New car ad slogans: Too good to be true

The adage, "If it sounds too good to be true, it probably is," goes double for new car advertising.

The typical car dealer newspaper or radio ad blares out in large headlines or in a loud 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 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."

By the way, the experts advise, the ads often will give you a choice between a cash rebate and zero-percent financing. Figure out which works best for you. To help, try our calculator.

"With money as cheap as it is now, buyers should shop around for financing before going to the dealer. You might be able to get a 3 percent rate on your own and still take advantage of the rebate," advises Charlie Vogelheim, executive editor of "Kelley Blue Book."

"$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 anxious to sell cars, he is going to pay you far more than that old clunker is worth. Don't you believe it. If he's paying you too much for your trade-in, experts insist, 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 Bluebook.com or Edmunds.com, which can quickly tell you what your present car is really worth wholesale, as a trade-in, or retail, if you want to sell it yourself.

The opposite of the inflated-trade price trick is when the dealer tries to "steal the trade" by paying a lot less than your car is worth. If you don't do your homework and know the trade-in value of your present car, you could easily think you are getting a good deal. You should also check Edmunds.com or bluebook.com for any rebates and incentives being offered on that particular car in your specific area. Marty Padgett, executive editor and producer for Thecarconnection.com, warns you might find that generous trade-in figure has been shaved off a rebate you know nothing about.

"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 -- depending on the amount you put down and the terms of the loan.

Aside from that simple math, the monthly payment that entices 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 amount down. 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 that price pertaining to only one car on the lot. Or that particular model may be stripped without any of the standard options that most people want.

"Never go shopping for a new car based on a monthly payment," advises Lauren J. Fix, co-host of Talk 2 DIY-Automotive on the Do-It-Yourself Network. "Compare auto models, with the features you want, in the price range you want," she says.

"We'll pay off your old car no matter how much you owe!"
Call this a kissing cousin to pull-it-in, push-it-in, or tow-it-in. Let's say you owe $8,000 on your present car and it's only worth $3,000. When the dealer boasts it will pay off your old car, they're just going to add the payoff amount to the cost of your new car. The new lender -- the manufacturer or another lending institution -- is fully aware that the amount being financed exceeds the value of the new car and therefore will treat it as an unsecured loan -- and will charge a significantly higher interest rate.

"Huge end-of-year sale: must make room for 2005s!"
Dealers like to say this is the biggest chance of the year to save the most money on a "new" car. In some ways, they might be close to telling the truth. It might be true if you keep it for seven years or more -- long enough to drive it into the ground -- and don't figure on getting much for it when you sell it.

However, if you usually sell or trade in your car every two or three years, it could cost you big time. "If you are buying on a short cycle, you are going to get nailed by buying a car just before the new models come out," says thecarconnection.com's Padgett. "Unless there are going to be some major model changes, you might as well wait to buy the next year." Buying a car just before the model year expires means you're buying a year-old car and the depreciation over the first month or so will be far more than the normal depreciation on a new car. Even if there's a good rebate offer, the car will be considered almost a year old when you buy it.

"Buy this car at below-invoice price!"
It's easy to print up phony invoices off of computers these days, so make sure you are getting the real invoice prices. How? Again, both Bluebook.com and Edmunds.com are excellent resources. Don't let the dealer convince you he's selling that car at no profit just because it is at invoice or below. The invoice price does not necessarily mean that's what the dealer paid for it. He may be getting a rebate and he is definitely getting a dealer holdback fee from the manufacturer. This is a percentage of the price held back by the manufacturer when the dealer buys the car and paid to him when he sells it. Depending on the car, it usually ranges between 2 and 3 percent of the Manufacturer's Suggested Retail Price.

Rod Gibson is a freelance writer based in Georgia.

-- Updated: Jan. 20, 2005