While most auto dealers run reputable and ethical businesses there are a few well known scams that consumer should know about and avoid.
VIN# Window Etching
The dealer tries to charge you $300-$900 for window etching thet is required to get a loan. 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. If the dealer insists then let them include it for free. Don’t buy into it.
"Financing Fell Through"
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 this means in the contract is that the deal is not yet finished, even though 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. You can avoid this problem altogether by getting your own financing in advance.
False Credit Score
You are told that your credit score is lower than it really is. This allows the dealer to charge you higher interest rates. The best way to avoid this is to have a copy of your credit report in hand when you visit the dealer.
Forced Warranty and / or Insurance
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 or purchase disability insurance. 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. Don't buy it.
The Bounced Check
You walk into a dealership with a bank draft from your financing company and the dealership charges that they can’t accept your draft because your bank bounces checks often so they now refuse checks from that bank. This is the dealers way of getting you to use their financing and happens most often with checks from online lenders since consumers might not have had a long standing relationship with the lender and are vulnerable to the dealers claim. Don't buy it.
Forced Credit Application
Some dealerships will claim that you must fill out a credit application in order to buy a vehicle from them. This is not true if you are paying cash or have your own financing. Walk away.
NEXT: AVOIDING AND IDENTIFYING COMMON CAR SALES TRICKS |
