Nov 03 2009
Financing Scams
Dishonest car dealers might fiddle with your financing as a way to jack up their profits. The most popular way of this car scam involves calling back car buyers into the dealership a week or so after purchasing a car. Once you’re back, the car dealer tries to renegotiate the interest rate based on whether you buy extra services, accessories or warranties. They might also try to focus on the amount of the monthly payment to divert attention from the fact that the total amount being financed has gone up. Another variation of this scam involves dealers letting you drive off the lot without finalizing the loan papers, promising that they’ll work it out. But when they call after several days, the terms of the loan have changed or the monthly payments are more than the buyer can afford, which opens the door for the dealer to “refinance” the vehicle and increase his/her profits.
Warning Signs
Dealers who offer to let you take a car home but don’t finalize the loan terms might not have your best interests at heart, especially if you have already agreed to leave your trade-in with them. If you get a call about a problem with a loan several days after signing an agreement, be suspicious. Also, a dealer shouldn’t lower or increase the loan interest rate based on whether you’ll buy extra warranties or dealer services.
How to Protect Yourself?
Before going to a dealership, line up your own financing. Compare the interest rate of the loan you already have with what the dealer offers and go with whichever one is better. When negotiating with car dealers, it is recommended to focus on the total cost of the car, not the monthly payment. Dealers may sometimes monkey around with the total amount being financed if you’re too focused on the monthly payment.
If you are already involved in such a car scam, try to find an experineced dealer fraud attorney to asset your rights.
Hello,
I think I have been financed scammed from a dealer and dont really know what to do? I traded-in my vehicle that i currently owe on and when I traded in my car they were suppose to pay it off and tack on the negative balance onto my current loan. My trade car was never paid off, and I have the bank currently calling me trying to get me to pay for a car that I no longer have. The dealership is finally trying to get a hold of me now to get this resolved because the bank has threatened to call the police to get the vehicle I traded in back. The dealership was un-able to get me a loan and now they are telling me that they sent me a letter 10 days after I purchased the car. Which I never received. I was reading my contract and there is a section on the back that states that the seller has the right to cancel. Am I in a screwed position, If I cant get a co-signer I get my old car back that I dont have the money to pay off for the bank so it gets repo, and my credit is screwed, So I feel like I’m screwed no matter what I do, any suggestions ? also I purchased the car back on aug.8th and it is not 11-11-09
Thank you for the comment. Please call my office in the morning to discuss your options. I would first request that the dealership provides some kind of evidence that they notified you within ten days of the initial deal. If they sent you a letter on the tenth day then that letter would not even get to you in time. Let’s discuss when you call. 818.990.0418. If the notice was after the ten days then the dealership has to honor the contract and payoff the loan on your trade-in.