5. Interest Rate / Monthly Payment: Let's say you qualify for a loan rate of 4.9% APR for 60 months. You have no idea what your monthly payments will be based on your agreed selling price. Because the payments are based on the bottom line of the entire deal rather than the selling price alone it is impossible to determine an accurate monthly payment. The dealer calculates a payment of $450 which seems agreeable to you and you sign the contract. The problem is when you get home and go through your paperwork you discover that your interest rate is actually 9.9%. The dealer profits the difference between your buy rate 4.9% and the 9.9% you sign for.

6. Holdback: The dealer is paid anywhere from 1-3% of the net invoice on all new vehicles sold from the vehicle's manufacturer.

7. Add-On's: Any dealer addendum should be carefully scrutinized. Products like Fabric protectors, and window etching are ploys by the dealer to increase their profits. We suggest pricing individual add-ons from after-market sellers to make sure the dealer is not over-inflating the prices.

8. Leasing: Extremely profitable because their based on a percentage of the vehicle and dealers can easily charge MSRP for the vehicle and still quote low monthly payments. We recommend our friends at http://www.carbuyingtips.com for more information on leasing.