One thing to keep in mind is that where Walmart can undercut competition because they can always find merchandise from a lower-paying sweatshop, every car dealer pays the exact same price for their cars, regardless of where they're located. We even have a database that we log our sales into, so dealerships see one another's prices. Likewise, every dealer has to play by the same rules when it comes to manufacturer incentives like cash-back rebates and financing offers.
Why does that matter to you? Well, it means that if one dealership is offering the same car for $1,000 less than another dealer, either they're willing to take $1,000 less in profit out of the goodness of their hearts or they're not telling you something. Guess which is more likely!
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"He said it was because he liked my face! It's plausible!"
So, there are a bunch of ways dealers can seem like they're coming down on the price or adding free stuff without actually doing it. For instance, their advertised prices frequently have a miniscule disclaimer at the bottom that says "all incentives applied." What this means is that all of the little bonuses and extra discounts that a dealer can offer have been subtracted from the advertised price, but that doesn't mean you're necessarily eligible for them. So, that price may include incentives for things like being a recent college graduate or a bonus for brand loyalty. Unless you just graduated and already own a Ford, those incentives don't apply to you, and the sweet price you thought you were getting just shot up $1,250. Also, dealers commonly offer either a cash-back bonus or low-interest financing, but not both -- even if the sign out front has both offers prominently displayed.
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