How to Read a Car Ad

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:

• "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.
• 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:

• 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.
• 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.
• 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.
• 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.
• 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.