Car Shopping? Beware of Graduated Payment Plans Offered by Auto Dealers
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January 15, 2016

Shopping for a new or used vehicle? Steer clear of car dealerships that offer 'graduated payment plans' to lure unsuspecting customers in the door.

Through a variety of advertising platforms, including print ads and paid programming spots on television that are often aired late at night and on the weekends, these dealers will advertise vehicles that can be purchased with "no money down" and exceptionally low monthly payments.

For many consumers, especially those with low income that are desperate to get into a new vehicle, these deals may sound too good to pass up. One thing that the advertisement doesn't make so obvious is the fact that after just a few short months, the monthly payment skyrockets.

For example, while a monthly payment of only $189 with no money down may sound like a great deal, unless you read the small fine print that is quickly flashed on the screen or can understand the fast-talking salesman, you may not realize that after three months the payment goes up to $350 or more.

The primary goal of the dealer is to get you in the door and behind the wheel, and many are willing to use whatever sneaky sales tactics it may take to close a deal. Oftentimes, the terms and conditions thrown at you by a salesman at the dealership are completely different from what you may have seen or heard in an ad. Across the country, unsuspecting consumers are being talked into buying cars that they simply can't afford.

If you are in the market for a new vehicle, do your research! Don't fall for the gimmicks of desperate car dealers and rush into making a purchase before you fully understand what you are signing. If you're considering the purchase of a vehicle, remember these tips:

Shop Around. Make certain that you are choosing a reputable car dealership. Asking friends, family members and co-workers for recommendations is a good place to start.

Know what you want. Don't simply settle for a vehicle because you think you're getting a good deal. Choose a vehicle that meets the needs of your lifestyle.

Make a budget. Budget your monthly expenses and determine how much you can actually afford to pay each month for a car. Many credit unions offer car buying services that will assist you in finding a vehicle and selecting the right financing plan. Check with your local credit union to find out more!