MEMPHIS, TN (NBC) - One event convinced me to pay closer attention to car ads: the September 11 terrorist attacks.
After the attacks, auto dealership after auto dealership started producing patriotic sales ads. Each tried to appeal to a sense of duty, a sense of lifting each other up -- and to a commercial, virtually every one of them offered 0 percent financing for five or six years on a car purchase. You know, "...in the spirit of giving and helping Americans make a fresh start in the wake of tragedy," that kind of thing.
Well, my crew and I conducted a little experiment.
Barely two months after the 2001 attacks, I had a credit agency clear an East Memphis man for perfect credit. His credit couldn't get any better. I sent him under hidden camera to shop SUVs at six Mid-South auto dealerships who were advertising 0 percent financing for five years. Even with his perfect credit, all but one of the dealerships insisted on a 3-year limited contract with a $10,000 down payment. That's more than some people put down on a house!
The one that didn't offer a limited contract? It didn't offer any contract. It actually advised him to shop somewhere else!
Tennessee Motor Vehicle Commission offered these guidelines for gauging the truth-in-advertising of car ads:
* Ads for new vehicles must indicate the vehicle's stock number.
* Keep a copy of the advertisement or take a screen-shot and reference it when you have a dialogue with the dealer.
* Call ahead and make sure the advertised car is still on the dealer's lot. Reference the stock number.
* If the vehicle on the lot isn't what is being advertised, steer clear!
* Beware of balloon payments. Balloon payments promise you a temporary low price in order to entice you into signing a deal. But once you sign, the remainder of the loan is much higher than you thought.
* When it comes to payment ads that focus on how much you'll pay, the ads must include all costs, charges, and any fees payable.
* Avoid dealers who claim, "We are number one in car sales"; "Name your own price" or "Lowest price in town!" Those are unsubstantiated and misleading claims, and they are prohibited.
* All ads must identify the dealer by its business name or its state-issued dealer license number.
* Consumers should only buy a vehicle from a licensed salesperson or motor vehicle dealer.
* Before you buy, visit verify.tn.gov to check the license status of the salesperson or dealership. For Mississippi and Arkansas, Google your state's name plus the words "motor vehicle commission" to find your state's agency. In Mississippi, the Mississippi Department of Revenue regulates used car dealers.
As it relates to zero percent financing ads and offers, here are the gotchas you ought to know about them:
* HIGHER SALES PRICE on the vehicle. Don't expect a lot of haggling either since you're being offered free financing.
* HIGHER DOWN PAYMENT
* HIGHER MONTHLY PAYMENT
* MAKE AND MODEL RESTRICTIONS. Sometimes, you can't get zero percent financing on a certain make or model.
* NEAR PERFECT CREDIT REQUIRED. If you don't have it, don't bother.