CAR DEALER SCUMBAGS: 70 Years of Greed, Lies, FAKE FEES & Add-Ons: Kevin Hunter The Homework Guy

Here's some proof that dealers have been scumbags for more than seven decades and how you beat them. If you've ever felt like car dealers were playing you, you're not imagining things. We knew eventually we'd have to do this show because over the years car salesmen have come on our channel saying, "You guys are giving us a bad reputation." The problem is they have no clue about their own past. Gallup's trust polls have ranked car salespeople at or near the bottom of honesty and ethics since they first started doing the poll in the 1970s. To you dealers out there, you've earned all on your own every disparaging word ever said about you. Today, we're rolling out how the dealer playbook evolved since 1950, and we'll hand you a simple plan to beat it. So, buckle up. We're going to time travel through the biggest dealer tricks. The dealer prep fees, payment packing, yo-yo financing, addendum stickers, extended warranties, and yes, the pandemic era, where the market adjustment became the favorite two-word excuse to screw you by raiding your wallet. At the end, we'll give you the exact phrases to use, what to put in writing, and how to walk away with your money and your dignity still intact. >> Starting up the 1950s to 1970s, the fee that started it all. Let's start old school. In the 1950s and60s, dealer prep appears. Mysterious charges for preparing your car. What did that mean exactly? Wash it, fuel it, peel the plastic, maybe check fluids. In other words, overhead. The kind of thing any normal business bakes into the price. >> That's right. Then in the mid70s, bring the Magnes Moss Warranty Act. It tightens warranty disclosures and consumer rights. Dealers adapted fast. They don't stop selling you protection, they just rename it. True manufacturer warranties are included in the price, but the finance office begins pushing third-party vehicle service contracts, still calling them extended warranties. It's the same scare tactic. Big repair bills under a different label with far fewer protections. >> Next up, the 1980s payment packing and term creep. Welcome to the birth of monthly payment traps. What monthly payment are you looking for? They'd ask. It sounds harmless until a dealership packs the payment with junk products and stretches your loan term to hit your number. You think you negotiated, but you didn't. You just agreed to pay more for a longer period of time. >> Here's the antidote that still works today. Work on price first, financing second, and paperwork last. If the first words out of the salesperson's mouth are monthly payment, you say quote me the out the door price in writing. We'll come back to the exact script at the end of the show. Next up, the 1990s, the dock fees balloon. The 1990s popularized the dock fee supposedly for administrative paperwork. Some states, like Florida, run off the rails with it, charging thousands. In some states, it's capped. In many, it's not. Two customers pay the exact same dock fee regardless of the vehicle price. That's not documentation. That's profit margin. >> So, don't swing at the dock fee pitch headon. Instead, negotiate the out the door. If the dock fee is outrageous, grind the vehicle price down to offset that. Dealers love to say that dock fees are non-negotiable. Cool. But the price is. At the homework guy, we don't argue over the dock fee as a line item anymore because that's a losing argument. Our professional coaches just reduce the total price and counter offer without it. >> Along come the 2000s. The yo-yo spot delivery trap comes in. The 2000s usher in the yo-yo, also called spot delivery. You drive home before financing is finalized. Then the call comes, "Sorry, your loan didn't fund, come back and sign another deal." Translation here, it's a far worse deal. They wanted you emotionally attached to the car first. It's called the puppy dog letting you take it home. So, the number is hurtless. >> So, never take delivery until the financing is approved, it's finalized, and it's in writing. If they stop to call you back to resign, just stop. You sit down only after you see the original sign numbers, and you're free to return the car if they won't honor them. The yo-yo relies on you to panic, so don't give it any oxygen. Then in 2010, the online bait, addendum stickers, and mandatory junk. The 2010s look like consumer paradise, listings online, instant quotes, internet prices. Then you meet the addendum sticker on the window. nitrogen tires, vin etching, propack, paint and fabric packages, maybe even a market adjustment line before that term went mainstream. Do you remember people paying well over MSRP for the PT Cruiser? You remember that? That was absolutely insane. >> I remember that. That thing is a bucket of bolts. If a dealer says any add-on is mandatory, ask for it in writing. Specifically, mandatory to the purchase of this vehicle. Watch how fast the story changes. It's amazing how quickly mandatory becomes optional when it has to survive a line of questioning. >> Then 2020 and 2022, the pandemic. This was the take it or leave it era. >> Totally. >> Now the chapter many of you messaged us about during this time. This was the pandemic. Dealer lots go empty. Supply chains crack. Production slows. And overnight market adjustment becomes the license to print money. And that was your money, friends. We saw $3,000 to $20,000 and even more slapped above MSRP on ordinary vehicles. Take it or leave it was the line. Some stores wouldn't even take a call without a non-refundable deposit. Many refused to sell at MSRP, especially on hot models. And if you said, "I'm paying cash." They shoved you to the bottom of the list because they wanted that back-end finance profit really bad. >> Way down to the bottom of the list. And it wasn't just prices we're talking about. We saw forced add-ons tied to the sale. Protection package required. Etch required. It's already on the car. They'd say, "We can't take it off." Dealers told buyers the market was so hot that consumer choice didn't matter anymore. The old tricks, payment packing, dock fee pumping, addendum junk didn't disappear. They just became turbocharged instead. >> And here's the real sting. As inventory normalized, a lot of those bad behaviors just stuck. Some stores kept adjustments and bundles because they trained customers to expect them. And that's why we hammer the same basics today. From home, get an out the-do price in writing. Compare dealers. Never lead with I'm paying cash and get preapproved away from the showroom. The pandemic didn't invent bad behavior, but it certainly exposed it and caused it to grow. >> In 2023 to 2026, the hangover, old habits die hard. We're past the worst inventory crunch, but the playbook remains. Dealers are still pushing finance over cash, still milking those blasted add-ons, and still allergic to writing down numbers up front. You hear new words, market scarcity, dealer installed, value package, but the function is the same. Extract profit margin where buyers aren't looking. And we still get DMs from buyers who thought extended warranty was factorybacked when it was in fact a third-party service contract marked up thousands of dollars and finance at the rate of the car. Remember extended warranty is marketing. You need to ask who's the administrator? What's excluded? What's the deductible? What's the cancellation refund schedule? If you really want it, buy it at cost or skip it. >> All right. So, really quickly on these vehicle service plans, many times dealers just give you a pamphlet, which actually isn't the contract at all. So, if you should ever buy a vehicle service contract, make sure you're actually getting the contract, not just a little flyer that goes along with it. Now, here's how you beat the dealer in plain English. Let's turn all of that history into action. Here's the Homework Guy four-part plan that works in today's car market. Number one, OTD is everything. You say it's OTD or we're done. from the comfort of home. Ask for the out the door price in writing before you visit. We tell you how to do it right on our website. It's a vehicle price, tax, title, every fee, and every add-on. No clean OTD, no trip to the dealership. See our free blog on how to do this. We'll put a link in the description box down below. >> Number two, don't say, "I'm paying cash." I know it's funny that this still shocks people. Lead with cash and you'll lose your leverage. Dealers want that financing profit because you know what? It's a lot. The smart move is get preapproved with your credit union or bank and see if the dealer can beat that rate. And if there's no prepayment penalty, you can just decide later. Cash is a strategy, not a slogan. See our video on the four ways to pay cash for your car. >> Number three, kill the yo-yo. No taking the car until the funding is final and the signed numbers match up. If they pressure you to take it anyway, the answer is simple. Not until funding is finalized and it's in writing. And number four, refuse mandatory add-ons on paper. If anything is required, you say, "Please note mandatory to purchase on the buyer's order. Either it disappears or you just collected exhibit A for regulators." Here are some red flags that mean it's time to walk. They don't email it written out the door. Mandatory add-ons that you didn't ask for show up. The internet price that morphs when you arrive. They insist you take the car today before a funding clears. and they push extended warranty without explaining who the administrator is, how claims work, or how refunds are actually calculated. >> The easiest negotiation is the one where you never start with the wrong store. If they won't be straight at the keyboard, they won't be straight at the desk either. >> You got that right. Let's drill a little bit more into the pandemic era once more because you asked for it. If a dealer still has that market adjustment on a mass market car years later, here's the play. Number one, compare at least three dealers within a reasonable radius. Ask all three dealers for a written out the door on the exact same build. Number two, reply with the lowest competing OTD, not a screen grab that can't be verified, an emailed buyer's order with line items. Number three, if they refuse to budge because of the market adjustment, just say that's all good. Please keep me on your list if your pricing changes and leave. >> That leave hurts them more than you think. Dealers live on throughput and finance profit. Your power is choice. And by the way, during the pandemic, many stores showed their true colors. We saw the rare good actors who honored MSRP and refused to force junk. Those dealers exist. Make sure you reward them today. >> So, here's the dealer's point of view and why you still win. Look, we get the dealer side. Slim new car margins. They have dependence on FNI products. Rising cost to run a business, corporate quotas. But none of that justifies lying, tying the sale to add-ons, or yo-yo tactics. You can run a profitable store without deception. We know because we talked to dealers that can actually do it. >> And here's what the last few years proved. When the market turns, the dealers who treated customers fairly keep those customers. The ones who didn't, they make a quick buck and lost a decade of trust. Some of you remember who gouged you, and you should. >> Here's a mini case study on how a savvy car buyer wins. This is a real car buyer scenario from our inbox. A woman wanting a midsize SUV back during the pandemic. Dealer number one said $49.95 adjustment fee plus paint, fabric, and nitrogen in the tires. Dealer two said MSRP, but forced a $16.95 protection package. Dealer number three, MSRP, no add-ons, written out the doors on the email, and a rate that matched her credit unions. She took dealer number three because she got a clean deal and wrote a glowing review for them. That's how competition fixes nonsense. And for the record, she'd never said, "I'm paying cash." She brought a pre-approval and let them try to beat it. They matched. She was out the door in an hour, not taking all afternoon. So, here's your 60-cond checklist, and you can tape it to your fridge. Out the door in writing before you go. Don't say cash. Bring a pre-approval. Let them beat it if they can. No spot delivery. Funding must be final and in writing if you're getting a loan. Optional means removable. mandatory must be written as such to be believed. Know your walk away. No clean OTD, you're gone. >> Add this. If there's an arbitration clause in your contract, and you have an opt out window, always use it. Follow the instructions exactly and save copies of everything. It preserves your voice if you ever need it. >> So, the final word on all this and why it matters. We're tough on dealers because the stakes are high. For most people, a car is the second biggest purchase of their life. Every old trick we covered today still exists in some form, but you don't have to fall for it. >> At least seven decades of the same old game in a simple counter. It's just clarity on paper. If you remember nothing else from this episode, remember these words, out the door price in writing. That phrase is your shield. >> If today's hit list helped, give the video a thumbs up and share it with a friend who's shopping. If you want pros in your corner against these dealers, our team runs a hassle-free car buying service for new or used cars, leases, and lease buyouts. We negotiate so you win. It's at the homeworkgu.com, the big red button on the homepage. >> And if you've already signed something and you're worried about hidden fees, illegal tying, or contract shenanigans, check out our car deal review by professionals and our legal violation checkup, THG edition. We flag redline items and show you your options fast. To all of you loyal viewers and subscribers out there, you guys rock. God bless you all. I'm Kevin Hunter, the homework guy, signing off on behalf of Alex Stevens, our auto expert, and for the amazing Elizabeth and our entire hassle-free car buying team. Stick around while we scroll through some of our five-star Google reviews. Thank you for watching. 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