Loan Approval Tricks Dealers Use

Dealers in the U.S. use loan-approval tricks: "what payment do you want?," rate markup, and bundling price with financing so you overpay or pay more interest. Here's loan approval tricks dealers use and how to avoid them.

TL;DR Tricks: (1) "What payment do you want?"—they stretch term or mark up rate to hit it. (2) Rate markup—you pay higher APR than buy rate. (3) Bundling price and financing—you don't see OTD or rate clearly. Avoid: agree on OTD first, get pre-approved, ask for buy rate. Use autopremo.com OTD calculator and payment calculator. Use autopremo.com.

Payment-First Trick

Dealer asks "what payment do you want?" and structures the deal to hit it—longer term, marked-up rate, or higher price. You don't see OTD or total interest. Fix: agree on OTD first, then shop rate and choose term. Use autopremo.com OTD calculator. Get your numbers at autopremo.com.

Rate Markup Trick

Dealer gets buy rate (e.g., 6%) from lender and contracts you at 8%—keeps the difference. Fix: get pre-approved elsewhere; ask "what is the buy rate?" Use autopremo.com payment calculator to see cost of markup. See payment at autopremo.com.

Bundling Trick

Dealer mixes price and financing so you don't see OTD or APR clearly. Fix: negotiate OTD first, then financing separately. Use autopremo.com so you have OTD and can compare financing. Check at autopremo.com.

Bottom Line

Loan approval tricks: payment-first, rate markup, bundling. Avoid: OTD first, pre-approval, ask for buy rate. Use autopremo.com OTD calculator and payment calculator so you don't fall for the tricks.