Dealer Fraud

While most people are aware of common car dealer scams, less experienced buyers may fall prey to their tactics. When selling a new or used car, car dealerships profit in two ways. They profit from the sale of the vehicle, and from the interest paid by the buyer. Hence, the goal of most car dealerships is to trick buyers into paying more money for their car.

Dealership Mark-Ups

Car dealerships have a close relationship with certain finance companies. Thus, the car dealerships will likely encourage buyers to use a specific finance company. If possible, secure your own financing with a bank or credit union. Because car dealerships also profit from the interest paid, the in-house finance company may increase the loan rate by a few points. The difference paid is received by the dealership.

Dealership mark-ups may be avoided by simply comparing auto loan lenders. Do not accept the first loan package offered, and never accept dealership financing without shopping around. Request a no-obligation quote from an auto loan broker. This way, you acquire multiple quotes from honest lenders.

Upside Down Auto loans

In an effort to finance everyone, some car dealerships offer crazy loan packages. This might include zero down loans, extended loan terms, etc. While these options sound appealing, and they may help you afford a nicer car, keep in mind that car’s lose their value quickly. Thus, avoid long finance periods. If possible, attempt to have the car paid off within four years. Also, save money for a down payment.

In case you feel you have already fallen a victim to car dealer fraud, contact an experienced car dealer fraud attorney for further help.

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