While you are showing off your new car to your friends, the dealer calls you with some “good news”, saying that they are now able to lower your monthly payments.

All you need to do is to go back to resign the contract. Great, right? Of course it is! You can’t wait, so you go back there, meet the finance manager and go over the new contract.

On the new agreement, he confirms the car model, the year, your address, and the monthly payment, which is now $100 less than before (as promised), and then goes to the last page for you to sign. He’ll probably keep talking at this point about what a good car it is.

What you don’t want to miss is the part where the length of the contract is specified. Instead of - let’s say - an initial 5-year term, now it will be 6. The dealer pulls the trick by spreading out the loan by an extra year, which doesn’t help you save money, but costs you more, milking out more bucks towards the dealership.

How to avoid: if you pull one end of the blanket over your head to keep you warm, chances are your feet will be cold soon. When a dealer calls you back for lower monthly payments, check very careful the length of the contract.