Can you really get a brand new 2007 Mazda worth over $21,000 for less than $10,000? This local car dealer apparently uses the new math to come up with this bargain.
*MOUSE PRINT: The dealer assumes you will make a $9000 down payment either by cash or trade and deducts that from the MSRP to create an artificially low advertised price. [Boston Globe, September 10, 2006]
Here is another example from a different dealer.
Talk about an eye-catching price for a brand new Mazda Tribute. It is just over $10,000 for a $22,000 car. How in the world is that possible?
The answer is, it isn’t possible, unless you play with the numbers.
*MOUSE PRINT: The $10,090 price assumes a cash down payment or trade in worth $5500 to arrive at their artificially low advertised price. [Boston Globe, July 30, 2006 and net ad]
Here is how they work the math:
MSRP: $22,590
Cash or Trade in: -$5500
Discount up to: -$7000
================
Advertised Price: $10,090
These dealers are deliberately treating a form of payment — a cash down payment or a trade in — as a discount from the price. What you put down is never considered a discount from the price.
With their kind of logic, a home builder could advertise a $400,000 house for only $10 (assuming you also agree to give him a $399,990 down payment).
This type of advertising is reprehensible. What do you think?
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Several thoughts on this:
*I’m surprised to see this here as “news.” This has been how cars are advertised for as long as I’ve been old enough to shop for cars.
*For those that have commented that it says as plain as day “cash/trade” and therefore it itsn’t misleading, I have to admit that I (a pretty educated and skeptical person) totally fell for this when I was shopping for my first brand new car at 21 years old. I feel foolish admitting it, but I didn’t know exactly what “cash/trade” meant. The word “trade” really threw me off, probably because I’d never owned a car worth trading in–the idea had never even occured to me! Now “cash,” I know what that its! And I thought the “rebate” part was from Chevrolet (or whoever) and the “cash” was from Big Joe of BBig Joe Chevrolet. I truly believed it was a discount because it is so clearly presented to make people believe that. I quickly realized my mistake when I went to the dealership, and I felt so dumb! But I STILL managed to get duped, because I was young and inexperienced, not because I was too stupid to understand. And that is why these folks should have to follow some guidelines for truth in advertising. I’m not one to scream LEGISLATE! every time some poor schmuk gets taken for a ride, but I’m not one to sit back and watch the rich screw the poor time and time and time again.
*This whole practice truly does boggle the mind. Whoever came up with this must be a total genious! Imagine the first time some guy spouted the idea in a board room somewhere… “All right, fellas, I’ve got an idea to get ’em in the door! Let’s write down the price AFTER they’ve already paid for half the car!!” All the others must have thought he was crazy. But he really was on to something. I agree iwth all the other commenters–they might as well advertise cars, computers, Cracker Jacks and cookies as being free. After you’ve paid for them.
That the State or Federal governments allow this to repeat itself shows me that there are huge deficiencies in coconsumer consumer protection within our system of government. Then again, it there weren’t then this site wouldn’t exist.
BIG PRINT: FREE!!!!
micro-print: after you pay for it.
This is so obviously illegal. Whether or not the FTC/FBI/FCC/SEC/CIA/IMF or Barney has gotten around to arresting this scum, they are commiting a crime. And this isn’t some crime that Congress hasn’t thought of yet, this is oh so clearly false advertising.
On the plus side, you can call their bluff. If a dealer advertises a price for merchandise, they are legally obligated to sell you that product for that price. You might have to sue or whatever, but usually just threatening to sue is as effective.
I love those advertisements! I teach at an alternative high school and will do a lesson on buying a car and auto insurance. This ads provide me with up front examples along with that magical “double sticker” and a variety of other tactics used to take advantage of those who are vulnerable – lack of education, poor credit and so on. My students automatically look for that magical * in all ads.
Reprehensible though such ads may be, the consumer still bears responsibiliy for judging their claims. Anyone who reads your site’s stories should quickly learn to “read the fine print.” If it sounds too good to be true, it probably is. Educated, judicious consumers are the best remedy for unscrupulous ads. If those ads don’t generate sales, they will be abandoned.
If these ads run in the paper or TV should make the papers responsible or the TV
stations it does reflect on to them.Also if it seems to good to be true is it
isn’t true.
Just goes to prove my point once again….. I have always said that I’d rather have a sister in a whore house than a brother as car salesman.
Automobile dealerships get away with many outrageous claims, which are usually
100% lies. When are the federal, state and local governments going to step in
and make them stop doing this to consumers?
Just as the examples mentioned here, there are thousands of others which are even
more deceptive.
ENOUGH IS ENOUGH!!!!!
They are a bunch of crooks.
They need to apply the 7-year-old rule to these ads:
Ask a 7-year old how much the car costs. I he/she says $9500 then it’s a deceptive ad. If he/she says $9500 plus the $7000 you have to give first, then it’s okay.
By 7 years old, the human mind has the capacity to understand basic math and basic text. All of the words there are basic so if an average 7-year doesn’t get it, then it’s either deceptive or confusing. Either way that would not qualify as a good ad in my books.
Try the same thing with a 14-year old, and you’ll probably the correct numbers on the first ad, but maybe not the 2nd because the print is a lot smaller.
—
BTW
I think the auto industry is the 2nd most unscrupulous industry in America…next to the legal system (which includes our govt reps!)
The best way to purchase a vehicle, if it is a dealership that will haggle, is to
ask for the dealer invoice and offer up from there. Be fair. Be firm. They do have
to make money to stay in business.
This is the same scam as the website banner for mortgage loans that assume a 20% down payment. $500,000 loan? $500/month? No problem. Just make a 80% downpayment.
Almost every car advertisement I’ve seem has appeared thatway. Tjese ads These ads are not misleading because its all spelled out how the dealer arrives at the advertised price. Car dealerships need to do everything they can inorder to entice customers to vist thier dealership. Why is it that people feel they have the right to haggle over the price of an automobile?? I dont go to WWal-mart and haggle over the price of a TV.
Same old stuff for the past 50 years. Car dealers have always had three or four
prices for the same make and model car. It has always been a hassel to deal with
automobile dealers. The games they play with customers are nothing less that
another way to screw the customer. It is not only the automobile industry that
is playing games it is MOST ALL retail outlets!!!!!!!!!!
This is part of why most car dealers are considered crooks or bandits by the general public.
Personally i feel that, one advertisemnets in general are all ridiculous. A car dealership should not be allowed to advertise anything other than the MSRP of the vehicle they are advertising.. That is the reason there are so many misleading ads in teh industry . The reason they have to advertise like that is due to the consumer always looking to negotiate the best deal( not like it can be done in most other business ie: doctor, lawyer,restaraunt,)than the dealer has to show a lower price to keep the consumer shopping . The reality is like other business in retail there should BE NO NEGOTIATION and the ads should only be , by LAW allowed to read the MSRP only > so, some consumer advocate should help get that into law. Oh yeah i am a sales manager in a NYC car dealership.
Dee, says as long as the font size is the same it’s o.k.
many ads in my paper say, at the very bottom in tiny print
all prices above reflect $5k down. All car dealers are pure
scum..
Simply deceptive to increase sales.
This is a clasic (and criminal) example of the old ‘bait and switch’ false advertising scam. Anyone who is drawn in by this bait and switch tactic should be able to file a lawsuit against the store if they do not sell them a car *for the advertised price*. And they will win. Then, these victories need to be publicized.
That is the only way this practice will stop.
I recently moved here from California and this was not allowed there. But it appears to be rampant on the East Coast and its really sleazy. Also, clearly, people pay substantially higher prices here for many consumer items.
(Too many layers between consumer and manufacturer?)
Whatever is causing it, it will eventually have to stop.
Don’t they have any large trees and rope around that area?
The television folks would love to cover it ….
A car dealer in Denver did this too. I really couldn’t believe what I was reading!
Hmm, everything I buy is now FREE…after I pay for it!
Car dealers that advertise in this manner are telling you only one thing about themselves. THEY ARE DISHONEST. DON’T DEAL WITH THEM IF YOU HAVE ANY SMARTS AT ALL.
It appears all car dealerships publish ads just like these. This is because if one were to advertise the lowest “REAL” actual cost you could buy their car, no one would call or inquire about the legitimate addbecause they would be to busy chasing the lowest large number in print. It is the greedy american people that force legitimate dealerships to sink to lower levels in order to keep up with their low level peers ads.
I was a car salesman for years, until earlier this year. Hardworking, honest, and straightforward as I was – I can honestly say that many dealer owners and principals (the people who create the ads) are not. Often, when you encounter dealer staff misleading you, it is because their managers MAKE them do it. As I told my clients for years, dealers got this bad rap starting after WWII, when the majority of their deceptive advertising practices began – and IMHO dealers deserve ALL of the bad rap they get from the marketplace – because they are often quite guilty of the underhanded practices that they are accused of. (please withhold my name)
I’m a Finance/Sales Manager in the Auto Business. With that out of the way–Quit your bitching about car
dealers and thier ads. You should know that these ads are meant to catch your attention and to encourage
you to come into the dealership to negotiate your car purchase. Fine print or not-anything that seems to
good to be true probably is! I would like to see advertisments that are realistic-BUT-most of the managers that write those ads never have to deal directly with the customer. Outright fraud should be punished and dealers that practice fraud in thier ads
should be boycotted. The buying public needs to look at all ads for content and restrictions and incentives
that may apply to the cost of the vehicle they want to buy. Just so you know-we know about the buyers tricks
too! My car has no mechanical issues! Never been in a body shop! Been the best car I’ve ever had! I’ve
never even used the 4 wheel drive or been off-road! My credit is next to perfect! I could go on for 10
pages. Bottom line is; A customer who is angry will never give you thier business-so-call the dealership
and discuss the ads and their content before wasting you time.