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Buying Tips
How to Read a Car Ad
Fine Print Reveals the Real Savings — If Any
By Philip Reed, Senior Consumer Advice Editor
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You're reading the paper one Saturday morning when your eyes fall on an ad
that reads: "VW JETTA, $199 a MONTH!"
You turn the page and try to peruse other articles, but it's no use.
You've begun thinking, "$199 a month — that's a heck of a lot less than I
thought it would be!"
Sure, we all know that advertising stretches the truth farther than the
waistband of a sumo wrestler's boxer shorts. Still, it pushes our buttons.
Should we ignore everything we read in car ads? Or is there a grain of truth
we can benefit from?
The answer is, you have to know how to interpret car ads. It can be
confusing, but it's worth the struggle. And make sure you find a magnifying
glass to help you read the small print.
Misleading Ad Come-Ons
Here are a few misleading techniques common to car advertising:
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"One Only At this Price": Some car ads are for cars
that are such ugly colors or are so severely stripped that the dealership
advertises them at bargain prices. They hope that people will be drawn to the
dealership thinking there are other cheapo cars. Wrong. This "ad car" is the
only one — and it's blocked in by hulking vans on the back lot somewhere. Look
for the telltale phrase "one only at this price" to tell you if it is an ad
car.
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Low Monthly Payments: Ads often promise wildly low car lease
payments for luxury cars. You scour the ads thinking, "Can it be true?" If you
hold your magnifying glass over the small print at the bottom of the page,
you'll see that you have to make a gargantuan down payment to get the monthly
payments quoted. In fact, you could get any monthly payment you wanted if you
were willing to make a large enough down payment.
What to Look For in Car Ads
You might be wondering what information, if any, you can get from
reading car ads. There are several things to look for:
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Incentives and Rebates: Auto manufacturers sometimes offer
incentives to spur the sale of slow-selling vehicles. Car ads are an important
way to learn about this financing method.
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Remember the Sales Tax: Another favorite in car leasing ads
is to quote low monthly payments that don't include the sales tax. Usually,
you will find small print lurking somewhere that says, "Plus tax and license
fees." To compute the tax yourself, multiply the monthly payment by your
state's sales tax. Add the sales tax to the quoted payment to get the total
monthly payment.
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Length of the Contract: Some monthly payments look good until
you see the length of the auto loan. While $399 a month might look good for 36
months, it will break the bank when stretched to 60 months.
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Interest Rates: Dealers will offer low interest rates
available through the manufacturer. Sometimes, these rates are way below the
prime rate available through banks. This can save you hundreds of dollars over
the term of the auto loan.
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Available Models: Some models of selected cars qualify for
big savings. Others don't. Read the fine print, and you'll find out where the
bargains are.
If a dealership advertises a car at a certain price, they are legally bound to
sell it to you at that price. That's why "ad cars" are usually parked on the
back lot -- they really don't want you to see that car at the
advertised price. But if you are insistent, you can sometimes convince them to
show you the advertised car and get a screamin' deal on it. Just tell them it
will be much easier to sell you the car now than it will be to deal with your
attorney later.
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