0:00
/
0:00
How to spot an illegal, unethical and deceptive price ad on a dealer website (because most of them are)
How to spot an illegal, unethical and deceptive price ad on a dealer website (because most of them are)
0:00
0:00
0:00
0:00
About this episode
Navigating car dealership pricing can be tricky, especially with deceptive ads that feature misleading rebates and discounts. Lenny shares insider knowledge on how to identify unethical pricing practices, emphasizing the importance of understanding the true costs behind advertised prices. He discusses the legalities of dealer rebates, the significance of MSRP, and the tactics dealers use to manipulate financing terms. This episode is packed with practical advice for consumers to ensure they don't overpay when buying a vehicle.
Topics:
dealer pricing tactics
misleading ads
rebates and discounts
MSRP importance
financing terms
negotiation strategies
consumer protection
state regulations
Email Lennie at [email protected]
Filter:
|
Technical
Too Afraid to Ask
Car
Ford F150
"I mean, I could actually run an ad. Even today, I could run an ad saying you can buy a new F-150 for $9 a month. And in the disclaimer, I could say requires $47,000 down payment."
Car
Toyota Corolla
"...watching a TV spot and it says we'll get a Toyota Corolla for $199 a month, you really can't because that d..."
Select text to request an explanation
Hey folks, welcome back to another edition of My Car Guru where you learn everything from
an insider's perspective, a real-life new car dealer with a twist.
I tell it like it is, unlike one of my competitors who has decided to, you know, they always
played it pretty straight.
I was always very respectful of this competitor until I saw the recent online ads where they
add these mysterious rebates that are, I don't know, interestingly defined.
All people don't qualify for them, so you're not actually supposed to use these fake rebates
as a discount when you're coming up with an ultimate price for a car online.
I mean, okay, so you go to a website and you see a price and it says final price or
it says our best price or it may say call for best price and just have the MSRP.
That's why I'm saying shopping online can be very frustrating.
Basically all it's good for is to find a vehicle.
That's it.
When it comes to pricing the vehicle, you cannot trust or have a great degree of confidence
that that is the final price that you're going to have to pay for a vehicle.
That's merely a suggestion in most cases.
Well, Lenny, are your prices the final price?
Well, we include everything in the price, including rebates that everybody qualifies for.
If you, let's say that you weren't in the military, should I deduct that from the price
and say that's the final price?
No.
That's deceptive.
What if I say, well, if you have a trade, we'll pay you an extra thousand dollars
in rebate.
Wait a minute.
Rebates by definition come from the manufacturer, not from the dealer.
I don't know what your state laws say, but in the state of Tennessee, there's no such
thing as a dealer rebate.
It's a price adjustment.
It's a discount.
And if everybody doesn't qualify for it, you can't deduct it from the price and
say that is your advertised price against the law, against the rules of the Motor
Vehicle Commission.
Now, what's the problem with that?
Well, they don't enforce them.
There's no, I mean, there is some enforcement mechanism out there, but it's just not equally
applied.
It's not like there are pricing cops running around looking at all dealer ads.
It used to be that way.
One time I got fined, and this was probably 35, maybe 40 years ago, I got fined for
an ad that I ran in the Kingsport Times News because it didn't have two stock numbers on
it.
I mean, I probably advertised 30 vehicles in that one ad.
It was a full-page ad.
Well, more than that, because they had a used car section as well, but I accidentally
left off two stock numbers.
Back then, they had some aggressive enforcement, but it was easier because all they had to
do is get copies of the regional newspapers and review them.
We had to submit TV scripts and radio scripts, and so all of them had to be certified, and
if an agent came into our dealership, we had to share them with them.
And if they weren't right, if they didn't have the right disclosures with stock numbers
and the terms, like, for example, if you're advertising price or payment, especially,
if you're advertising payment, you got to have the terms, how many months, how
much down payment is required to get to this monthly payment.
I mean, I could actually run an ad.
Even today, I could run an ad saying you can buy a new F-150 for $9 a month.
And in the disclaimer, I could say requires $47,000 down payment.
That is legal.
It shouldn't be, but it is.
Now, most dealers, when they're quoting payments these days, especially Honda
dealers, Toyota dealers, BMW dealers and stuff like that, they're always quoting leases
because a smaller down payment will have a larger impact on a lease.
Basically, when you pay a down payment on a lease, it's not, I really shouldn't
refer to it as a down payment.
Basically what you're doing is prepaying payments.
You're reducing the capitalized cost.
The amount that the lease is based on, basically.
And so if the lease was originally 36 month lease based on a $36,000 capitalized
cost and you pay $10,000 down, then the cap cost falls to $26,000.
Well, you know if you divide 26 by 36 months, it's going to be a lot less
than 36 by 36 months.
Does that make sense?
That's why a lot of dealers, especially Honda dealers,
Toyota dealers advertise leases.
And if you're watching a TV spot and it says we'll get a Toyota Corolla for
$199 a month, you really can't because that doesn't include sales tax.
You have no idea how much upfront money they're requiring on that lease
because you can't read the fine print.
If you freeze frame it, if you hit the pause button on your TV,
maybe run and get a magnifying glass.
You might be able to read it, but I doubt it.
Not if you have any stigmatism like I do.
So it used to be easier to catch the bandits.
I'm disappointed in this dealer because also they not only have this foe
that's FAUX meaning fake down payment assistance.
You also can get an extra $1,000 if you finance with them.
Why would they do that?
Because they can make a lot of money financing cars.
But is that rebate available to everybody?
No, because everybody isn't financing their cars.
Now, folks, if you're dealing with a straight up dealer and if you're
shopping online, you're going to see a price.
You see what's deducted from it right there on the, what do they call that?
Oh yeah, vehicle data page.
If you're searching inventory, you find a vehicle you like, you click on it.
Then that's going to bring up the vehicle data page where it drills down into all
the options that it has.
The MSRP, you might even be able to see the Windows sticker.
I would always look at that if you can find it.
A lot of dealers make it hard to find it, but you click on the Windows sticker
and it brings up the image of the Windows sticker.
And you compare that to what they're saying the MSRP is.
Because some dealers will jack around with that.
We've got a competitor in this market that adds nearly $5,000 to the MSRP on every
vehicle that he sells.
And he doesn't bother to hide it.
It's right there.
If you go to his dealership, walk around his inventory.
Every single new vehicle will be jacked up $5,000.
I'll tell you why here in just a minute.
But so you want to see what item or what dollars are deducted in the form
of manufacturer rebates.
And what alarmed me was when I saw these two assist numbers, trade
assistance and finance assistance, and realized that that is not in line
with state law, state regulations, which are not being enforced.
So I have submitted, I didn't submit a complaint.
I submitted an inquiry because folks, if one of my key competitors
is advertising vehicles for $2,000 less than I can, and he shouldn't be
able to because we all pay the same thing for all of our vehicles.
I don't care if your factor or your dealership is one mile from where
the vehicle is built.
We all pay the same freight charge.
We all get the same rebates.
However, sometimes regionally, they'll have different rebates.
I'll give you an example of that.
If you live in Florida and you come all the way to Tennessee to buy
a vehicle, then you will get the rebates that apply to the dealers
in Florida, not the ones that apply to the dealers in Tennessee.
So if the ones in Tennessee are higher because the manufacturer is
pushing a particular vehicle in a particular market area, then
you're not going to get it because you live in Florida.
If you live in Tennessee, you get it.
So when you have these faux rebates and they don't apply to you,
you go to the dealership and you get disappointed.
You've driven a long way, maybe.
And you know what they're counting on?
They're counting on forgiveness.
Oh, we're sorry.
We're sorry you didn't read the disclaimer.
Would you like a Coke, maybe a little Debbie?
And they're hoping that you'll forgive them.
And they drove all that way, said, well, what can you do
under trading?
You know, most people just, they know that most of these Yehuz
are crooks anyway.
So they said, well, you know, that's what I expected.
Now, what will you really do?
And then you succumb instead of leaving like you should.
But you know, gosh, you really want that car, right?
That's what they're counting on.
They're going to throw all these curve balls at you
when you get there.
Wait a minute.
I didn't know that I had to be in the Marine Corps
to get that rebate.
Oh, yeah, you've got to be in the Marine Corps.
So we've got to add $500 here.
And you don't have a trade.
So we have to add $1,000 there.
Oh, also, you're not financing with us.
So it's going to be $1,000 more.
Or no, it's going to be a total of no military.
Let's see, no trade and no finance.
Oh, yeah, you're going to have to pay us $2,500 extra.
What?
I'll be right back.
OK, I am back.
So why would a dealer jack up a price on his vehicles?
Like, if he's selling new vehicles,
doesn't he need to be competitive with everybody else?
And he's jacking up the sales price of every vehicle?
It's because he doesn't do it online.
He's smarter than that.
He puts that information, the extra 5-gram,
in the disclaimer.
Now, if you were to see it on TV,
that's that thing you need a magnifying glass for.
But if he doesn't put it in there anyway,
he doesn't disclaim anything.
And then you've got the VDP page.
You try to find it there.
You have to scroll all the way to the bottom.
I mean, it is way down there.
You finally get to it.
And you see that they're adding $5,000 worth of stuff.
Fluff, absolutely nothing.
That's what you're getting for $5,000.
So you don't really realize that's happening
until you get to the dealership.
And then you look at the window sticker and say,
what's this little window sticker here?
Oh, that's the market value adjustment.
What's that?
Well, that's because these things are so popular
that we sell vehicles at market value, not necessarily MSRP.
Well, that's not fair.
And, well, it's fair because everybody pays.
Well, I'm not paying it.
Well, you probably won't have to.
Once we get done negotiating, by the way,
how much monthly payment you're looking for.
See that it's the segue.
They move to monthly payment because they
know that 80% of the buyers are going to be financing.
And they don't really care what they're paying for the car.
I mean, a lot of them do, but most of them don't.
Just hit my monthly payment.
So that extra $5,000, not even an issue, but it is.
Trust me, because buried in that final paperwork
is that $5,000 that you ignored.
And your monthly payment is probably $100 to $150 a month
more than it should be because you weren't paying attention.
Now, does this happen at every dealership?
No.
It's at the minority.
I would say anybody that uses Foursquare negotiating
techniques, anybody that really works hard
pushing that monthly payment, push, push, push, push.
Those are the ones that you really have to watch.
And the ones that want a credit application,
just right up front, I mean, there are some ignorant sales
people that will walk up to people and introduce themselves
and talk for maybe five minutes
and say, what kind of credit you got?
What kind of monthly payment you're looking for?
Or they may say, where do you have the last car financed?
And they know by the name of the bank
or the name of the financial institution
that you financed your car,
whether you have good credit or bad credit
because there are certain banks that all they do
is buy people with bad credit.
So then the heat comes as far as the monthly payment
is concerned, but remember the four targets.
You don't buy a car the way they want you to buy it.
You buy it the way the guru says to buy it.
Negotiate the sales price of the car.
Separately, negotiate the trade-in value if you have one.
Then talk about the terms of the loan,
the interest rate, the actually length of the loan,
how much you're gonna be financing.
You'll know that once you subtract the sales price
that you have negotiated from the trade-in value.
That's the trade difference.
All you have to add is tax.
And then the fourth thing you're negotiating
is anything else that they try to sell you,
such as gap insurance and extended warranty.
Some type of a protection package.
We talk about those all the time.
The reason I talk about it so much
is there's always different people coming into the market.
And if you're an elderly person like I am,
you need to forward this podcast
if you are listening to a podcast
or, well, that's the best way to forward.
That's the only way, you can't forward a radio program
on WJCW, you can't do that.
But if you know somebody that's buying cars,
you know, this is what they do.
They trade every two or three years.
More than likely, they're paying way too much
because they're not paying attention
to the four targets independently of one another.
Okay, so that dealer that jacks up his prices $5,000,
he's doing it because it gives him more negotiating room.
You know, if a person does focus on price,
then he can show more for their trade-in
because he's got an additional $5,000 in markup.
Does that make sense to you?
But it's not real markup.
The only markup, or the only number that matters
if you're buying a new car is the MSRP.
The only number that matters if you're buying a used car
is what the true market value of that car is, retail.
Not wholesale, wholesale is what dealers pay,
retail is what customers typically pay.
You can find that information on kbb.com.
It's not 100% accurate.
Edmunds.com, it's not 100% accurate either.
We use five or six different books and market reports
and they're all different.
The only way we know what to put in a car
is looking at all of them,
taking the condition of the car into account,
the mileage of the vehicle into account,
the color, you know, whether this is a good market
for that particular vehicle, for example,
East Tennessee is not a great market
for two-wheel drive pickup trucks.
South of Atlanta is, you know,
anything north of the Mason-Dixon line,
you know, it's gotta be four-wheel drive
for the most part unless you live on the coast
and still many of those people buy two-wheel drive trucks.
You have to know your market
and what's good in your market
that will influence the value of the vehicle.
But once you know that number,
it's just like having, or an approximate number,
it's just like having the MSRP on a new car.
You negotiate down from there.
You find out what their price is
and you say, well, that's not even close to retail.
That's way over retail.
Look, how do you know that?
Well, I called the guru and he told me
what a fair retail value was.
Who's that?
Well, you just need to listen to my car guru on the podcast
and I'm glad I did because you're trying
to take advantage of me.
I mean, think about it.
What a huge advantage it is to walk into a dealership
and you know what a fair price is to pay
for that new car or that used car.
You know, within a reasonable number,
plus the fact that I write a check for it,
what your trade in is worth
and you understand the things that you need to avoid.
Isn't that valuable information to pass on
to somebody else, somebody in your family,
some young person, some not so young person,
somebody that's going out shopping for a car
and then you get these arrogant peoples
who I don't need to know guru.
I've bought 10 cars in my life though.
Yeah, and probably pay too much for all of them.
Okay, I'm gonna take my last break.
I'll be back here in just a minute.
Okay, after this program, I've got to print out, what, one, two?
Seven copies of the My Car Guru guidebook
for people who don't have email addresses or cell phones.
What they're doing is they're calling the dealership here
and they're at four, two, three, six, three, nine,
five, one, five, one.
That's the phone number for Gateway forward
and Gateway Nissan.
And they're, they're trying to figure out
Gateway forward and Gateway Nissan.
And then I get a note on my desk from my receptionist
saying please send the guru guidebook
to this person at this address.
And I don't mind doing that at all.
But if you do have an email address,
I can shoot it to you in a heartbeat.
All you have to do is send it to me, text it to me,
four, two, four, two, three, five, five, two, two, zero,
two, zero, and you will get the My Car Guru guidebook.
And it explains just pretty much everything
that I've been talking about.
Except, well, yeah, probably with more detail.
So I started this segment really
because I was frustrated about what a competitor's doing.
I'll let you know what the state of Tennessee says.
If they say it's legal, I'm gonna be disappointed.
But you know, when I'm losing business to a guy
or to a dealer because they're doing something that,
you know, if it's not illegal, it's unethical.
Don't you think so?
I mean, to insinuate that somebody can buy a car
a whole lot cheaper than they can through an advertisement
and then they come into the dealership and say,
well, you really can't buy it for that.
You don't qualify.
That's just not fair.
If their mama knew that they were doing that,
she would be upset.
But you know, there are so many people
that are able to justify taking advantage
of other people.
I was driving to work the other day
and I looked over in this really nice yard
and there were two ultra beer cans,
empties thrown in the front yard.
I said, can you believe that?
Who would do that?
As I got a little bit further down the road,
I saw two more.
And then a little bit further down the road,
I saw the final two and the case
or the carton that they were in.
They were just having a good time,
just hurling them in other people's yards
for somebody else to do the work.
And they're fine with it.
You know, I actually heard a litterer,
a litterer, sorry, say that the reason he does it,
he's because people need a job.
What?
Yeah, people need a job.
That's why I throw my stuff out.
If I didn't throw my stuff out,
there wouldn't be a job for people picking it up.
He was dead serious.
I wanted to smack him.
I didn't, I wanted to though.
That was a long time ago
when I was still smacking people, okay?
I'm kidding.
That, no, the last time I didn't smack him,
I hit him square in a jaw.
It was in a basketball game.
I was 18.
And my girlfriend, who is now my wife,
picked me up at the gym.
What'd you do?
I said, well, had a little scuffle.
She had to take me to the hospital.
Had to have eight stitches put in my chin.
But he looked worse,
but I really don't recommend
that type of behavior anymore.
But I do believe it in standing up to people.
And truly, if you have the ammunition,
I don't like using that word either, especially lately.
If you have the information
and you know how to use it
and you're not afraid to say the kind of things
that I teach on this program,
then you're gonna save money.
I mean, there is just no doubt about it.
I even tell people to ask for a discount
pretty much everything that they buy.
If it's from a big box store,
they're not gonna give you one.
They may look at you funny.
Although I did get,
I've talked about this on the show too.
I did get a $50 discount on a grill at Lowe's
because I asked the person that was showing it to me.
He gave me the price.
I said, is that the best you can do?
He just kinda looked at me.
What do you mean?
I said, well, is that the best you can do?
Can you sell it for any less?
Let me get my manager.
He got the manager, manager came over
and I introduced myself as I said,
is this the best you can do?
He said, well, no, I'll give you a $50 coupon.
How's that?
And I said, that works for me.
And my wife gets so mad.
She'll say, why did you do that?
That's embarrassing.
So you're embarrassed to save $50?
No, I'm embarrassed because you asked.
Then I'll keep the $50.
No, I want it.
So ask and you might receive.
You never know.
Well, thanks for listening to this edition
of My Car Guru.
Send me your information on your vehicle
before you go shopping.
423-552-2020, because what's it gonna hurt?
I mean, you'll know what your vehicle is worth.
And then you go into the dealership
and if you wanna send me the information
on the one you're trying to buy,
I'll tell you what you ought to pay for it.
And if there's any incentives on it,
if it's a used car, I'll pull a car fax on it for you.
And you'll know.
You'll know what to do from that point on.
It's really easy.
423-552-2020, or you can email me at LennyEllianNIALawson2020
at gmail.com and I'll see you on the next edition
of My Car Guru.
Request an explanation for:
2 cars
2 cars featured
Request an Explanation
Heard something you'd like explained? We'll add it to this episode.
Sign in to request explanations for terms you heard.
Want to learn more?
Browse our glossary for plain-English explanations of automotive terms, jargon, and concepts.
Help improve this episode
See something that's not quite right? Our annotations are AI-generated and can sometimes miss the mark. Click the flag icon on any annotation to suggest a correction.
Report incorrect info
Suggest better explanations
Flag missing cars
More from My Car Guru Podcast
Learn why your car life is so expensive and what you can do to save thousands
Jun 3, 2026
The most common problems with modern cars and trucks
Jun 2, 2026
Why a good google rating doesn't mean much, PLUS.....Chick cars vs. Boy cars...how to tell the difference
Jun 1, 2026
The highest paying jobs are often those that involve selling....and these are the attributes that determine real success
May 29, 2026