Jun 25 2008
Auto Fraud and 6 Tips to Avoid It
For the average American purchasing a new or used vehicle is a major investment. Most Americans consider not only the cost of the automobile, but also the fact that it is a key factor to financial prosperity. People need a reliable transportation to get to the places where they can to earn more money pay off the car loan, as well as the car insurance, the mortgage, the credit card, and the household bills.
However, when purchasing a new or used car an auto buyer should be aware of problems that may arise after the purchase and are the result from auto fraud. Auto Fraud occurs when the seller of the vehicle fails to disclose the complete history of the car he is selling, or alters or destroys evidence pertaining to any part of the vehicle’s age, condition or inherent or acquired defects. When purchasing a used car an auto fraud can come in a variety of forms such as odometer rollbacks, salvage or flood vehicles, yo-yo sales, credit consolidation sales, and resale of damaged vehicles without full disclosure.
SIX QUICK STEPS TO AVOID AUTO FRAUD:
Tip 1: Make friends with a mechanic
When you intend to purchase a car a mechanic can be your best friend. A friendly mechanic can tell you what specific problems may a particular brand or model of a car have and which cars are relatively hassle-free. Once you make a decision on what type of vehicle you want consult with a good and experienced mechanic who can help you determine the best manufacturer based on what type of car you are looking for.
Tip 2: Arrange for financing through your bank or credit union
Most car dealerships make their profits by providing their own financing to auto buyers. When you buy a car you dealer will try to convince you to borrow from them. However you should know that banks almost always offer a substantially lower rate than your dealership. Before shopping for a new vehicle seek financing approval from your bank or credit union. You have a chance to receive up to 90 per cent financing, especially when you have a prior lending history with that bank.
Tip 3: Ask for a copy of the warranty, take it home and read it
Car dealers make most of their profit through extras and add-ons that increase the cost of the vehicle. Many used car dealers usually pitch a dealer warranty, which is almost always an add-on. The big print in these documents promises comprehensive coverage and prompt service for the vehicle you buy. However this is not the truth. When something actually does go wrong with your car the dealer will probably refer to what is written in the small print. For example, one of the common things in dealer warranties is the phrase “wear and tear items not included”. You will hear this phrase over and over again if your car has problems.
Clarify exactly what is covered with warranty before signing any paperwork. If you don’t feel comfortable with it ask the dealer for a signed, authorized amendment stating exactly what you are seeking.
Tip 4: If necessary, amend the warranty to protect yourself from Lemon fraud
If you decide to purchase a repair and maintenance coverage for the price of your warranty, make sure the following statements are somewhere on the warranty:
“THIS CAR HAS NOT BEEN RETURNED TO A DEALER OR MANUFACTURER BECAUSE OF LEMON LAW DEFECTS OR COMPLAINTS.”
“THIS CAR HAS BEEN INSPECTED FOR COLLISION DAMAGE AND COLLISION REPAIRS AND HAS BEEN FOUND TO BE FREE OF COLLISION DAMAGE OR REPAIRS.”
If you don’t see these statements anywhere on the warranty make an amendment and add them. Make sure the amendment is acknowledged and signed by an authorized representative of the dealership.
Tip 5: Take it for a long test drive
Leave a copy of your driver’s license at the dealership and take the car out for a test drive. It will be a good idea to take your mechanic with you and ask him to look under the hood. Drive the car in multiple road conditions: city streets with heavy traffic, highways with open spaces, straight and curvy roads, and hills. If your mechanic likes what he sees then you are probably in good shape.
Tip 6: Don’t be in a rush
Most importantly avoid impulse buying. A car salesman benefits if the sale happens quickly, so he will use different tricks to rush you and make you sign the papers in a 24 hours. Don’t let the car dealer rip you off. Do as much research as possible before purchasing a used car.
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