11 Car Buying Myths and Why They’re Not True


During a decade in the retail auto business and almost as long again as an automotive writer and journalist I’ve heard and come across an awful lot of car buying myths, so here I’m going to tell you about 11 Car Buying Myths and explain why they’re simply not true.

  • There isn’t a best time to buy to get a good deal
  • Buy when the weather is bad to get a good deal
  • Tell the dealer you’re a cash buyer to get a better price
  • The best prices are always online
  • Don’t mention a trade-in until the last minute
  • Get finance somewhere else but tell the dealer you’re paying cash
  • Save on sales tax by purchasing from a state with lower tax
  • A low-rate personal loan is the cheapest way to fund a car
  • There’s no such thing as genuine 0% finance
  • All dealers will try to rip you off
  • Tell the salesperson you’ve seen one cheaper somewhere else

I’m sure that when you’ve been in any industry for a decent length of time you’ll come across a lot of stuff people say about it that simply isn’t true. The thing about the auto business though, is that an incredible number of people seem to think they’re an expert when it comes to buying a car.

They may only buy one every four or five years or so, but when they do, the dealership had better watch out because an expert is coming through so don’t try telling them anything and don’t expect to be making any profit out of them.

If I was to stop and think for a while about things people say about buying a car that are actually true, I probably wouldn’t be thinking for too long. But when it comes to stuff I’ve heard that is just plain wrong, I could probably write a book. Anyway, here are the 11 biggest loads of garbage I’ve heard and why these car-buying myths simply don’t stack up.

1. There isn’t a best time to buy to get a good deal

This is actually one I’ve read about online, and I would have to assume it can only have come about because the writer wanted to get clicks because there are times when you can expect to get a better deal if you wait until then to buy a new car.

I’m not going to go into all the details of the different times when you might be able to get a better deal on a new car and why, because that’s a big enough subject for an article all on its own.

The times we’re talking about here are at the end of a month, the end of a quarter, the end of a calendar year, and when a new model of a vehicle is imminent. Now, if you shop at one of these times you are not guaranteed to get a better deal on a new car, but there are genuine reasons why you might.

If someone tries to tell you that you won’t get a better deal at one of these times, they’re either lying or they simply don’t know what they are talking about.

2. Buy when the weather is bad to get a good deal

It’s sometimes said that if you go to a car lot when it’s raining, cold, icy, or snowing you’ll get a better deal because people won’t go to a car lot when the weather is bad so the dealer will be keen to get a sale on a quiet day. Not only is this not true, but you should actually never go to a lot to buy a car when it’s raining or snowing, especially a used car, because you’re not going to be able to see it properly.

Car sales execs sometimes call rain “God’s polish” because it makes it almost impossible for buyers to see minor dents, scratches, and paint imperfections they’d definitely see if it was dry and sunny. Also, bad weather actually presents an opportunity for good salespeople to sell to you.

Wet or icy conditions will help them sell you something with all-wheel drive, especially if the vehicle you’re driving already is two-wheel drive. Another factor is bad weather can make it easier for them to get you inside to give you the hard sell, and on the lot, it can make you want to get a deal over and done with quicker than you might do if it was a nice day.

And on top of all that, a lot of people believe this myth about it being quiet on car lots on a bad weather day, so it might not be quiet at all when you arrive, anyway.

car salesmen annoying

3. Tell the dealer you’re a cash buyer to get a better price

I’m not writing these in any particular order, but if I was, this one would probably be at the top of my hit list. Let me spell this out for you; telling a dealer you’re a cash buyer is not going to get you a discount in this day and age.

Dealers can make more profit out of finance and add-ons than they do out of the vehicle itself, so declaring yourself as a cash buyer will tell them you’re a limited profit opportunity, so why should they bend over backward to give you a great deal?

This annoying myth goes back to a time before car dealerships became multi-million dollar professional operations that are run properly. The only reason a car dealer wanted cash in days gone by was to keep a sale off the books and away from the IRS. If they were not going to have to pay tax on a sale it would have been in their interest to share a little of that windfall with you to get a deal done.

These days, I’d say that if someone at a franchise dealer is trying to encourage you to pay cash you should walk away. It’s hard to think of a genuine reason why they would.

4. The best prices are always online

Where do you think those online prices come from that you’ll get at AAA, Costco, TrueCar, Autotrader, and elsewhere? They come from car dealers. In fact, they come to you from car dealers via that middle-man car buying service you’re using to get a great price.

If the middle-man website is getting a commission, don’t you think you could have a little slice of that if you were buying from the dealership directly?

Don’t get me wrong here, the internet has revolutionized car buying in the last 20 years and it’s an incredible resource that you’d be out of your mind to ignore when you’re shopping for a new vehicle. What I am saying though is that don’t overlook going to a physical dealership in your local area.

You can always go armed with the online offers you’ve had and see if they can beat them, can’t you? What have you got to lose?

And believe me, even if they can only match an online price it’s better to buy from a local dealership than to get a car shipped to you from a distant supplier. A local dealer will value you as a customer who they’ll want to keep attracting for servicing, maintenance, and future sales. To a distant online seller, you’re just another statistic.

5. Don’t mention a trade-in until the last minute

The thinking behind this is to keep the buying of a new vehicle and the selling of your old vehicle as two entirely separate transactions in the hope of getting the lowest price on what you’re buying and the highest price for your trade-in. No, that’s not going to work in your favor.

Some people believe that a trade-in is a negative to the dealer and something you should keep under your hat until the last minute because if you don’t, the dealer won’t be as keen to give you a good deal. In fact, sales execs are extremely familiar with this useless tactic, and all you’ll do is possibly annoy the salesperson, and potentially harm your chances of getting a good deal.

By all means, look at the new vehicle and you’re trade-in as two transactions, and get all your research done online on the prices of both before you go to the dealer. But springing a trade-in on the dealer at the last minute is dumb, and can be counter-productive.

6. Get finance somewhere else but tell the dealer you’re paying cash

I’ve already covered how there’s no incentive for them to give you a better deal if you’re paying cash, but some people think they should get their finance arranged away from the dealer but not tell them and lead them to believe you’re paying cash. You might have got a stellar finance rate online, but do you know if the dealer could have beaten it or not, and have you explored all the different finance options available?

The reason some buyers do this is they don’t want the dealer to know that they’re financing the car because of myth 3 above, but others just don’t want to annoy the dealer by admitting they’re financing somewhere else.

Do you know what? A little honesty can go a long way in a negotiation, so if you have arranged finance away from the dealer then tell them that upfront. They will appreciate the honesty, and having a good relationship with the dealer can only help in your other negotiations.

Being economical with the truth like this can also seriously backfire on you. The dealer might cut you a particularly good deal on a new vehicle to get it out of the door before the end of the month, quarter, or year to hit a target they have.

If you said you’re paying cash and you agree on a handover date for the last day of the month, and then you can’t honor it because the funds from the outside finance company haven’t come through by then, there’s a good chance the dealer might cancel the deal altogether if it was an especially tight margin or even a potential money loser for them.

7. Save on sales tax by purchasing from a state with lower tax

There are a lot of situations where you might look at another state and think the grass is greener, and it could well be that another state has a lower sales tax than where you live. It would obviously make sense to buy from a state or region with a lower tax rate if it could save you a load of money on a purchase as costly as a new car, but unfortunately, it doesn’t work like that.

In the real world, and not the world of car buying mythology, the sales tax you pay when you buy something is assessed on the area of registration and not the location where the purchase was made.

Don’t let this prevent you from shopping further afield though, because it could still work out cheaper buying from some distance away if you can get a better price on your purchase, even if you still have to pay more sales tax than you would do if you lived where the dealership is located.

dealer showroom

8. A low-rate personal loan is the cheapest way to fund a car

Plenty of people get hung up on the interest rate they’re paying when they’re looking at auto finance, but there’s a lot more to consider when you’re funding a car than just the rate. A personal loan from a bank might have a low rate, but the low rate is all it has going for it and it could actually cost you more than you think.

There are lots of different types of finance available from dealerships that banks don’t offer, and when have you ever been offered a lump sum deposit contribution when you take out a loan from a bank? A dealer might give a bigger discount on a car if you’re taking their finance as it can check one of those all-important boxes that trigger bonuses.

And if it’s a low monthly payment you’re looking for, a bank loan is almost always going to be more expensive than something like balloon payment finance or a lease.

9. There’s no such thing as genuine 0% finance

If I’m going to be entirely honest with you, which I always am, there is something to this one. The idea a lot of people have is that there’s no such thing as genuine zero percent finance because the money has to come from somewhere, and a lot of the time they’re correct.

When you see a dealership offering 0% finance deals it often means on the sticker price, and you’re not going to get a big discount to go along with it. The reason for this is what they’re doing to get the finance rate down to 0% is to use the money they would normally give away to you as a discount to subsidize the finance down to 0%. Basically, they’re paying the interest for you.

This is almost always the case if the offer is on used vehicles, but don’t assume this is always the case with new car offers. Sometimes a manufacturer will come to an arrangement with a finance company to run a 0% finance offer on selected new cars to drive sales. This is an entirely separate entity to the vehicle itself, so you will still be able to negotiate the same discount on the price of the vehicle with the dealer as you would do if you weren’t taking the finance.

Some people are so suspicious and they get so sucked into the idea that genuine 0% finance doesn’t actually exist, that I’ve had them turn it down when it was genuine. I once had a 0% finance offer running on a luxury SUV, and this was at a dealership where the majority of the clients were very wealthy and didn’t usually take our finance. This one guy agreed on a deal with me and got a sizeable discount, and he was happy with everything.

Because it was a no-strings-attached offer, I assumed he would take the 0% finance when offered, and it would help with my finance penetration for the month and increase my commission on the finance sales that did make money.

At the time the average bank savings rate was about 5%, so he could have bought using the 0% finance and left his $60,000 in the bank for two years to make $6,000 of interest. That’s free money for heaven’s sake! I simply couldn’t convince him that it wasn’t some sort of scam, and he went ahead and did a bank transfer for the money. You really can’t help some people sometimes, and sometimes some people just have too much money.


10. Dealers will try and rip you off

There was a time when car dealers were rightly held in such low esteem by the public they were right down there with real estate agents and politicians. Fortunately, the days of salesmen wearing sky blue or yellow suits with huge lapels and smoking a huge cigar are now consigned to history. Franchise dealerships are now much more professional operations and some of the sharp practices of the past are now rightly frowned upon.

Even so, most people don’t go to buy a car very often, and the classic 1970s car salesman stereotype is still very much alive in the minds of many car buyers. Ok. There are still some independent used car lots that might be run by guys like those, but if you’re shopping at a Ford, Chevy, Buick, or other large franchise dealership you need to forget about coming into that sort of salesperson.

11. Tell the salesperson you’ve seen one cheaper somewhere else

This was garbage and there were car buying myths before the internet arrived, but now you can be pretty sure that the dealership and its sales team will have an almost forensic knowledge of what offers are available in the local and wider areas. You might be doing a lot of research in the days and weeks leading up to making your move to buy a new vehicle, but let’s face it, this is their job.

Dealers all pay the same for their new cars from the manufacturer, so a Ford dealer in Iowa will have the same money in a new Ford Mustang as another Ford dealer in California, Texas or anywhere else in the US for that matter.

It’s a different story with used vehicles, and these days, most dealers price their pre-owned stock to the local market and they check it on a daily basis. If you’re looking at a used Impala on the lot of a dealership and you tell them you’ve seen an almost identical model across town for a lot less money, you’d better be telling the truth.

That’s because even if they are not already aware of that particular car – if it actually exists – you can bet the sales manager will have checked it out online before you come to the final stages of negotiation.

By that time you will be confronted with a raft of information about it to show why it is cheaper, such as more miles on the odometer, a worse service history, worse condition, lacking certain features or a less desirable exterior color or interior trim.

Always remember, you do this once every few years and they do it every day of the week. You might take an aspirin every now and again for a headache, but you wouldn’t tell a doctor you know more than them about how to diagnose chest pain, would you?