist one last driving metaphor.)