Dealer Fraud

There are several common car trade in price scams, tricks, and bargaining tactics when buying a new or used car from a dealer. Knowledge of these practices will give a car buyer an advantage one can at least be aware of what is happening in the process. Knowing how to avoid them is even more helpful because the result can be a far more attractive price one receives for a traded vehicle.

Negotiating Trade in Price

Right from the very beginning, the trade in price should be negotiated separately from the purchase price of the car one is interested in buying. Indicating real interest in buying a car will help in the negotiating process, but when asked about price, a buyer should persistently insist that the dealer value the trade in vehicle before details of the purchase are discussed. The two dealings should be treated as completely separate transactions.

Purchase Price Up Front

Several customers may prefer to negotiate the purchase price first, relying on publically available resources that are very clear on trade in value. As many dealers have a preference to pay the wholesale price, claiming that they have no intention of taking the vehicle into their own inventory, if one’s car is easily salable or an “in-demand” make or model, insisting on a higher price is important. The dealer is not obliged to wholesale the vehicle for a low price after the sale is complete. It is not obligated for the buyer to sell at a disadvantageous price.

Misinformation Provided

Extra similar scams include so-called mistakes as to the model or features on the trade in car. Asking early in the process if the dealer will purchase your car regardless of what you ultimately decide may help avoid some of these dealer tricks but being watchful and sticking to your budget and car-buying plan is critical.

A salvage car is one that has been involved in a major accident and been deemed to not be worth repairing by an insurance company. As an insurance company declares a vehicle, it pays the maximum market value of the vehicle to the insured and then disposes of the vehicle by auction it off to the highest bidder.

The vehicle is then issued a special type of title by the states where the vehicle is registered. Any salvage title has a stigma that is always attached to it and is worth nowhere near as much as than comparable vehicle that has a clean title — even if the vehicle has been restored to 100% operating condition.

While most state and federal laws require a used car dealer or private seller of a vehicle with a salvage title to disclose the fact to the buyer, some unscrupulous sellers did not. So, here is some ordinary car scams associated with salvage titles that you should be aware of.

Title Washing Scam

Numerous salvaged title vehicles are purchased by rebuilders and then rebuilt so that they appear to be normal used cars. During a salvage title vehicle purchase you can certainly save a lot of money, you have to be aware of the title washing scam. This type of scam refers to lemon laundering, and is still practiced by many unscrupulous used car dealers and car brokers.
The scam includes registering the vehicle in several states, one after another. This usually takes place in states that have rather lax or loose rules and regulations concerning the documentation of car titles. In any case when a dealer makes a vehicle registration the, there is a good chance that the title will eventually end up not having a salvage or junk title annotation on it. The dealer is then able to sell the vehicles as a normal used car, and usually collects a premium on the vehicle.
The best way to avoid a title washing, or lemon laundering, scam is to do a title search on the Internet.

1. Test Drives: NEVER talk about price until you test-drive the vehicle. Test-drive multiple vehicles at multiple dealers and make them compete for your business. You will never know if you like it until you take a test drive. Let the dealer know you are still shopping around.

2. Financing: NEVER tell the dealer about your pre-arranged financing; you want the dealer to think you are paying cash. If you have gone online and applied for a car loan, you are a cash buyer in their mind. This will get you a good price and will not allow the dealer to manipulate you into thinking you are getting a good deal.

3. Set the Value: Offer the dealer a set price you are willing to pay with everything included (taxes, fees, registration etc.) For example, in case you are interested in a Ford Explorer for $17,000.00 you should say “I will write you a check right now for $15,500.00 but that includes everything. Do we have a deal?” Do not give them an option. Always be willing to walk away!

4. Do Not Delay Too Long: NEVER stay in any dealership more than 30 minutes waiting for a price. A test drive should take 10 minutes. Give them a price after your test drive and let them know they have very short time to give you an answer. If you do not get an answer, leave and tell them they can call you if they want to sell you a vehicle today.

5. Read before You Sign: ALWAYS read your purchase order. Make sure you understand everything you are committing to and what your responsibilities are in this transaction. There are many “tricks of the trade” dealers will try to use. So be aware!

Everybody is at a disadvantage when going to a dealership and negotiating for a car. Staying in control of the process is the key during all kind of negotiations. Remember that you are the one making the purchase, the dealership is there to serve you - it should never be the other way around.

Online lending has become very popular with consumers because they can apply for a car loan before ever stepping foot in the dealership. This helps to put them in control of both the car buying process and over the financing portion of the sale as well which historically has been the largest profit piece of the car sale for the dealer. With your financing already taken care of, you have accomplished half of the negotiation battle already. Here are a few simple things to remember:

1. Research: Do your research before you shop It is essential to examine the trade-in’s value and the price of the model you want before you get to a dealership.

2. Make an Assignation: Make an assignation with an Internet sales person before going to a dealership. In general you will get a better price and less sales pressure. The internet sales person is more like a fleet person and is used to dealing with a savvier buyer.

3. Hold Your Personal Information: If you have gone online and taken care of your financing before going to the dealership, do not give the dealer your approval amount, desired payment, interest rate and most importantly, your social security number. If you already have financing lined up, a dealer does not need this for any reason.

4. Trade-Ins: If you have a Trade-in, do not disclose this information until after you have negotiated the price of the vehicle you are buying. Get the new car price in writing and then negotiate on the trade. These are two detached transactions are on one piece of paper.

One of the most popular types of fraud today involves auto insurance, particularly in staged auto accidents.  These scams have become rather sophisticated to a point where they often involve numerous participants.

Auto accidents sometimes turn to be no accident at all, but a staged production by criminals where you are unknowingly and innocently made an actor. Before you take to the road, learn to recognize auto accident scams to help keep away you and your family from becoming victims.

Don’t Be a Victim

All the time try to drive carefully to help ensure your safety and lessen the probability of having an auto accident. In case you are caught up in an accident, take the following fraud prevention measures:

•    Always call the police, regardless of who is at fault or the amount of property damage. Make sure an official police report is filed, even if damage is small. When the report describes the damage to the other car as a “nick” for instance, it helps prevent the other party from collecting damages not resulting from the loss. An exact account of accident details is important when evaluating whether a claim is valid.
•    Count the number of passengers in the other car. If it would be possible, get the name, address and driver license number of all occupants. This helps to prevent paltry lawsuits and claims paid to people who weren’t actually in the car. Take an exact record of what happened for your personal records.
•    Immediately inform your insurance carrier if you are involved in any accident. Maintain the representatives are trained to recognize indicators of fraud and investigate suspicious claims.

If you are a victim of vehicle insurance fraud, feel free to contact an experienced Los Angeles car fraud attorney Hovanes Margarian.

Criminals use numerous methods of car cloning. The source of all these methods is stealing the other car’s “identity”.

Criminals take the registration plates from other cars of the same model and color put them on their vehicles thus making a “clone” of another vehicle. Generally the cloned vehicle owner notices very quickly that the number plates have disappeared. So the owner pays a certain sum of money to replace the plates. Nevertheless he/she is not aware that now a cloned car exists and somebody uses it under the new identity, perhaps for some kind of illegal activity.

The owner of this cloned car can leave without paying for parking or for refueling. The crimes in which the cloned vehicle is used can be more serious ranging from organized crime or terrorist actions.

Vehicle Cloning by Means of Internet

Car cloning does not need the physical stealing of registration plates. At present there is a loophole in legislation which allows internet companies to sell replica numbers which are not to be used as real numbers.

In case of buying a new number plate for your vehicle, you must produce a proof of address, driver’s license and a log book. Anyhow there are a lot of companies which can sell the new number without any documents. So the criminals put the order with the registration number they want.

Most people know that they are victims of car cloning only when they start to get different fines, bills, parking tickets that have nothing to do with them  being practically unable to prove that they are not guilty such people have either to pay all these papers or go to the court.

The experts say that as people receive fines, bills, parking tickets or when they are accused of more serious crimes their main task is to prove that they are innocent.  Alas it is not easy, as so many people just prefer not to struggle and think that it is easier to pay than to call to the police and explain the situation. So even specialists do not actually know how many people just accept all these fines and penalties instead of challenging the system.

Insurance are paying millions to defend themselves against car scams where people stage an accident in the hope to making some gains through insurance claims. How do these scams affect you? Besides any possible deaths could occur from a planned scam gone wrong, it is not the insurance companies who pay the consequences of these wicked scams. Factually the innocent and honest citizens end up paying higher premiums so insurance companies could cut their losses.

You should learn how to prevent getting in the middle of these scams and should contact your insurance if you feel you could be scammed or are a witness to a scam. You could potentially be rewarded for providing this information.

Here are some most popular methods that scammers use to cheat auto insurance providers and create false claims.

Paper Accident- when the scammer gets those in the auto repair to get involved and report an accident that never happened in reality. Normally the claim would not exceed $1000 to avoid raising any red flag where insurance companies would feel the need to conduct an investigation.

Hit & Run- occurs when the criminal reports a fake hit and run and tries to get claims from their insurance policy.

Swoop & Squat - happens when the scammer suddenly rushes in from of the car and drastically slows down or stops suddenly. There is an accomplice vehicle that does not allow the trapped vehicle from moving away to prevent an accident. The passengers in the squat car then send in claim reports for their injuries which are then accompanied by reports from doctors who are also involved in the scam.

As you look for a used car, you might come across the phrase “salvage title” in a used car advertisement. The price is going to seem right and you’re really going to buy it. Used car salvage titles are not bad idea at all, but make sure you know what you’re getting into before purchasing a used car with a salvage title.
Here you have four things for you to do before buying a vehicle with a salvage title:

•    Understand What a Salvage Title Is
•    Get a CarFax report
•    Get a Qualified Inspection
•    Weigh the savings vs. future costs

Understand What a Salvage Title Is

Basically salvage title is given to any vehicle that has persistent damage worth 75% or more of its value. For example, if you drive a 2003 car $9415 and it suffers $7061 in damage in a collision, it’s going to be branded with a title stamped “salvage.” In other words, it’s not considered fit to drive. Sometimes it is also called a junk title.

Normally it is fraud to sell a vehicle without disclosing that it once had a salvage or junk title. That’s why titles will be branded “resalvaged” or something similar to denote a vehicle that has been repaired from a salvage title.

Here you have a chief tip when dealing with a “resalvaged” title. Make the seller demonstrate what work has been done. In some states, revenues for parts and repair work have to be submitted in order to get the resalvage title.

Get a CarFax Report

Usually, CarFax reports aren’t the be-all and end-all, but you’ll find them useful when dealing with vehicles with salvage titles. They give basic facts about a vehicle’s history if you know what you’re looking for.

Unhappy used car shoppers are finding out horrible information after purchasing used cars. They are learning that their cars have been damaged in floods and they didn’t realize it before purchasing the car itself.
Here are some tips that can help you to escape being stuck with a vehicle that has many hidden repairs needed which can cost you much more than you planned on spending when you purchased that used vehicle.

Water-damaged car is something that can be much easier to hide than it is to repair, that is the reason you need to inspect in hidden areas to determine if the used car you are considering to buy might have flood damage.

Inside the car the first thing you should do is to give the car a good test. Many car dealers use odor but see if you can detect a rotten tinge to the air that would be a definitely warning sign.

Moreover touch the carpet of the car, many times cars with flood damage have water trapped under the carpet that remains there and is not detected. When inspecting the carpet, note if it is new. If the car is an older one, made sure you ask the sales person why the new carpet was installed in the car and have the answer documented if you buy the car in case you need to refer to that conversation due to a complaint you have after purchasing.

Another point to examine while you are still on the floor of the car is the brake and gas pedals. You will want to look under the pedals to see if there are any signs of wear from water including rust. Also check the bolts and screws under the seats as well.

Step1

Avoid car trade-in scams wherever the dealer states he will pay off your current lease or loan, no matter how much you owe. Remember that a lease or a loan is a financial contract, and there is no trick to eliminating one when buying a new car. While this supposed “deal” will only end with you making even higher payments on your new car, it is better to wait until your car is paid for, or your lease has expired.

Step 2

Look out for car dealers who expediently forget to pay off your trade-in after the deal is complete. Many new car buyers are shaken as soon as they receive notices for a collection agency a few months down the road as the dealer never handled the transaction as promised. Yet again, there is methods to avoid this trade-in scam by ensuring that you get all pay-off documentation in writing, or simply wait until you vehicle is paid off before you trade it in for a new car.

Step 3

Have your trade-in examined by an independent mechanic in order to avoid car dealers who report “all sorts of problems” with the vehicle. By offering independent and recent documentation, you can successfully rebut a dealership mechanic who claims your brake pads are almost gone, or that your engine may need a complete overhaul before it can be resold.

Step 4

Acquire a copy your current credit report to avoid trade-in scams where the dealer tells you that you are ineligible for lower interest rates due to questionable credit scores. This type of scam is rather ordinary, but it is easily discouraged once you produce a real credit report. Keep in mind, a car salesman should not know more about your credit score and financial history than you do.