Buying Used Cars - Top 10 Dealership Scams
Top 5 Dealership Scams:
1. The VIN# window etching scam
Basically a dealer will charge you $300-$900 for window etching
and they will tell you that you have to pay the money to get the
loan because the banks insists on it.
Some dealers might tell you that the etching is free but will
add on the etch money to your monthly payments to make up for it.
The best way to avoid this scam is to force the dealer to put it
in writing if they say that the etching is free or simply etch
the car yourself.
Remember a lender doesn't require that you purchase any extras
on a car. All the lender cares about is that you can make your
payments on time regularly. Don't buy into it.
2. The Financing Scam
I have mentioned this before already, but here it is in more
detail.
Basically you trade in your old car and the finance manager
tells you that your interest rate is good and then gives you the
car.
After a week or two passes you get the call from him that you
didn't qualify for the interest rates that they gave you upon
making the deal.
Every new purchase has a clause in the contract that usually
states that the deal is "subject to loan approval."
This gives the finance manager a loop hole in getting more money
out of you.
All that this means in the contract is that the deal is not
finished yet even you already have possession of the car and
have signed the contract.
The dealer can then charge you $1000 more in finance fees and up
your monthly payments by $50.
This scam is generally pulled on people with bad credit because
it is more plausible.
If you are wondering why they would sell you the car at 6% APR
if they knew you had bad credit (remember they ran the credit
search already) the answer is simple; to sell the car.
You can avoid this scam by not financing the car with the dealer
if you know that you have bad credit.
You are better off going to a credit union and financing the car
yourself. When you buy a new car the deal should be made on the
price of the car, not on the monthly payments.
3. The Credit Score Scam
This scam is ridiculous at best. This is when the finance
manager tells you that your credit score is lower than it really
is so that they can get you for higher interest rates.
This scam is pulled on everyone; good or bad credit.
This scam is easy to avoid. Just get your own copy of your
credit report from Equifax.com, and bring it with you.
It is really difficult to lie to you about your credit score if
you have your own copy of it. If your paper and theirs doesn't
say the same thing, go somewhere else because that dealership is
lying to you.
Don't forget to let them know it too because it'll be nice to
watch them squirm.
4. The Forced Warranty Scam
This is when the finance manager tells you that you are not
eligible for the loan by the bank unless you pay an extra $2000
for a 2-3 year extended warranty.
This scam just doesn't make sense. Basically the finance manager
is telling you that the bank won't trust you to pay the $20, 000
loan for the car, but they will trust you if you pay even more
money. That's just stupid.
You can avoid this scam if you can force them to put it in
writing that you "have" to pay the extended warranty in order to
get the loan.
That way you can bring a copy of the contract to your local
State's Attorney's office to verify that the deal is valid. I
can bet that the finance manager will change his tune pretty
quickly.
5. The Dealer Prep Scam
Let me first let you know that cost is not only legal but very
much common practice. I still refer to it as a scam because it
is just another way for you to end up paying more money for the
car.
Basically the dealer will tell you have to an extra $500 to
cover the labor costs of the dealership's 5-point inspection.
You are paying for the time it took for the dealership to make
sure that the car wouldn't explode on you in the first week of
owning it.
This check up that you are paying so much money for is for the
dealership to remove plastic from the seats etc, vacuum the car
out, and making sure that all of the fuses and fluids are ready
to go.
When factories deliver the new cars to the dealerships the cost
of delivery and prep is already covered, so basically you are
paying the dealership for work that they haven't really done.
I swear they could get the car in perfectly ready to drive
condition and put everything right back in it just so that they
can make you pay the fee again.
You can avoid this scam by simply asking the dealership to add
an extra $500 credit to the deal to make sure you do not have to
pay the money.
If they refuse, you can then decide if the car is worth the
money. If it is fine; buy the car, if not; go to another dealer
that will remove the dealer prep costs.
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Author Bio with an active link to the author's site.
Andy McDowell runs the free Online Degrees
Report Site with free Tips and Reviews of Online Degrees.
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