Buying a car should be simple. But if you’ve ever set foot in a dealership, you know it’s anything but. Dealerships use tactics that would never fly in other businesses. Some of these practices are so common that people accept them. But if you saw a grocery store or a tech shop doing the same thing, you’d probably call the police. This matters because these dealership practices can cost you money, waste your time, and leave you feeling frustrated. Knowing what’s normal—and what’s not—can help you protect yourself the next time you shop for a car.
Here are six dealership practices that would be illegal in other industries, yet still occur when you buy a car.
1. Bait-and-Switch Advertising
Dealerships often advertise cars at prices that seem too good to be true. And they usually are. You show up, excited about the deal, only to find out that the car “just sold” or “isn’t available.” The salesperson then tries to sell you a more expensive model. In most industries, this is called bait-and-switch, and it’s illegal under the Federal Trade Commission Act. But car dealerships often get away with it by adding fine print or blaming inventory changes. If a furniture store did this, it’d face fines or lawsuits. When shopping for a car, always call ahead to confirm the deal and get details in writing. If the vehicle isn’t there, walk away.
2. Packing the Payment
When you buy a car, you expect to negotiate the price. But some dealerships focus on the monthly payment instead. They “pack” your payment with extras—like extended warranties, service contracts, or even window etching—without telling you. You think you’re agreeing to a certain price, but you’re actually paying for things you didn’t ask for. In other industries, adding unauthorized charges is fraud. Imagine a restaurant adding random items to your bill without asking. Always request a detailed breakdown of your payment and review each line carefully. If something looks off, ask for it to be removed.
3. Yo-Yo Financing
You sign the paperwork, drive off in your new car, and think the deal is done. But days later, the dealership calls and says your financing “fell through.” They demand you return the car or sign a new contract with worse terms. This is called yo-yo financing. In most industries, once you buy something, it’s yours. Stores can’t take back your TV or laptop because they changed their mind about your credit. However, dealerships often use this tactic to pressure buyers into higher interest rates or larger down payments. If a dealer says your financing isn’t final, don’t take the car home. Wait until everything is approved and signed.
4. Forced Arbitration Clauses
Many dealerships slip forced arbitration clauses into their contracts. This means if you have a dispute, you can’t sue them in court. Instead, you have to go through private arbitration, which often favors the business. In other industries, forced arbitration is under heavy scrutiny, and some states have banned it for certain transactions. But car buyers often don’t realize they’re signing away their rights. Always read the contract carefully. If you see an arbitration clause, ask if it can be removed. If not, consider shopping elsewhere.
5. Non-Refundable Deposits
Some dealerships ask for a deposit to “hold” a car. But if you change your mind, they refuse to give it back. In most industries, non-refundable deposits are tightly regulated. For example, if you put down a deposit on an apartment or a wedding venue, there are clear rules about when you get it back. But car dealerships often keep deposits even if they haven’t done any work or held the car for you. Before handing over any money, ask if the deposit is refundable. Get the answer in writing. If they won’t put it in writing, don’t pay.
6. Misleading Add-Ons and Fees
Dealerships love to add fees and extras at the last minute. Some are legitimate, like taxes and registration. But others—like “documentation fees,” “market adjustments,” or “VIN etching”—are just ways to pad the price. In other industries, hidden fees are illegal or must be clearly disclosed. Airlines, for example, have to show all mandatory fees up front. But car buyers often get hit with surprise charges right before signing. Always ask for an itemized list of fees before you agree to anything. If you see a fee you don’t understand, ask for an explanation or refuse to pay it.
Why Knowing These Dealership Practices Protects You
Car dealerships use tactics that would be illegal in other industries because they know most buyers don’t expect them. These dealership practices can cost you hundreds or even thousands of dollars. They can also waste your time and leave you feeling powerless. But you don’t have to accept it. By knowing what to watch for, you can protect yourself, save money, and make better decisions. The next time you’re at a dealership, remember these six dealership practices. Ask questions, read everything, and don’t be afraid to walk away if something feels wrong.
Have you ever experienced any of these dealership practices? Share your story or tips in the comments below.
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