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Jun
2021
19

Shopping for a Car Online? Beware of This Potential Price Scam

I just bought a used car, which required a lot of research on car-shopping sites like AutoTrader, Cars.com, CarGurus, Edmunds, and TrueCar. Before I settled on a vehicle and a dealer, though, I got excited about several promising listings. Until I read the fine print.

I discovered a deceptive advertising practice you should be aware of before you go to a dealer: the promotional “Internet Price” (after down payment), which can inflate the asking price of the car by up to $2,000.


The Price After Down Payment

Here’s how it works. A car is listed on the dealer’s site or a car shopping site with a promotional “Internet price.” Buried in the listing, or perhaps on the dealer’s website, is a caveat: “Internet Price is reflective after 1995 down payment.” In other words, the actual asking price at the dealer is whatever it was listed for online, plus another $2,000. Unless you look carefully for it, you won’t even know until you sit down to discuss pricing.


Empire Honda listing

This isn’t a typical tactic, and most online dealer prices I saw matched their asking prices. In some cases, they were declared to be “Internet prices” and the dealer asked that you print out the listing to get the price, but that was it. However, I found two dealers that tack on the $2K: Empire Honda of Manhasset, NY and Motorhub, Inc. of Inwood, NY.

Empire Honda obfuscates the extra $1,995 by mentioning it in the fine print of the listing but not putting a dollar sign or comma, so it doesn’t stand out like its declaration of a $695 dealer and documentation fee. To its dubious credit, Empire Honda at least puts this warning in its listings on sites like AutoTrader. That credit is lost when all of the listings on its own site simply say “Finance for,” with no sticker price outside of MSRP at the time of the vehicle’s production (for used vehicles; the dealer’s new vehicle listings don’t do this).

On Motorhub, Inc., I found no notification of the price being reflective after a down payment anywhere on its shopping site listings, which use the posted, post-deposit price for any on-site financing calculator estimates (which factor in down payments as part of the price). The warning isn’t even in the text of the car listings on its own site. Instead, it’s hidden near the bottom of the page as part of the site disclaimer.


Advertised Price vs. Actual Price

I contacted these dealers as a prospective shopper and confirmed that the asking prices of the vehicles I was considering were actually $1,995 more than the posted price. During these exchanges, I prodded the sales representatives I was talking to about whether the price could be talked down, and mentioned that they could be considered deceptive business practices. No go; the price was the price.

This was over the phone and via email; to be fair, it wasn’t at the over-the-desk phase