Car dealerships have a way of testing your sanity, so we asked Jalopnik readers to shed light on the mystery of buying a car and debunk these ten common car-buying myths.

Welcome back to Answers of the Day — our daily Jalopnik feature where we take the best ten responses from the previous day's Question of the Day and shine it up to show off. It's by you and for you, the Jalopnik readers. Enjoy!

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10.) Every time the salesman goes to check with the manager, he's screwing with me

Suggested By: Phlip425

Why it's a myth: Not every time. Much as we think that every time the salesman leaves the table it's part of some psychological mind game, they often do have to get their boss to sign off on a deal before they can move forward with you (legally or contractually).


That said, if your salesman is back there for way too long and is giving you the whole nine yards on the good salesman/bad manager schtick,feel free to be completely skeptical of what's going on.

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9.) The dealership I bought my car from gives me service at a better price

Suggested By: $kaycog

Why it's a myth: Reader $kaycog explained why you're not stuck with the dealership from which you bought your car just if you need to get it serviced.

Dealerships are made up of several separate businesses. Each entity needs to meet the owner's profit goal. "New Car Sales" doesn't care where a car is serviced, and "Service" doesn't care where you bought the car.

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8.) Extended warranties/coverage are a rip-off

Suggested By: SR20-Lead is the new bondo

Why it's a myth: We tend to think that every addition that the dealers try and sell us on are complete scams. We don't want to pay for another little pinstripe or dealership decal, so we tend to gloss over extended warranties with the same critical eye. Reader SR20 has some experience in service departments and had this to say:

You want to make sure it is either a manufacturer extended warranty, or one backed by a large company that has a good reputation and a long history such as JM&A. The newer the car, the cheaper the warranty is. It's a good decision if it's new. I rarely see the extended warranty not at least pay for itself. Plus, you can negotiate on the price of them as well as the car. Most people just don't know that.

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7.) Kelley Blue Book is a definitive price point

Suggested By: smackela

Why it's a myth: The world of privately sold used cars can feel like a parallel universe at times, where every rusted-out heap is a "project car" and everything with a new coat of paint is perfectly mint.


On top of that, you have sellers swearing up and down to the holy Blue Book of Kelley, sticking to trade-in figures that always look a few thousand over what everyone else is paying. The Kelley Blue Book may be a fine guide, but it is no line in the sand.

Check through recent sales of similar cars in your area to find out the going rate for a car and don't just listen to Kelly.

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6.) The first year of models are to be avoided like the plague

Suggested By: rebeldevil

Why it's a myth: This myth goes back at least to the late 1970s, when there were more American cars getting recalled than were getting sold at dealerships. You assumed that carmakers would try and pawn off some lemon on the public and it would take a little while for the government to catch up and get the problem fixed.

That's not really the case anymore (if it ever was), and carmakers spend years testing and developing parts before it ever reaches the showroom. You have every right to be cautious, but don't think that this year's new cars are all junkers.

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5.) Magazine reviews tell the whole story, even Consumer Reports

Suggested By: Nighthawkwill7

Why it's a myth: More and more people are buying cars without taking test drives, just going on what they read in magazines. And there are plenty of people out there mindlessly trusting the reliability indices of Consumer Reports and other publications.


Reliability isn't everything. Go and do some more research and take the car for a test drive. If you don't, well, you might find yourself in the worst car-buying situation imaginable: having just bought a Corolla.

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4.) Signing a foursquare is legally binding

Suggested By: Buckus

Why it's a myth: Until you take delivery of the car and actually get it off the lot, whatever you're signing at the dealership isn't legally binding. That's not to say that the sales staff won't try and make you feel like it is. Remember that the foursquare document you sign is to help them get you ready for a trade-in and a sale and nothing more. If you're wondering how things can go if you don't heed these words, take a note from reader komododave.

I talked to a guy who told me of his Toyota experience. He had a truck dealer traded for him because the dealer didn't have the right combo of color and specs. No big deal. When he came to pick it up, his trade in was taken in back and he was fast tracked through financing. When he came out and was shown his new truck, it was the wrong color. He refused it and demanded his trade back. The dealership told him it was too late, his trade was already sold to another dealership and trucked off, plus he already signed for the new truck. He "had" to take it.

What really happened is the dealership didn't want to spend money trading for the right truck, took one of theirs off the lot, charged him for the trade and hid his old truck in the back so he thought there was no way out. I didn't tell him any of this because it wouldn't have helped and would have just made him feel worse.

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3.) Paying cash will get me a better deal than financing

Suggested By: Phlip425

Why it's a myth: Paying cash is a good way of finalizing a deal on a car completely within your means, but just because you're paying cash does not mean that the car is going to magically become cheaper. Reader Graymulligan, who has experience in auto finance explains the nitty-gritty:

When you finance a car through a dealership, there are two rates, the one they buy the money at, and the rate they sign the contract for. Let's say you're approved for 5%, and the dealership then sets up your paperwork at 7%. The dealer is paid the difference from the bank. If the dealership writes the loan at 5%, there is usually a flat fee of between $100 and $250 for putting the loan together.

So, if you pay cash, the dealership actually makes less profit on the sale. If you buy the car for $200 over invoice (ignoring any other profit items), and you don't finance, the dealer gets $200. IF you buy the car AT invoice, and finance it, and the dealership can hold a point or two on the rate, the profit can be a thousand or more depending on how much you're financing.

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2.) There's a super secret "holdback" amount that the dealer gets to sell the car, and I can negotiate under invoice to get it

Suggested By: Graymulligan

Why it's a myth: Dealers will try and get you to leave with a new car, and its in their best interest to get a good sale, but that doesn't mean that salesmen have some price they're keeping hidden away and all you have to do is know some secret trick to expose them to get the best deal possible.

Things are plainer than that, as reader Graymulligan explains:

In the case of our dealership, we didn't buy our cars, we "floorplanned" them through GMAC. Essentially, for the sake of argument (these numbers aren't right, but its simpler with whole numbers), we paid 1% of the cars MSRP to GMAC every month so that we didn't have to pay the full amount of the invoice to buy the car from General Motors. When we sold the car, we received 3% of the MSRP as a floorplan allowance.

So...and you've probably already figured the goal out here...if we sold cars in less than thirty days from when we got them, we got a check for 3%, and only paid 1%. Sell it from 30-60 days, and we'd get 3%, and pay 2%. 60-90 days, break even. So in theory, a fresh car off the truck could sell under invoice. But, in "dealer think", it's a fresh car, so they're less likely to take a loss selling it, because someone else will come along and buy it.

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1.) I can trick the salesman into a better deal with my secret plan

Suggested By: Phlip425

Why it's a myth: The car salesman has seen it all, and you're not going to freak him out with some scheme or ploy. You might think you can fool him into selling you a car at a lower price because you're bluffing that you're not interested. You might think that acting like you're about to walk away on the car is going to get you a better deal.


Don't be a dick, make your interest in the car known, make it clear that you're a responsible, mature buyer and things should go smoothly. Come prepared and come informed, but don't come delusional.

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