Since the first newspaper ad was ever run by a car dealer, there have been bait and switch tactics going on. Not all car dealers do this, but a good percentage of them do.
By definition, a bait and switch is when a dealer publicly prices a car with no intention of selling it for that price. As newspaper advertising has been on the decline for car dealers, many are now turning to the Internet to continue to mislead people.
Unfortunately, many people believe that everything on the Internet is true. Oh sure, there are laws against this sort of practice, but in most States, the practice is so rampant that regulators cannot begin to enforce the laws on the books.
The Federal Trade Commission just announced a crackdown of dealers all over the country for a variety of reasons, mainly misleading advertising. It has been a long time since the Feds have cracked the whip, and odds are, the unscrupulous dealers will straighten out for a while.
The most common bait and switch involves pricing cars way below their cost. The dealer designates one particular stock number or VIN at that price, and once the vehicle is sold, whether at that price or not, none of the other vehicles on the lot can be purchased for that price. The salespeople at places like this are trained to waltz you around the lot, finally declaring that the advertised vehicle “must have been sold already” and then finding a similar one, vowing to “get as close to that ad price as possible”. Let the games begin.
I watch ads online from a Houston Chevy dealer that advertises prices with every factory rebate available, even private offers that most people cannot qualify for. These days, many automakers offer extra rebates for our military people for instance. This dealer was using GM private mail offers ($2000 in some cases), military discounts, and other offers like an extra rebate for credit union members. Over 99% of the people who walk into the dealership will not qualify for all or perhaps any of those rebates. Worse, this particular dealer doesn’t spring this news on you until you have gone through the entire process of buying a car. While in the finance office, some hours later, you get the bad news. Sadly, too many people are worn out and they just wave the white flag. Another successful bait and switch, and another bad dealer rewarded for unethical behavior.
You will see what appears to be a great price and the words “any and all rebates applied”. Major red flag there. A good dealer will break out how they arrived at the price advertised. For instance, MSRP $30,988 minus $2000 factory rebate, minus $2000 dealer discount-Sale Price $26,988. Then you might see $25,988 with Ally financing. That my friends is the right way to do it.
One dealer I ran across was pricing cars online and buried in the website, on a different page were the words “all prices plus freight charges”. REALLY? I have seen some shady stuff over the years, but this was really bad. In another instance, a dealer quotes a low-ball price and you see: price does not include dealer-installed options. That means they can charge thousands of dollars for floor mats, window tinting, and wheel locks that cost about $200.
Here is the sad thing…many times people see these fraudulent prices and take them to a good dealership who tries to explain what is going on. Of course, the good dealer looks like a bad guy and probably misses out on a sale, while the consumer falls for the bait and switch at a different dealership.
I hope the FTC continues to monitor ads closely and take action against dealers that try to take advantage of innocent people.Tags: ads