A car dealer quotes a monthly payment that fits the budget, the numbers look reasonable, and suddenly the conversation moves toward signing paperwork. That is exactly where buyers need to slow down, because a monthly payment can hide what actually sits inside the loan. In a recent case, the Federal Trade Commission accused three Texas dealerships owned by Asbury Automotive of using a tactic called “payment packing,” in which customers agreed to a monthly payment higher than necessary, and the dealerships allegedly used the difference to add unwanted products to the contract.
The allegation sounds complicated until the basic trick comes into focus: focus the customer on the payment instead of the price. A few dollars here and there can make an expensive add-on feel almost invisible when someone thinks only about what comes out of a checking account each month.
