Complete Dealer
Tactics Guide

How to Counter It

An advertised vehicle at a great price magically "just sold" when you arrive. But don't worry—they have a "similar" vehicle for several thousand more. This is designed to get you emotionally invested after driving to the lot.

ADM (Additional Dealer Markup) or "Market Adjustment" is an amount added above MSRP. While supply and demand is real, ADM is 100% negotiable dealer profit—not a mandatory fee, not from the manufacturer, and not required by law.

You drive home thinking the deal is done. Days later, the dealer calls saying your financing "fell through." Now they need new paperwork—at a higher interest rate, higher payments, or both.

The finance manager quotes you a monthly payment higher than your actual loan payment—say $400 instead of $350. The extra $50 is silently allocated to products you never asked for. "Great news! For that same payment, I can include warranty and GAP insurance." You think you're getting a deal, but you were always paying.

The lender approves you at 5% APR, but the dealer tells you 7%. That extra 2% is "dealer reserve"—kickback profit. On a $25,000 loan over 60 months, a 2% markup costs you approximately $1,300 in extra interest.

Dealers push 72 and 84-month loans to lower monthly payments. But these ultra-long loans come with serious risks:

• More total interest: Thousands more over the life of the loan
• Negative equity: The car depreciates faster than you pay it off
• Higher rates: Longer loans often come with higher interest rates
• Trapped: You can't sell or trade without bringing cash to cover the gap

The dealer's first offer on your trade-in is almost always significantly below fair market value. They're testing to see if you know what your car is worth. They'll point out every flaw to justify a lower offer.

The dealer offers you more than expected for your trade-in—but then increases the price of the new car by the same amount. You feel like you won, but the net result is the same or worse.

"Doc fees" cover paperwork processing. Reasonable fees are $75-$200, but some dealers charge $500-$800+. Some states cap doc fees (California: $85, New York: $175). Others have no limits. The actual cost to the dealer is minimal—it's largely profit.

These are high-profit, low-value products the F&I department pushes:

The dealer says you must buy their "protection package" to purchase the car. These mandatory bundles are often illegal under the FTC's CARS Rule.

You're left waiting—sometimes for hours—while the salesperson "checks with the manager." This isn't inefficiency; it's strategy. After hours at the dealership, you're tired and just want to go home. That's when you're most likely to agree to terms you'd normally reject.

The salesperson is your friend who "wants to help." The manager is tough and "won't budge." It's classic good cop/bad cop designed to manipulate your emotions. Remember: they're on the same team, working for the same commission.

"This price is only good today." "Someone else is looking at this car." In almost all cases, the deal will be available tomorrow, next week, or next month. There's always another sale, another promotion, another car.

Test drives, sitting in the car, imagining yourself driving it—these create emotional attachment. Salespeople are trained to get you emotionally invested so logic takes a back seat.

The "money factor" is essentially the interest rate on a lease, but it's expressed as a tiny decimal (like 0.00125) instead of a percentage. This makes it hard to compare to loan rates—which is exactly the point.

The "cap cost" is the lease equivalent of the purchase price. Dealers know consumers focus on monthly payments, so they inflate the cap cost since most lessees never negotiate it. It should be at or below MSRP.

Dealers often try to get you to put $2,000-$3,000+ down on a lease to lower your monthly payment. This is almost always a mistake.

At lease end, dealers charge for excess mileage ($0.15-0.30/mile) and "excess wear and tear." These charges can add up to thousands.

The odometer is rolled back to show fewer miles. Despite being a federal crime, the NHTSA estimates over 450,000 vehicles with rolled-back odometers are sold annually.

"Title washing" removes a salvage, flood, or rebuilt designation from a vehicle's title—often by registering it in a state with lax title laws. Salvage and flood-damaged vehicles can have hidden structural damage, electrical problems, and safety issues.

Dealers sell vehicles "as-is" to avoid responsibility for problems. While sometimes legitimate, some dealers use it to dump problem vehicles. Know that "as-is" doesn't protect dealers from fraud—if they lied about the car's condition, you may have recourse.

CPO programs can offer genuine value: manufacturer-backed warranty, inspection, and peace of mind. But the certification premium isn't always worth the cost.

If you've already signed, don't panic—but do review your paperwork immediately. Look for these common issues:

Most F&I products—extended warranties, GAP insurance, service contracts—can be cancelled for a prorated refund. The dealer won't tell you this, but it's usually in the contract.

If the dealer calls days or weeks later saying "your financing fell through," this is the yo-yo scam. They let you drive home before financing is finalized, then call you back demanding more money, a higher rate, or a bigger down payment.