Everything Car Dealers Don't Want You to Know

May 1, 2026

Car buying remains consumers most problematic purchase in 2026. Too many consumers are consistently overcharged by $500 to $5,000 when they buy or lease a new or used vehicle. Why? They don’t have an advocate to protect their interests. If you buy a $30,000 (the avg price of a used car in 2026) piece of property or a $50,000 (avg price of a new car in 2026) house you would have two advocates protecting your interests: a realtor and title company/real estate lawyer. Both charged with assuring you are not overcharged or treated unfairly. But when it comes time to buy or lease a new or used vehicle for $30,000 to $100,000 its buyer beware- every man/woman for themselves!

Car buying is the most complex, big dollar transaction most people will ever undertake. The dealership sales process is time consuming, confusing, risky and, sometimes, just plain by design. Dealerships are like casinos, the longer you sit at their tables, the more you spend and the house makes. Dealers price people, not products. Everyone who buys the same model Vizio TV at Best Buy pays the same price. Everyone who buys identically equipped Toyota Camrys pays a different price. Dealers spend billions annually on training their staff on how to extract the maximum profit out of every customer. Walk in unprepared, and you will pay too much. Full stop.

How do you protect yourself when car buying? It starts with an understanding of the scale and scope of vehicle purchase. Car Buying includes buying or leasing a new or used vehicle, trading or selling your current vehicle, securing financing, aftermarket products, and a major cost too many people ignore until it’s too late, insurance coverage. If you’re shopping for the average priced new vehicle that means $50,000 plus taxes, title, license and government fees for about $54,500. Now add a $10,000 to $20,000 trade-in or vehicle you’ll sell to CarMax, Carvana or a private party. Spoiler alert: selling a car to a private party is the riskiest transaction of all. More on this at a later date. Now consider the cost of financing- assume a $10,000 down payment subtracted from $54,500 which leaves an amount to finance of $44,500. A 6% interest rate means 60 payments of $830.31 for a total of $51,619. This assumes you weren’t tricked or bullied into paying dealer fees of $250 to $2,995. Plus, whatever you’re paying to insure your 5 to 7 year old $10,000 vehicle the cost of full coverage insurance on a $50,000 vehicle you lease or finance, can easily cost you 2x or more than your current policy.

Step 1: Get properly prepared so you can be confident you’re getting a fair price on all components of the transaction. Start with assessing your financial vital signs, the 3 C’s: Character – FICO score, Capacity – debt-to-income ratio, and Collateral - LTV (loan-to-Value). All lenders rely on your 3 C’s as the foundation of their underwriting of your auto loan. Your FICO score can be found in many places, we recommend www.creditkarma.com as it’s free and they also can help if your credit report has errors or outdated information. Do this first as your FICO score tells a lender how you pay. Capacity is basic math; add the minimum payments for all of your household’s outstanding loans (debt) including credit cards, auto, mortgage (or rent) student loans, Home Equity or any personal loans and divide by your gross (before taxes) monthly income. If your minimum payments totaled $3,000 and your total income is $9,000 (before taxes), your debt-to-income is $3,000/$9,000=33%. Lenders are looking for less than 35%. More is not a no but would likely increase your rate as a lender tries to balance risk and returns. As for the LTV (loan-to-value) of your transaction, it is the total amount financed (after your trade and downpayment) divided by the invoice amount for new or clean wholesale book for used. Using the example above, financing $44,500/$46,000 estimated invoice on a $50,000 new car translates to $44,500/$46,000= 96.7% LTV. Target is to always be less than 100% but like debt-to-income it is not a hard no but likely a higher rate to balance risks and returns.

Step 2: Get competitive bids on your trade. Your two best bets are Carvana and CarMax- visit their sites and follow the steps to upload pictures and details about your car. You should also check CarFax to see what they say the value of your trade-in is. The other consideration is to check with your state DMV site to see if they tax a vehicle sale based on the sale price or trade difference. If trade difference it is most likely you’ll save by trading in.

Step 3: The single most important tactic to save you money and time is to negotiate remotely. To get a clear picture of your entire transaction, protect yourself from being pressured to “buy now,” and identify any hidden dealer charges and fees. Once you’ve identified the vehicle you’re interested in, send an email requesting an Out-the-door (OTD) price. (OTD) price means that if you walked in with a check in hand for that amount you could sign and drive the vehicle out the door. OTD is the sale price less all incentives plus tax, registration and license. You don’t have to commit to a purchase for the dealer to realize you’re ready to buy.

Taking Control: Being well prepared shows them you’re ready. This starts with the quality of your initial email: which vehicle(s) are you interested in, what vehicle(s) do you currently own (this could impact available incentives), when do you plan to buy (urgency gets them to act- next week doesn’t exist in a salesperson’s mind), what numbers you want to see. Long story short, you want complete transaction detail including sale price (MSRP – Discount), taxes (include the county you live in so they can calculate the correct sales or use tax), Fees (beware the Doc or Documentation fee- can be as high as $995 to complete the transaction- Imagine if the cashier at the grocery store charged you a $25 checkout fee-HA!), Total Amount Financed, interest rate, term, and monthly payment. Shameless plug: our Car Buyer’s Gameplan includes the tools you need to efficiently navigate this route- we’ve written email templates that are proven to get attention, deal calculators (to verify a dealer’s offer), Offer calculators (what you should offer) plus debt-to-income and Loan-to-value calculators to help update your vital signs.

Step 4: Make sure you ask them to provide line item detail for all costs (fees) that comprise the total OTD price. Negotiating remotely gives you home field advantage and allows you to avoid buy now pressure. When it comes to evaluating the OTD price look for any dealer fees they’ve added to the price. You have to pay government fees like taxes, registration, license but not dealer fees like Documentation or Admin Fees, Nitrogen added to your tires, or any other dealer packages. These often include paint coatings, known in the business as “mop & glow,” or many others.

The Federal Trade Commission (FTC) requires car dealerships to include all mandatory charges, including documentation ("doc") fees, in the advertised price of a vehicle. As of March 2026, the FTC is aggressively cracking down on deceptive, low-ball advertising that adds hidden fees later, warning that "all-in" pricing is required to avoid violating federal law.

Key FTC and Regulatory Positions on Doc Fees:

Advertised Price = Total Price: Advertised prices must reflect the total amount a consumer must pay, excluding only government-mandated fees (tax, title, license).
Mandatory Fees Included: If a doc fee is charged to all customers, it must be included in the advertised price, not added on in the fine print.
Targeting Deception: The FTC sent warning letters to 97 dealership groups regarding deceptive pricing and hidden fees in early 2026.
Industry Scrutiny: The FTC acts against unfair or deceptive acts under Section 5 of the FTC Act.
Negotiation: While dealers may claim fees are fixed, some fees, including high doc fees, may be negotiable in some states. The best strategy is to negotiate the total out-the-door price.

FTC Warns 97 Auto Dealership Groups About Deceptive Pricing | Federal Trade Commission

Each time a dealer presents your deal it must include sale price, trade allowance (if applicable), sales tax, license, registration plus any and all additional fees in detail for a total amount due (cash) or amount to finance. Then and only then can you determine if you’re being overcharged. One suggestion here, pull out and review your last lease or purchase contract & bill of sale. You might find that you overpaid. If you can’t identify what comprises each line item of costs you overpaid!

WARNING: Do not sign any electronic documents until you have reviewed printed copies of all docs to verify each and every charge! Skip this step and you’ll spend too much!

What will it take to bridge the gap between the dealers’ demand for a lengthy showroom visit and a consumer’s desire for a more transparent, contemporary experience? The answer is teaching consumers how to buy or lease a new or used vehicle like those of us who’ve made a living in auto retailing- to buy like a Pro. First and foremost, negotiate your entire deal remotely. Don’t head to the dealership a moment before you verify your complete transaction- sale price, incentives, financing, interest rate, term, sales tax, license, registration, and all fees for your total amount financed. With a lease you’ll need the money factor (lease rate), residual value, your purchase options at lease end, fees (acquisition fee, disposition fee at lease end), security deposit, license, registration, and any other fees. Once you receive these numbers from the dealership, you need to verify them.

Consumers need to understand that companies like True Car, Car Guru’s, and Invoice-Pricing.com don’t solve consumers’ problems, they exacerbate them. Each of these companies derive their revenue by enticing you with pricing info, only to turn around and sell your name, email, cell # & more to a dealer or dealers as a “hot” sales lead. Nothing is free- so now you are barraged by emails and calls begging you to come to the dealership.

The good news is that Thornebriar has solved this problem with its comprehensive Car Buyer’s Gameplan. It details the proven step-by-step path to purchase and includes the tools necessary to manage and verify your deal including offer/deal calculators, email negotiating templates, and transaction specific deal checklists (purchase-new, lease-new, purchase- used, etc.) that auto industry professionals use. For the price of lunch for two at Mickie D’s take control and forever change car buying.

Visit us at www.thronebriar.com/pages/buy-a-car to learn more and read our past blogs

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