Dealer Fraud

Rolling back car’s odometer to increase its resale value is one of the oldest tricks in the book but there are ways for consumers to detect this dealer scam.

Odometer rollback is harder today than it was thanks to computer technology and the availability of vehicle history reports. Some savvy individuals and unethical car dealers, however, are finding new ways to turn back the clock on the cars by rolling back their odometers and selling them for more than they’re worth.

To help consumers to detect signs of  their car’s odometer  tampering, we’ve put together a list of things to look for.

• First of all, use CarFax or AutoCheck to request a copy of the vehicle history report. This includes state registration and emission inspection data and much more.

• Examine the dashboard for scratch marks or loose screws. They could indicate that your odometer has been tampered with. However, it’s a sign of normal maintenance as well including light bulb replacement.

• If the odometer is of the older, analog variety rather than digital, then check to see if the mileage numbers are aligned. Give the 10,000 digit a careful examination.

• Pay attention whether during a test drive the car odometer sticks or not.

• Check for service stickers (tune up, oil change, etc.) that may have the vehicles true mileage. Check under the car’s hood and inside the door.

• Check the owner’s manual for maintenance records. If it appears that pages were removed, ask about it. This is a red flag.

• If you’re purchasing the car from a dealership, ask whether they have done a computer check. In case they have done, find out whether they have found any warranty records.

• Ask for a moment to look at the vehicle’s title. Look closely for signs the mileage has been altered.

• Note the title’s issue date. Was the vehicle sold soon it was issued? Be careful if it was. This is a common way curbstoners mask a vehicle’s actual mileage.

• Are there signs of wear? Check the carpet, arm rests, steering wheel, and pedals. A lot of wear could be a sign the car has more miles on it than the odometer indicates. If any of these parts look new, too new, it could be a sign the owner is trying to hide something, that is a sign of odometer fraud.

• Ask a trusted mechanic to do a vehicle inspection. The inspection includes looking for signs of odometer tampering.

Sellers are supposed to disclose if a vehicle has a salvage title, however this is not always the case. Carfax reports that yearly thousands of salvage cars are sold to unsuspecting buyers. Altered title documents and cheap cosmetic repairs make the cars look sound.

When purchasing a vehicle, always check the title for any “remarks” on the title that will denote any discrepancies such as:

• Reconditioned
• Salvage
• Flood
• Theft recovery
• Stolen
• True miles unknown
• Out of state title
• Exceeds mechanical limitations

Remarks such as the above mentioned are causes for alarm. Besides, be aware of the limitations of a CARFAX vehicle title report.

A vehicle with a Salvage” or “Recondition” title has been rebuilt from the junk yard. These vehicles have been declared a total loss and not repairable. These vehicles should be sold to salvage yards for parts. Nonetheless, many totaled vehicles are never given a “Recondition” or Salvage” title. Curbstoners, unethical dealers and repair shops buy these totaled vehicles and cosmetically repair the damage.

Other remarks such on a title such as Flood, Theft recovery, True miles unknown, Stolen, Exceeds mechanical limitations, or Out of state titles can be types of “Reconditioned” or Salvage” vehicles. While cars with these titles may look good, many are mechanically and structurally unsound and worth only a fraction of book value.

Note: Titles containing the above discrepancies may be “washed” or “cleaned” by simply transferring the title to another state that does not include discrepancies on the title. A professional inspection will surely detect these discrepancies even if the title has been “cleaned.”

To secure yourself from car dealership tricks, you should learn dealer scams. In this blog we will discuss the situations when a car dealership financed contract may be cancelled.

• If you buy a car that is financed through the dealership, the dealer has a right to cancel the contract, but only if you are notified within 10 days of the date on the purchase contract.

It is based on the language of the purchase contract. Look at your purchase contract. That’s the long yellow document containing “RETAIL INSTALLMENT SALES CONTRACT” note at the top. Turn to the back of the purchase contract, and find the box with the “Seller’s Right to Cancel” note. It is at the bottom of the second column.
Car dealers are in the business of selling vehicles to consumers, not financing cars that consumers buy. So, this box advises you that after signing the purchase contract and leaving with the car, the dealership is going to find a finance company or bank to buy your contract. It gives an auto dealer the opportunity to find someone to buy your purchase contract. Most of the time this is not a problem. However, if the car dealer cannot find someone to buy your purchase contract, it can cancel the purchase contract. But, the car dealer must notify you within 10 days of the date on the purchase contract. If it does not, then the purchase is final and may not be canceled.

• If the car dealer exercises his/her right to cancel the purchase contract within 10 days, you are not required to sign a second contract to purchase that same car.

Let us repeat this. A car dealer cannot force you to sign a second contract. If the car dealer cancels the purchase contract within 10 days, you are obligated to return the car, and the car dealer must give you back any down payment or trade-in that you gave with the purchase.

Car dealers use a number of different psychological technique and financing secrets to trick the consumers and make profit. Of course, consumers would like to know all the car dealership tricks and tactics that are most commonly used by almost every salesperson and dealership.

Knowing the salesman’s every move and being prepared to respond and come up with a few tricks and tactics of your own will help you to easily avoid car dealer fraud. Thus, the first and the most important thing in buying or leasing a new car is to be prepared.

Buying a vehicle requires careful planning. This will be useful to get the best possible car for you. If you intend to buy a new or a used car you should first get some information and be sure about what make or model you want to purchase. Get information about the prices of the vehicles, especially the one you want to buy. The best way to be familiar with the many dealer tricks and tactics and come up with your own car buying tips and tactics is being well prepared.

Those car buyers who enter the dealer’s lot unprepared end up being pressured into buying a car that they do not really like or is not ideal for them. So before going to the dealership next time, do your own research and learn as much as you can about the car you intend to buy. Make the list of more effective car buying tips and strategies. Know for sure what car dealer tactics and tricks you are about to face and how to avoid them.

Yo-yo financing fraud is one of the most common practices of car dealerships. It is also known as the spot delivery fraud. This car scam happens to consumers with below average credit score, when the car dealer convinces the consumer to drive off in cars without finalizing their loans.

Typically, the finance manager at the dealership will tell you you’re told that your credit score is excellent and that you got a good APR on the loan. They will give the customer some paperwork to sign, give the keys to the vehicle and tell you that the sale is final pending loan approval. The consumer takes the car and leaves. However, a few days later the representative of the dealership calls you and informs that loan fell through because you did not qualify for the interest rate. The car buyer is asked to come back to the dealership and sign a new loan, most likely with a higher interest rate.

What car buyers don’t know is that the dealership knows the interest rate that you qualify for and is well aware that you don’t qualify for the deal you have signed. Car dealers know that even if you qualify your interest rate would be high.

If you have below average credit and want to buy a vehicle then you a potential target for yo-yo financing fraud, so be careful.

Used car buying scams do happen! In fact they are very common. Used car dealers are master negotiators and are good trained on different sales tricks, tactics and strategies.

If you intend to buy a used car you should go to the dealership being well prepared, so that the car dealer is not able to talk you into a car deal you are not happy with. Here are some of the most common used car buying scams you should be aware of.

1. The deal won’t last - This is a very commonly dealer tactic. When the car dealer feels that you are about to leave the dealership he will most likely tell you that the deal will not be available tomorrow. However, the truth is the car dealer will be happy to sell you a car tomorrow as well.

2. Extras – Dealers make most of their profit on extras. A salesperson may offer you a great deal on the vehicle and later sell a number of over-priced extras. Avoid this car scam by refusing all extras.

3. Rushing the customer to the sale - Most salesman want you to rush to purchase so they can move on to the next customer. Do not sign any documents if you are not sure about the deal.

4. Behind the scenes tactic - During the negotiation process you will probably meet with the manager and the salesman will excuse himself to talk with a manager behind the scenes. This is not always a bad thing but you should still be careful.

5. Bring a car expert with you – It is always useful to bring a knowledgeable friend or a spouse with you to the dealership, who could help you during the negotiation process.

Odometer is a means of indicating distance traveled by a vehicle, but criminals are using different instruments to roll back the mileometer in order to sell the vehicle at a higher price. A high profitable fraud is represented by odometer rollback schemes. In addition to an old machine with false mileage you also get a car which will most likely need more maintenance and repair. Amateurs execute only a low percentage of odometer tampering.

ODOMETER FRAUD TYPES

False or Altered Titles - A clear title is much more valuable than a wrecked or damaged car title. This scheme appears when a dealer buys a high mileage vehicle and subsequently resells it with falsified, reduced odometer reading.

Reassigned Titles - An automobile dealer’s reassignment of the title may be attached to the original title. Numerous title reassignments may accompany both original title and the washed title. An dealer may also discard prior reassignments of title, making it difficult to trace ownership of the vehicle.

Title Laundering - It appears when a wrecked cars title is replaced by papers bought in another country. A dealer discharges the old title, registers his vehicle in another state with the altered odometer and then in a name of a company, then reassigns the title back to himself, now having his car registered with the new mileage.

Odometer Clockers - A dealer does minor labor to the car, replacing or changing the noticeable dings and dongs. Replaced can be floor mats, gas and brake pedals, also tires. The finish is then waxed and washed. A clocker turns back the odometer with common tools such as picks, wires, screw drivers, electronic and digital tools. Cars odometers can be rolled back in masses, because a good clocker can do this job in a matter of minutes. The vehicle will then be sold over the internet, at the dealers lot or at the auction houses to get a higher value.

There are car dealers in the industry that scam customers without even blinking an eye. If you intend to buy a new or used car and want to avoid being a victim of dealer fraud, then you should be well prepared with the best knowledge about most common dealer tricks , tactics and strategies used to make you pay more.

Remember, that a car dealers scam may start when you pull into the dealership lot. So be prepared even before you go to the dealer’s lot and talk to the dealer. If the car dealer notices that you are just starting to look and are not sure about the mark and price of the vehicle he will probably try to use the opportunity and play on your emotions. Thus, the dealer may talk you into a car deal that you are less than satisfied with.

Before going to the car dealership define for yourself what cars you are interested in. Do some research to find out the cost of the vehicle you consider to purchase.

When you find the car you like don’t show it to the car dealer. Always start your negotiations low. The car dealer will probably negotiate as high as he can, so if you start low you will be able to settle at a mid-range price that feels right.

Keep in mind that most consumers that become victims of dealer scams are those who are not well prepared. Get as much information as you can and you will be able to get a great deal on a car you love.

Here are some tips to help car buyers avoid the bad credit score scam and save hundreds and even more when you buy a car.

First of all, it is important to mention that not all car dealers want to scam you. However, you should still be careful to prevent this car scam.

The credit score scam occurs in the car dealers auto finance department. When you have already negotiated that price for the vehicle the salesperson will go to the finance department and return some time later to inform you that your credit score is too low.

This is a common dealer trick used to get the car buyer into a high interest car loan. This way most dealerships make their profit.

The best way to avoid the bad credit score scam is not to finance your car through the car dealer. This way you can not only save hundreds of dollars, but will also save yourself a lot of time as well. Know your credit score before you go to the dealership. The higher your credit score is, the lower the interest on your car loan.

The Bump and Grind car dealer scam is a common dealer trick, used to increase the price of the vehicle and occurs during the negotiation process.

Car dealers know that if they try to raise the price of the vehicle for $2000.00 right off, the consumer will probably go away from the deal. So what they basically do is just raising the price by just a little here and a little there. This technique proves to be quite effective.

When the car buyer makes an offer on a car, the sales person will most likely tell some bogus line like: “Gee, I know my boss will kick me out of his office if I take this offer to him, so how about if we raise it (bump it) by $150.00 (or whatever) and then he will at least listen to me?”

This is only the first “bump” and what consumers don’t know is that later there will be more bumps in the price.

Then the dealer leaves you for about fifteen minutes to supposedly present your offer to the sales manager. The salesmen will pretend to argue on your behalf. When the dealer comes back and he/she will say something lame like: “Gee, that sales manager is such a hard head! If you could just agree to add another $200.00 (or whatever) to your offer then I’m almost positive he will agree to your price”.

You can avoid the bump and grind car dealer scam if you are well informed and let the dealer know that you are aware of it. If you feel that the dealer is trying to scam you tell him that you will leave if they continue to do so.