A car buying consultant has gone viral on TikTok after pointing out a common mistake made when negotiating with a car dealership—revealing your down payment too soon.
The TikToker, whose username is @BillyTheCarKid, shared his advice in a video posted on Tuesday. He starts by asking a question many prospective car buyers have: “Should you tell the dealership that you have a down payment, and if so, should you tell them how much?”
Billy thinks not. He continues, “There’s two reasons why I would never tell the dealership, until I have to, what my down payment is.”
Reason one? He claims the dealership will pump the numbers up to boost their profits. “The number one reason is until I’ve seen final numbers from the dealership, I have no reason to believe that they’re not going to put extra fees or accessory packages and fluff on the price to eat up my down payment because they know I have it.”
Billy then gives a hypothetical situation of how this price hike can go down without buyers realizing they’ve gotten swindled. “Let’s say you went into the dealership looking at a $30,000 vehicle. That was the sale price, and you’ve never seen an itemized final breakdown with your taxes and fees. You’re just assuming it’s going to be a little bit more than the $30,000. Somewhere during your test drive, you tell the salesperson that you have a $10,000 down payment and pretty good credit. Now, if this guy’s a shade-ball, all he has to do is go back to his manager before you get the final write-up and tell them, ‘Hey, they’ve got 10 G’s down, and they have excellent credit. They’re gonna get approved for this vehicle at $30,000, so we can steal some of their downpayment.’ And by ‘steal,’ I mean add accessory packages and heftier fees on the final bill that eat up all of your money.”
He continues on to the second reason for not leading with your down payment. “Number two is really simple. If I’m trying to wheel and deal and use my financing as part of my leverage to get a discount on the vehicle and they already know that I’m putting a massive downpayment down, there isn’t much meat on the bone for the financing.”
Explaining further, the TikToker notes, “The dealership gets paid on the size of the loan. So if you tell them that you’re cutting the loan in half, you’ve taken half their profit basically, that they were potentially getting paid on, away.”
And when should you tell the dealership about your down payment? Billy says, “What I like to do is let them run my credit and the entire deal that I have negotiated with nothing down, still under the illusion that I’m not putting any money down.”
But why? He says, “Traditionally, the dealership is going to come with really high rates, no matter what I tell them. $10,000 down, $20,000 down, nothing down—they’re gonna come back and say we only got you a 7.2 or whatever bullcrap rate they’re going to tell me.”
@billythecarkid Those of you putting a sizable amount of money down on your next auto loan, this post is for you. #carbuyingtips #carbuyer #carbuyingsecrets #carbuyingmadeeasy #carbuyingadvice #carbuyingservice ♬ Aesthetic – Gaspar
“This is an excellent time to say, ‘Maybe I just need to put a little bit of money down. Let’s put $10,000 down and see if that gets us down to the 5.99 that our credit union was saying they could get us.’ Sometimes, this just puts the nail in the coffin, makes the finance guy realize, ‘I’m gonna go somewhere else if you don’t get real,’ and they just give you your rate.”
He finishes the video off with a final note to those who may have been swindled by car salespeople. “In the end, don’t forget, if you ever took a really crappy finance rate and you smelled something fishy, you can simply refinance it right when you walk out the dealership door. So don’t fall victim to thinking that you have to keep a seven or eight percent with a great credit score and a bunch of money down because the dealership said so. It’s usually a lie.”
The video has since gone viral, accumulating over 1.3 million views. Commenters conveyed their frustration at the state of the industry, with one saying, “Buying a car shouldn’t be this difficult.” Others suggested buying a car through Costco.
This isn’t the first time car dealerships have been accused of shady business practices—in fact, it seems to be a widespread thing. In March, the Daily Dot reported on a thread shared on Reddit’s R/YouShouldKnow community that breaks down methods car salespeople use to boost their profits at the expense of your pockets. In another viral video, a car salesman called out alleged illegal business tactics that are popular in the industry—and commenters are saying they’ve fallen for it.
The Daily Dot has reached out to @BillyTheCarKid via TikTok comment.
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