There’s no question: Buying a car -- used or new -- is expensive.
The average price for a new car topped $34,000 in June 2017, according to Kelley Blue Book analysts. Meanwhile, in 2016, the used-car transaction price reached a record high at $19,200, according to Edmunds.
Considering that financial experts recommend the 20/4/10 rule when plunking down money for a vehicle -- at least 20 percent down, financing for no more than four years and keeping monthly car payments less than 10 percent of your gross income -- those high prices make it tricky for many to buy.
So, it should come as no surprise that some unscrupulous car dealers take advantage of shoppers, desperate for a new set of wheels by using deceptive car ads.
The Federal Trade Commission listed some of the top deceptive car ads. Here’s what the federal agency recommends shoppers look out for -- and steer clear from.
1.Vehicles are available at a specific low price or for a specific discount
But, the commission warns, what may be missing from this “deal” is that low price may come only after you make a down payment of thousands of dollars and also spend money on fees, taxes and more. In other cases, the agency says, the deal is only for the most expensive model.
2. “Only $99/Month”
In reality, the commission says, those inexpensive payments are simply “teasers” and last for just a few months. Payments for the remainder of the loan may actually skyrocket.
3. Zero or Low Rate Loans
In fact, that low annual percentage rate, also known as the APR, may apply to only a part of the loan. A higher APR could kick in as you pay off the remainder, potentially hiking the total cost of the car by thousands of dollars.
4. “$0 Due at Lease Signing”
Be sure to read the fine print when you’re offered this “deal,” the commission urges. In many cases, you’ll still have to spend money -- maybe several thousand dollars -- at the lease signing to cover additional fees.
5. You’ve won!
Don’t get too excited. There may actually be no prize. It could simply be a ploy to get you to the showroom, the agency says.
The agency’s website has a list of questions car buyers should ask dealers before they sign on the dotted line. They include:
For car buyers, the best question they can ask themselves is this: “Is it too good to be true?” If you can’t get clear answers from a car dealer about their “once in a lifetime” deal, it’s best to walk away and not allow yourself to be taken advantage of by deceptive car ads.
If you are experiencing financial difficulty and are looking for a solution, non-profit credit counseling can help you make sense of all your options. Contact us today for a free financial assessment with one of our certified credit counselors.
Consumer Education Services, Inc. empowers people to overcome their financial challenges and lead financially-healthy lives.
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