Wednesday, January 27, 2010

Do Car Ads Prove that People Want to be Fooled?

Recently I combed through some ad fine print to show that some cars were more expensive than the ads made them seem. Yet another car ad reveals more of the same and I’m starting to wonder whether people are genuinely being fooled or whether they want to be fooled.

This time I was looking at an ad for GM cars. The top car showed the price $16,498 in large font. However, the fine print says that the MSRP of the actual car pictured is $19,925. I can’t tell if that is before or after some “cash credits”. Here are a few more fun bits in the fine print:

“Dealers are free to set individual prices.”

“Insurance, license, PPSA, administration fees, and applicable taxes are not included.”

“At some dealers, the vehicles in this advertisement are only available with additional features of
glass etching (up to $424),
locking wheel nuts (up to $150),
nitrogen in tires (up to $399),
GM tire protection plan (up to $220),
mud flaps (up to $120),
box liner (up to $325),
Walk Away insurance (up to $389) and/or Drive Green program ($199) which have additional costs.”

All this is baffling enough that I have no idea of the car’s real price other than I’m pretty sure it’s more than $16,498.

One of the previous car ads had twice-a-month pricing, but GM does this one better with bi-weekly pricing. Instead of advertising payments based on 12 payments per year or 24 payments per year, GM uses 26 payments per year. I bet that daily deductions from by bank account would be pretty small.

To be fair, some people would appreciate payments synchronized with their pay cheques if they are living with almost no cash buffer. However, it seems that this car will cost more than the $105 every two weeks shown in the ad.

This brings me to the question of whether people are actually fooled by all this nonsense of showing prices that don’t include all costs. No doubt some are, but I’m guessing that many people want to be fooled.

Men know that women use make-up to artificially improve their appearance, but most men I know approve of being fooled in this way. Similarly, when people start to get excited about owning a particular car, they may be happy to pretend that the price is lower than it really is, particularly if it helps to win over an unconvinced spouse.

For Canadians wishing to approach car purchasing rationally, I recommend the yearly Lemon-Aid series of books for both new and used vehicles. I have no connection to these books or their author Phil Edmonston other than having used them several times before buying a car. They are available in the public libraries I’ve checked. I’m not aware of any better source of unbiased information about cars.


  1. I think many people want to be fooled... or at least they don't want to think about all the 'other' costs (i.e. the real cost) associated with owning things like a car, a house, or a mutual fund. Perhaps advertising like this helps people justify doing what they already want, moreso than 'converting' people into buying a product.

  2. If you want the best advice about cars, always ask your car salesman, as they have no vested interest in fooling you into buying a more expensive, and possibly lower quality car, it's not like they work on commission (sp?).

    Lemon-Aid and possibly a reliable mechanic are the two resources, and something like CarFax to cover the obvious possible issues (whether used car has been in accident or such).