Dealer 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.

When searching for the right type of auto credit it is easy to fall prey to all types of car dealer scams that promise interest rates which are too good to be true. The truth is that if you come across a lender that offers you auto credit that you can find nowhere else the chances are that this is probably a lender that is offering a low interest rate but will balance out the equation by charging you for extra stuff. This is why it’s imperative that you find out exactly what you are getting into before you sign up for the auto credit.

Many people search for auto credit online which is an easy and effective way to find auto credit which is cheap. However many people seem to go for the first offer they find online without wondering if they can actually get a better offer if they went all out and applied at a few online lenders for quotes. The first interest rate which is offered to you for auto credit will most likely be too expensive. You need to carry out detailed research when it comes to interest rates and this will require that you first make a list of five of the best lenders you come across online. You can proceed to fill out the free quote application form online clearly mentioning your credit rating and your salary. Some forms are just a few pages long while others might be longer. The more details you provide the lender the more customized will be the quote you receive.

Another good aspect of applying for quotes at multiple lenders is that it sparks of competition as each lender tries to offer you the best quote. However there is still room for some bargaining but it gives you an opportunity to spot the cheapest quote and then go forth to find out the details regarding that auto credit. Some lenders will gladly get back to you within 24 hours others might take up to four working days. It’s good to wait for around a week for all the lenders to respond to you before you go ahead and compare all the quotes. Also pay close attention to the fee structure and any other costs which might be hidden. You should be able to find good cheap auto credit if you follow the steps mentioned above.

Auto financing scams are often contrived by car dealerships, salesmen, finance office staff and other lenders. To avoid car financing scams, buyers must prepare thoroughly for the process of getting car financing. Look through the following auto financing scams to avoid becoming a victim of car dealer fraud.

Window etching trick

Window etching is a very common car dealer trick. The dealer will offer to etch the VIN number of your car onto the window of the car for a price. Basically, the price ranges from $300 to $1,000. Some buyers think that they did a good job by being able to talk down the price to a few hundred dollars, but unfortunately for them, a few hundred dollars is still a good amount of money. The best way to avoid this kind of scam is to buy an etching kit that you can do on your own. This is available in most auto shops and costs around $20. See how much they profit from you!

Warranty extension

Although this type of car financing scam is old already, it is still being used and there are a lot of buyers who fall for this trick. How is this scam designed? When you make a loan for the car, the dealer will tell you that you are required to purchase an extended warranty because it is one of the conditions of the bank. There is a simple way of avoiding this scam. Ask the dealer to specify in writing that the extended warranty is required for the loan to be approved. The dealer will most likely find a way to have it excluded. If he persists in including the extended warranty, refuse to do business with this guy and go to other dealerships.

Always keep these car dealer scams in mind if you are going to buy a car. If you or a friend of yours were treated fairly by a dealer in the past, consider using the same dealership again.

Car dealer tricks are various and being aware of them is more than important. If you are not careful enough you can get ripped off in car buying process without even knowing it. Car dealers sell cars every day; you buy one surely not even every month. So car dealers have predominance over you in this particular case. In this article we will try to outline how to watch for car dealer tricks.

Step 1

The first step is to tell the sales person that you are not going to discuss rebates until you have agreed on the price of the car. Rebates are intended to attract car buyers into the showroom, and very often they do. However, rebates are sent directly from the manufacturer, they are not connected with the price you negotiate for your new car. Once you have negotiated the price make sure the rebate is then deducted from the price on the final bill of sale.

Step 2

The second step is to avoid high monthly payments. The sales person will ask what you are willing to pay each month, whatever number you throw out will be the least you will ever pay.  Talk only about the final sales price of the car, then once that is decided you will work out what your payments each month will be.

Step 3

The third step is to avoid fees that are extra money makers for the dealer. Negotiate the final price of the car and then if the dealer tries to throw on extra fees after that is done do not pay them under any circumstances. Tell them that the price you negotiated is the price that you will pay, and tell them to build it into the price or you are walking out.

Step 4

The fourth step for avoiding car dealer fraud is to secure your own financing from someone else besides the dealer. This way you can have a secured rate and if the dealer can’t beat it, then forget their financing and do it on your own.