7 ways car dealers make you pay extra

Narrated from Consumer Reports:

Your goal is to get the best car at the best price.

Mixing negotiation - Salespeople like to combine the vehicle price, trade-in, and/or financing negotiation, often asking you what you can afford to pay per month. This gives them more latitude to provide a favorable figure in one area while inflating figures in other areas. In the end, this could cost you more overall.

Avoid this trap by negotiating one thing at a time, starting with the price of the car. Approach this as if you were paying cash, with no trade-in. To get the best deal, you should go in with a starting price thats based not on the vehicles sticker price but on how much the dealer paid for it.

Make it clear to the salesperson that you want the lowest possible markup over your starting price, and that youll visit other dealerships selling the same vehicle and will buy from the one with the best price.

0 down, 0 interest, 0 payment for the first year - Be sure you know what the interest rate will be after the first year, and compare with rates that are currently available. Keep in mind that many buyers dont qualify for zero-percent loans and other low rates. Knowing the current rates can also help you avoid being talked into a rate thats higher than what you could get elsewhere.

Lease a car - Many leasing customers assume that the monthly payment the salesperson quotes is a nonnegotiable figure. Thats not true. The figure is often based on a vehicles sticker price with no discount, and can be negotiated just as if you were buying the car. In fact, to keep the transaction simple, you can negotiate the vehicle price before mentioning that you want to lease.

Other negotiable lease items include the down payment, annual mileage limit, and purchase-option price. Just as when buying, you can have dealers compete against each other, giving your business to the one that offers you the best deal.

Financing - Dealers like to arrange the financing for your vehicle because it gives them another source of profit. But the interest rate they offer may be higher than you could get elsewhere. Dont make financing a purchase-time decision. Before visiting the dealership, make sure you know how youll pay for the vehicle. Call ahead to find out what the dealers rate is, and compare it with what you could get from banks, credit unions, or other lending institutions. If you are preapproved for a loan, you can keep the financial arrangements out of the negotiations.

Knowing your credit score can also protect you if a disreputable dealer tries to give you a higher interest rate than you deserve. Any score over 700 should ensure you the lowest rates.

Add-ons and options - Salespeople will sometimes try to make up for a low price on a vehicle by talking you into a lot of optional equipment. Do your homework, so you know what options you want and which you can live without. Many options are available separately, but others can only be bought as part of a package. Consider these carefully. Option packages can make you pay for features you dont need to get a few you want. Its best to choose a vehicle trim level that gives you most of the options you want, then add other options separately. If a model doesnt have the features at the price you want, consider another.

Other extras gimmicks - fabric protection, rust protection, etc.

Extended Warranty - Consumer Reports does not recommend buying an extended warranty unless you plan on keeping a trouble-prone vehicle for an extended time after the original warranty runs out. Most manufacturer warranties are sufficient, with bumper-to-bumper coverage of at least three years or 36,000 miles and powertrain coverage thats often longer. If you want an extended warranty, ones offered by the auto manufacturer are typically better than those offered by third-party companies.