Does a Car Dealer Have to Honor an Online Price?
I think we can all agree that the internet has completely changed the way most people buy new and used cars, and much of the change has undoubtedly been to the benefit of consumers. The biggest advantage buyers now have is the transparency of new and used car prices, and it’s never been easier for consumers to judge whether a price is cheap, fair, or expensive by going online. However, have you ever wondered if a car dealer has to honor a price advertised online?
A car dealer is under no legal obligation to sell you a car at the price advertised online, but it will hurt the reputation of the business if they regularly advertise vehicles online at prices they have no intention of honoring when buyers turn up to take advantage of an advertised price.
There are, however, different circumstances that can lead to a dealership refusing to honor the price advertised online and not all of them are dishonest or underhand. I have a lot of personal experience of this situation as a dealer and as a retail buyer, so here I’m going to make you aware of what might be going on if you can’t buy a car at the advertised price and what you can do if you find yourself in this situation.
Buying a car from a private seller
I’ll start with the easiest situation of them all, which is when you are buying a used vehicle from a private seller. Let’s say you’ve seen a used 1982 Corvette C3 advertised for sale online by a private seller in a local paper or some other form of private advert at $14,000.
You call the seller and arrange to see the vehicle the next day, but when you get there and say you want to buy the C3 the seller says they’ve had an offer of $16,000 from someone else and you’ll have to match or better it to own the car.
Just as there’s nothing you could do if you turned up and the seller had already sold the car, there’s nothing you can do if the seller wants more for the car now than the advertised price other than to pay the new asking price or walk away.
Even if the car has been advertised somewhere like eBay Motors, there isn’t much you can do if the seller changes their mind about the price or anything else for that matter unless it was an online auction rather than a fixed-price sale.
If you actually bought the car through an auction you may have some recourse through the auctioneers or the auction site, but if the seller doesn’t want to sell you the car and they refund any money that may already have been paid then you’re probably out of luck.
Buying a car from a used car dealer
I’m going to make a slight distinction here between a franchise and a non-franchise car dealer. By non-franchise I mean a used car dealer that doesn’t sell new cars and therefore doesn’t represent one of the major automakers.
If you see a specific car advertised by a non-franchise dealership at a price you think is attractive there’s no reason why you shouldn’t expect that vehicle to be in stock and for sale at that same price if you go to the dealership to check it out. What happens though if you get there and the sticker price is $750 more than it’s advertised for online?
The truth is the dealer is completely within their rights to change the price of that or any other vehicle they have for sale. It’s not a good look for a dealership to have a vehicle advertised at a lower price online than they’re actually prepared to sell it for, and you’d be completely within your rights to point this out. There are courses of action you can take in these circumstances that I’ll cover later on in this article, but nothing legal I’m afraid.
It’s the same situation if we’re talking about a franchise dealer, but there are some courses of action you could take in this circumstance that may be effective that are not available if we’re talking about a non-franchise dealership.
Buying a car through a third-party platform
You’ve probably noticed that there’s another way of buying a used car, truck, van or SUV these days that’s become particularly prominent during the pandemic and lockdowns, which is buying completely online through a third-party car sales platform.
Two of the biggest names in online used car sales in the US are Carmax and Caravana, but I want to make it very clear that these are very different operations from the likes of Autotrader. Sites like Autotrader are simply advertising platforms and the modern-day, national equivalent of magazines and local newspapers. The likes of Carvana are entirely different as they are actual car dealers rather than advertising platforms.
If you see a car advertised for sale by Carmax, Carvana, or any similar seller then they actually have that particular used car in their inventory for sale. They’re basically a non-franchised used car dealership that operates entirely online, so the whole sale is conducted on the internet and the car is either delivered to you or you can pick it up from a convenient location.
This type of operation pretty much cuts out the issue of not being able to have the car at the advertised price because the price is there online and you either click and pay that price or you don’t. You won’t click on the price and pay for the car and then get told the price was wrong and they know want an extra five hundred bucks from you.
There are other issues I have with buying a used car remotely in this way, but that’s a subject for another article.
I also have to mention another type of online used car selling platform, and these operate as a third party between you and dealerships. I’ll use Cargurus as an example. These sites advertise cars for sale on behalf of dealers and some of them will even let you print out price certificates from their websites for you to take to the dealer. Basically, they’re not worth the paper they’re printed on.
You are still buying the car from the dealership so all the situations I detail about buying from dealers here still apply.
Why wouldn’t a dealership honor an advertised price?
There are several reasons why the price at the dealership might turn out to be different from the advertised price. Some reasons are dishonest, some are entirely innocent, some are incompetence and some are completely understandable.
Dishonest – Let’s be honest; this is what you’re going to think first if you get to a car dealership and the price is higher than the advertised price, isn’t it? I hate to admit it, and it lends credence to the (misplaced) idea that all used car dealers are crooks, but some dealers will advertise a stupidly low price just to get people to come down to the dealership.
They know the customer will not be happy that the price has gone up, but some still genuinely believe that getting buyers physically through the door is the hardest part of the battle to make sales. They think that once you’re there they will be able to calm you down and use their sales techniques to convince you to still buy from them, even if it’s a different car to the one you saw advertised.
I hate to admit this, but it’s not unknown for more unscrupulous dealers to advertise a vehicle that doesn’t even exist just to get customers in the door. After all, if you turn up and the car isn’t there they can always say it’s just been sold and they have been too busy selling cars to update the website.
Let me be clear though; this is not a common practice and only the worst dealer will stoop to this sort of tactic and they’re the kind of dealers that will soon have a bad reputation in their local area.
Entirely innocent – Nobody’s perfect and mistakes do get made. Some dealerships who are not entirely on top of this online business thing give the job of updating the website to a trainee or someone else in the dealership, often who might not have the greatest levels of dedication or attention to detail. It’s easy to enter a price of $21,995 instead of $21,495 if you’ve got 20 vehicles or more to enter onto the website that have just come into stock.
Incompetence – The entirely innocent could also be labeled as incompetence, but I’ve made another section to cover incidents I’ve seen that really are incompetence rather than an innocent mistake. A good example of this is when you ask the detailer or the person allocated as the dealership photographer to put the cars on the lot when they’ve been prepared for sale or after a test drive.
You wouldn’t believe the number of times I’ve gone to inspect the lot and seen the wrong prices put into the windows of the wrong cars. There have been plenty of occasions where an excited customer has run, out of breath, into the showroom to ask to buy that three-year-old used Range Rover priced up at $9,995.
Of course, the customer knows that’s the wrong price and they’re just trying their luck or having a laugh, so thankfully, no law says I had to stand on that price just because a detailer put the wrong hanger in the wrong car.
Understandable – This is one where you may part company with me, but I’m coming at this as a former car dealer. During the global financial of 2007/8, used car prices were going up and up every month and we’ve been seeing a similar situation during the pandemic.
As new car sales crash through the floor, used cars become more and more in demand and a lack of extra used inventory from new car trade-ins pushes up used car prices. Normally, used car prices drop every month without fail, so this is a situation buyers are not used to.
If a dealer has a used lot full of stock that goes up in value at the end of the month, it’s not going to be out of the ordinary for the on-site prices to increase before the online prices are updated.
My true story – In 2008 I was running the sales department of a Land Rover dealership and used values were increasing month-on-month while new cars weren’t selling at all. I had a very nice LR3 for sale that was advertised online at $18,999 and one of my sales team took a telephone inquiry on this vehicle on Wednesday from a guy who lived about a three-hour drive away.
The guy said he “might” come through to see it at the weekend but he declined to put a deposit on it to hold it, so my sales exec assumed he’d probably never hear from him again. I was in the showroom on Saturday morning when this guy actually turned up and started to kick off because the price on the car was $19,750 and not the $18,999 he’d seen advertised.
Now, I would have had a little more sympathy with him if the LR3 was still advertised online at $18,999 but I’d changed the online price myself the day before. It turns out he hadn’t checked the price before setting off on his three-hour drive to come and see it and he hadn’t even called to check if it was still in stock.
I explained the situation to him and asked him to look online and see what the advertised price was, and he saw it was now online and priced at the correct $19,750. If he’d said “okay” and asked if we could come to some sort of deal I’d probably have let him have the LR3 for $18,999 anyhow, but he actually dared to tell me that “this isn’t how things work.”
He went on to inform me that “used cars don’t go up in value, you have no right to increase the price and I’m going to inform the authorities.”
He didn’t get the car and then had a long three-hour drive back home empty-handed after he called his “friend who knows about the legalities of these things” and was told he didn’t have a leg to stand on, legally.
The reason I tell you this story is because it leads nicely into the final section, which is what you can do if this sort of thing happens to you.
What can you actually do?
In legal terms, there’s nothing you can do if you find a vehicle is up for sale for more than its advertised online price, but there course of action you can take that can lead to a least some form of satisfaction.
Whether it’s a vehicle for sale from a non-franchised used car dealer, a franchised dealership, a private seller, or an online retailer, the worst thing you can do is kick-off and start making threats. All that’s going to do is put the seller’s back up and it’s not going to result in any benefit for you whatsoever.
All you can do in most cases is be nice and ask if they’d consider selling for the advertised price. If they say no and you still really want the vehicle, then ask if they are prepared to meet you somewhere in between the advertised price and the price on the windshield. After all, negotiating over the price is all part of the dance most of us do when buying a used car anyway.
If you get nowhere or the car doesn’t even exist, the internet is your friend once again. Online reviews and social media word-of-mouth are powerful forces these days, so a subtle hint that you have a large social media following locally could lead the seller to think twice about sending you away unhappy.
Even if the vehicle doesn’t exist, they may be inclined to offer you an exceptional discount on a vehicle they do actually have in stock that you like.
To be honest, I once turned up at a used car supermarket to buy an advertised used car at the advertised price only to find it didn’t exist. When I asked where it was the salesman said to me: “Don’t take any notice of the adverts.
They’re just there to get you in here.” I immediately told him what I thought of him, his employer, and that practice, and then I walked out and bad-mouthed them to anyone who’d listen. I’m glad to say that a few years later their sharp practice caught up with them as their reputation ended up in the gutter and they went out of business.
I’ll leave you with one last thought, which is about franchised dealers and relates to the story I told you earlier. Even though we’re talking about used cars here and automakers are not particularly interested in them, they are obsessed with their customer satisfaction index scores (CSI). If you don’t get satisfaction from the dealership you could try and get in touch with the manufacturer of the new cars they sell.
The guy I mentioned earlier didn’t go to Land Rover, but the dealership I worked for was part of a massive publicly listed group of more than 200 sites and he complained to the area manager. He was scared of it getting back to Land Rover and he offered to sell the vehicle to the guy at the original price.
For what it’s worth, he decided he wanted it for even less than the original price so the area manager got the hump with him as well and he never got the LR3 after all.
Regardless of the circumstances, it usually pays to be nice and the best thing about it is it doesn’t cost anything.