Dealer Fraud

Step1:Be friends with a mechanic
No one but a good mechanic can inform you about the exact problems of the particular car brand or model you are eager to buy. You might think that you definitely know the type of a vehicle you want to buy, but a friendly advice of an experienced mechanic can help you to find out the best manufacturer.
Step 2: Organize for financing through your bank
Usually banks suggest a considerably lower rate than what a used car dealership will offer. If you have a previous lending and good standing history with your bank you can receive up to 90 percent financing. By protecting an auto loan through your bank for the amount you can afford before purchasing a car, you’ll find yourself in a far more control when negotiating the final price.
Step3: Ask for a copy of the warranty, read it attentively
As a rule it is not in the dealer’s best interests to provide “dealer warranties”. These documents promise comprehensive coverage and prompt service for the vehicle you buy. The phrase “wear and tear items not included” is a common one in dealer warranties, and one you will hear over and over again if your car begins to have problems. Be attentive and demand the warranty to protect yourself from Lemon fraud.
Step 4: Take it for a long rotate
Leave some of your documents with the dealer and take the car out for a while. Drive the car in city streets with heavy traffic, straight and curvy roads. Test the brake pedal, steering, air conditioning and gauges. Take your mechanic and let him take a look under the hood.
Step 5: Don’t be in a hurry
Above all avoid impulse buying. It is only the salesman’s benefit. It is to your good to do as much research as possible to insure you purchase a safe and reliable vehicle. You should be ready to spend some days doing plenty of research before making a used car purchase.

When purchasing a new car you need to be very careful in order not to get scammed. So you should know the most common car tricks dealers use to make profit on you. Read our blog to get the knowledge that is necessary in order not to become a car dealer fraud victim.

Search for car buying advice

Always remember that when you go into a dealership that they are looking to sell you a car and make a hefty profit. You need to learn the art of negotiation so that you can get the best possible price and save yourself a lot of money meantime.

Go into the dealership with your own financing options

You need to go into the dealership with your own financing options because if you leave it up to the dealers,  you will end up paying more money than you should. Remember that most car dealerships have finance companies that make money off of you.

Be careful about those extras that the car dealers add to your purchase. In most cases these are items that you do not need and it is only going to cost you more money in the long run. So avoid unwanted items that the car dealer may try to sell.

Remember that when you are in the market to buy a new car you need to avoid the dealerships trying to scam you. They can tell you a lot of things that are not true to make you buy the car but you should not fall for it because they might tell you anything to make a sale.

Car title fraud, the act of deliberately misrepresenting the title history of a vehicle, occurs more often than it should.

Whenever a vehicle is severely damaged in an accident or by a natural disaster, or stripped of its parts, it is given a new title that includes the type of damage the vehicle sustained. Then it is often sold at an insurance auction.

If you purchase your car at an insurance auction and the following happens, you have become a victim of car title fraud:

The car is often purchased at a “too good to be true” price because of the car’s damaged history. Known as “title washing,” the purchaser re-registers the car in a state that does not recognize the branded title as salvaged. The purchaser of the damaged car which has now a clean title then sells the damaged car to an unsuspecting buyer and makes a profit. The unfortunate result is a car that is more prone to problems and being a danger on the road because of its damaged past and the new driver could be out of a lot of money when the car breaks down shortly after purchase.

The federal government is currently in the process of stepping in and mandating what is considered a salvaged car so that there isn’t a discrepancy between states. Until then, if your car was manufactured after 1981, you can perform a car title history check by inspecting the vehicle identification number. Familiarize yourself with car title fraud by doing some research on various websites pertaining to the subject.

Car title fraud is not only financially dangerous for the victim, but by driving an incompetent car, you are putting other drivers on the road at risk. If you plan on buying a used car, be sure to do all of the extensive research you are capable of doing to avoid falling victim to car title fraud.

Before entering a car dealership, you should be well-informed and prepared to avoid becoming a dealer fraud victim. The most important way you may prepare yourself is by researching the types of cars and deals that are out there. Most car companies have websites which enable you to learn about the different models, options and prices of most, if not all, of the automobiles available. You can even build the car that you are interested in, including options and packages, and then see what the car company will quote as the price. With this information you can go back to the car dealers and show them that price quote.

In addition, some of these auto company websites allow you to contact the local car dealership directly. This is a great way to deal with things, because then you can send in exactly what you are willing to pay, or what the car company quoted the price to be, without actually having to sit down at the car dealership and run the risk of being defrauded by a high-pressure sales situation. You may also send the price quote that you have to other dealerships by email, which will encourage the different car dealers to compete for your business. This may help in lowering the price you have to pay for your car, because one auto dealer may offer you a better deal than another.

If you do decide to go down to the car dealership to bargain personally, doing some research on values, car prices, deals, incentives and rebates may really pay off. While it is impossible to avoid working with car dealers at all, having the know-how about pricing and car financing scams may really help in smoothing out the bargaining process.

You might have heard that repossessed used cars are sold at huge discounts compared to their market price. While this is not too far from being true, this knowledge won’t be much helpful if you do not know where to locate these sales and how to really get the best deal and make sure you do not fall a victim to various car dealer scams.

Generally, repossessed used car sources include repossessions by banks as well as police impounds and third party agents who are engaged with repossessing and storing these vehicles. Then these companies will organize auctions and sales to sell the vehicles as soon as they can in order to minimize cost. Hence, you need to know how to find these sales first.

The repossessed used cars business is a very profitable market for car dealer tricks that’s why many of these sales are not made known to the public. They are mostly attended by second hand car dealers who will obtain the cars at cheap prices and later re-sell them at a price that people pay in the open market for used vehicle. In order to maximize the profit margin, some car dealers will service some of the vehicle before selling them.

The easiest and fastest way to locate these sales and auctions is from the internet. There are online databases which are dedicated to providing updated and accurate information relating to repossessed used cars sales. By using them, you can locate the sales nearest to you. Sometimes, you might even be able to see the models available. The database includes listing of cars, trucks, SUVs and so on.

As with buying any second hand vehicle, before you buy repossessed used cars, it is always prudent to check the condition of the vehicle. Apart from getting help from a qualified mechanic, you can also request for vehicle history report and find out if it has been through any accidents. Make sure you read the fine prints before signing the deal to have a clear idea of any hidden costs, lapsed warranty or additional information that may not be clearly spelled out. Use the online services to get the latest information and read forums to get advice from people who have done so before.

To avoid becoming a dealer fraud victim and a dealer fraud attorney’s potential client read our blog and watch for these car dealer tricks.

Profiting from Rebates

Rebates attract a lot of customers, but the discounts can hide several car dealer scams that are employed to suck a few bucks from a buyer. First, don’t let a salesman tell you that you are getting a good deal because of a rebate; rebates come from the manufacturer and usually apply regardless of the price you negotiate with the individual dealer. Negotiate as if there are no rebates.

Second, make sure that the rebates are deducted from the purchase price. If you allow the dealer to mail you a check after the sale, you end up paying taxes and interest on the rebate. And never let an incentive like a low APR or a rebate rush you into a purchase you aren’t ready to make. If there’s an incentive on a vehicle today, odds are there will be incentives on it again. Salesmen will often tell you that you have to buy a certain trim, engine, or option package in order to qualify for the incentives. This is not always true.

Eavesdropping

While it’s a good idea to bring a friend or family member shopping with you—someone else to watch the deal, question the terms — this opens additional avenues for nefarious dealers to use the buyer’s impressions  against them. When the salesman leaves the buyers alone, people drop their guard and feel comfortable discussing the aspects of the deal they wouldn’t mention in front of the salesman. With just a couple slight pokes at their phones, salespeople can leave the intercom open with the sales manager’s office, where they will go not to seek approval on your terms, but to eavesdrop on your conversation, harvesting information to use against the customer. There are even stories of salespeople hiding tiny monitors in their offices. So when the salesman leaves to talk to the sales manager, it’s your turn to leave and get a cup of coffee.

Auto warranty scams are becoming more and more popular as a quick way to make money. An auto warranty is a type of insurance coverage. New cars come with an auto warranty covering any mechanical defects and providing assurance that there will be no surprise maintenance costs. These warranties are normally for a specific number of years or mileage and are used for service at automotive dealership service centers.

There are three ways to avoid auto warranty scams: investigate, check references, and verify independently. Invest the time and effort required to reduce your risk of becoming a victim of auto warranty scams. The more information you have, the more protected you are.

When purchasing an auto warranty, try to write down all the services included. Look for details on participating auto garages. Take note of the length of coverage that is provided, both in years and in mileage.

Check the fine print to find out who is responsible for payment to the auto garage at the time the service is provided. Avoid any agreement that requires you to pay the costs directly with a promise of later reimbursement. The risk of fraud is very high when it comes to these types of arrangements. Ask if there are any restrictions on the vehicle’s year, model and make.

Contact at least four auto garages which are participating in the program. Visit one and talk with the service staff to verify that the warranty coverage would be honored. All auto mechanic licenses should be posted. If you do not see any, this is an unlicensed shop, so you should avoid purchasing the auto warranty.

The most common car warranty scams offer complete vehicle coverage, with no restrictions on time or mileage, for a reasonable fee. There aren’t any restrictions on the auto garages that you can use and all fees are due upon signing. Remember that auto warranties which are offered by companies based in another country are rarely legitimate.

Odometer is an instrument indicating distance traveled by a vehicle, but criminals are using various instruments to roll back the milometer to sell the vehicle at a higher price.

Odometer rollback schemes represent a high profitable car dealer fraud. In addition to an old machine with false mileage you also get a car which will most likely need more maintenance and repair, thus almost guaranteeing you a return to the car repair shop. And of course the result is more money to be paid by you. Only a low percentage of odometer fraud is executed by amateurs, usually this crime is associated with intelligent organizations or individuals who develop complicated schemes very difficult to detect and investigate. Not only the end consumers are affected by this car fraud, but also legitimate re-sellers.

Recently car manufacturers make use of digital mileage meters because they are cheaper to produce than a mechanical dashboard and easier to fit into the car as there is no mechanical speedometer cable.

Another reason for developing digital odometers was to alleviate the problem of odometer tampering. Electrical pulses in the car wiring may cause the dashboard data, which is stored internally on an EEPROM (Electrically Erasable Programmable Read Only Memory), to become corrupted due to a car accident or a simple mistake in electronics. Therefore, of course, also a tool exists to “correct” the mileage numbers who were displayed incorrectly.

Unfortunately just as quickly as the technology was developed, scam artists learned how to use it for the wrong reasons. It is similar to computer hacking, with the right software and hardware you can penetrate right into the system making the desired changes. You can purchase these tools anywhere in a car shop or online. Since digital odometers don’t have any visible moving parts they are even harder to detect than traditional mechanical odometers, so the vehicle’s condition and a detailed history report are the best clues a buyer has for determining whether clocking has occurred. Legally this service is displayed as “mileage correction”.

Auto dealer scams are a big concern for many potential car buyers who may easily become dealer fraud victims simply because of lack of homework and knowledge in this field.

Altering the Bill of Sale

Never sign a bill of sale with terms that are “subject to bank approval” or have similar wording. Some dealerships convince customers to sign such a document and release new cars to their happy owners, only to call the buyers back a few days later to say that the loan fell through and they need to come back in to sign some new paperwork, which almost always costs buyers more than the negotiated price. Never drive your car off from the dealership until all the paperwork is filled out completely.

Inflating Payments

A salesman will ask you how much you are willing to pay each month, and you will throw out a number—say, $450 a month. He will ask how much more you could afford. You add another 50 bucks. In your mind, you were just theorizing, but to the salesman, you just committed to a $500 minimum monthly payment. Instead, when a salesman will ask how much you can pay each month, tell him you will not discuss monthly payments and only want to talk purchase price; you’ll decide on monthly payments after you’ve settled on a fair price.

Misplacing Trade-In Keys

If you are thinking of trading in your old car when buying a new one, someone may borrow your keys to evaluate your ride. If negotiations come to a stop and you try to leave, you might find that they’ve been “misplaced” in order to prevent you from leaving and entice you to make a deal you aren’t comfortable with. Bring two sets of keys with you and this won’t be a problem.

Watch for these auto dealer tricks else you will most likely need a dealer fraud attorney’s help in the future.

According to statistics used car buyers have a one in three chance of buying a vehicle that’s subject to car dealer fraud. But with some care you can avoid them and find the car of your dreams.

What Scammers Do?

* Selling a car that’s been repaired after an accident. The frame might be bent then re-straightened, or any number of faults could be covered. Obviously, they are not going to tell you that - they simply want to sell the car. Buy it and you could be riding a death trap.

* Selling stolen vehicles. Only two-thirds of cars stolen each year are recovered. Many stolen cars are re-sold. If you’ve bought a car and the police find it, they’ll take it. In theory you can pursue the seller for your money - but what are the odds of finding him?

* Selling a car that’s not paid for yet. If you knew about the debt, the finance company can take the car from you. You can keep it if you didn’t know - but how do you prove it?

How to Avoid the Scam?

* Make sure the seller may produce all the proper documentation, and that the car has a VIN number.

* Remember that a car more than three years old must have MOT certificates. Check it to avoid odometer fraud.

* Always ask to see a seller’s proof of identity. If it’s a private sale, look at their insurance policy.

* Find out about the vehicle’s history before you buy. The AA or the HPI can tell you.

* Have the vehicle checked. You can bring in your own mechanic or trust a motoring organization.

* Never buy from anyone who’s selling a car in a motorway service area - that’s asking for trouble. If possible, go to the seller’s house.

* Watch out for ads where car dealers pretend to be private sellers. In this case they dodge some legal obligations and are probably trying to sell a car they can’t sell otherwise.