auto

Beware bogus advertising slogans

The adage, "If it sounds too good to be true, it probably is," goes double for new-car advertising. The typical dealer ad in the newspaper or on the radio blares out in large headlines or in high pitch why you need to rush down, right now, and buy at prices and incentives you'd be crazy not to take advantage of.

Unfortunately, too few people read the small print at the bottom of the newspaper ad or listen to the so-fast-it's-gobbledygook at the end of the radio commercial. If they did, they would better understand some of the traditional advertising gimmicks dealers use and what they can really mean. Here are some of our favorites:

Zero-percent financing: That is what you read in large print. In tiny print, you'll find a phrase such as: "With approved credit,'' or "All financing subject to credit approval.'' To qualify for zero-percent financing, you must have a high FICO credit score, which means 700 or above.

We'll give you $4,000 for your trade no matter what the condition: This ad is infamously known as the "push-pull-or-tow-it-in" concept, which dates back to the 1950s. If you believe this ad, you have to believe the dealer is so stupid and so eager to sell cars that he is going to pay you far more than that old clunker is worth. Don't believe it. If he's paying you too much for your trade-in, he's adding that and more to the price of the new car and taking away your negotiating power at the same time. The best defense to this ploy is to become aware of the value of your car through such Web sites as Kelley Blue Book and Edmunds.

Buy it now for just $189 a month: When you see or hear an ad like this, you can substitute just about any figure you like, because no matter what the total price of the car, you can make your payments come out to any figure. You can make it $10 a month if you juggle the amount you put down and the terms of the loan. And besides that simple math, the monthly payment that's enticing you could be a lease amount, which involves annual mileage restrictions and money down at the beginning or end of the lease. Or the really small print may specify a huge down payment. Even if it's an offer with nothing down, it will be based on your credit. If you don't have excellent credit, the payments will be higher. It also can be a form of the bait-and-switch tactic, with the price pertaining to only one car on the lot. Or that particular model may be stripped, without any of the options most people want.

We'll pay off your old car no matter how much you owe: Call this a kissing cousin to push-pull-or-tow-it-in. Let's say you owe $8,000 on your present car and it's worth only $3,000. When the dealer boasts it will pay off your old car, it doesn't mean you're going to get $8,000 deducted for your trade: it means the dealer is just going to add the $8,000 to the cost of your new car. It gets even worse: Because the new lender -- the manufacturer or another lending institution -- is fully aware that the amount being financed exceeds the value of the new car, your loan will be treated as an unsecured loan and will carry a significantly higher interest rate.

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