Buying Used Cars - Top 10 Dealership Scams
by: Andy McDowell
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.
You're free to publish this article as long as you included the Author Bio
with an active link to the author's site
http://www.muscle-cars-online.com.
About The Author
Andy McDowell is a Muscle Car and Ford Mustang Enthusiast and owner of the
website
http://www.muscle-cars-online.com.
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