3 Simple Ways To Weed Out an Overpriced Car Before You Buy
Buying a car should feel exciting, but between test drives and paperwork (not to mention pressure from a sales rep), it's hard to know whether you're paying too much before you get behind the wheel. Of course, the worst time to discover you got ripped off for your new ride is after you're already home, without even realizing it.
Between MSRP, dealer markups, hidden fees and other sneaky financing tricks, it’s easy to lose track of what a car is actually worth. Fortunately, Zach Shefska, president and CEO of CarEdge, shared several insider tips for honing your car-buying skills and intuition. With careful research and preparation, he said, you can spot a bad price almost immediately.
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Here's what you should pay attention to if you want to avoid being taken for a ride:
1. Focus on the Out-the-Door Price (Not Monthly Payments)
If you are focused on the monthly payment and the full price, you may be setting yourself up for uncomfortable financial situations in the future. This is a classic dealership tactic, and one of the fastest ways to overspend. In other words, lower monthly payments can hide higher purchase prices, longer loan terms and much more interest paid over time.
Shefska said negotiating based on that number doesn't benefit buyers in the long run.
"Loan term length and APR can greatly influence the monthly payment without yielding a better selling price," he explained. "If your payment goal is $500, a dealer can get you there -- you just might end up with a 10-year loan. That's the issue with payment shopping."
Instead, shoppers should always focus on the out-the-door price -- the total cost of the vehicle, including dealer fees, add-ons and taxes. Shefska described it as the price you'd pay if you wrote a check that day. If a dealer repeatedly steers the conversation toward monthly payments, Shefska recommended redirecting it back to the out-the-door figure.
2. Watch for Add-Ons and Hidden Fees
For many shoppers, no dealership visit is complete without an upsell attempt. Shefska advised reviewing contracts carefully and asking questions about unfamiliar charges.
Watch for inconsistencies between what's listed in the contract and what was discussed during negotiations or advertised online. Dealers often tack on add-ons like paint protection packages, window tint and more, which can add $500 to $2,000 (or more) to your final price — and they’re often negotiable.
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CarEdge highlighted common add-ons that can spike prices without providing meaningful value, including:
Vehicle prep fee
Dealer prep for delivery fee
Pre-delivery service fee
Pre-delivery inspection fee
Reconditioning fee
Additional destination fee
Cash upcharge
Shefska also encouraged shoppers to push back on add-ons such as nitrogen tire fills, VIN etching and LoJack, which are typically high-margin items for dealers but offer little real benefit to most buyers.
3. Know the True Market Value (and Market Conditions)
One of the fastest ways to avoid overpaying is to compare the price against real-world data. Tools like Kelley Blue Book can show what people are actually paying by providing a fair market range based on transaction data.
Knowing whether you're getting a good deal starts with understanding the market. Market conditions dictate price and negotiability, high demand and low supply for a particular model can limit your ability to negotiate. If you're facing the opposite scenario, however, you could drive off with a much better deal.
"So how can someone tell instantly? They need to understand the market conditions first, and then answering the 'Is this a good deal?' question becomes easier," Shefska said. "We obviously recommend our research resources on CarEdge.com, but there are plenty of other options out there, too."
Laura Bogart contributed to the reporting for this article.
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This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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