Dealer Fraud

Purchasing a new car from the dealership leaves you open to dealership scams, but what about when you need to refinance your car loan?

Many of the scams are the same as you will encounter when buying a car. Here are the best tips for avoiding any of the refinance scams that dealerships force you through.

• Get your own credit score and bring it with you to the dealership
• Don’t pay a cash deposit for your financing loan because if the deal goes bad, you can’t get your deposit back
• Don’t apply for a car loan until you have been employed for at least 6 months if you are a recent college graduate
• Apply for your loan online so you can avoid getting ripped off
• Learn to fix your credit before you apply for a loan. Get your credit score to at least 680 first.
  Pay off your credit card debts before you look for a new car
• If you have recently moved wait 6 months before applying for a loan. You addresses are always verified. If you move a lot, they will not trust that they can keep track of your whereabouts should you make late payments etc.
• Having been approved for a loan in the past helps
• Don’t get a co-signer for your loan because often times you will find that the deal is solely in the other person’s name.

1. Quality Assurance - the used car dealers should have licensed personnel to conduct vehicles inspections. Some areas being look for quality units are vehicles exterior inspection, interior cleaning, mechanical inspection and grading, actual photograph of the car’s status for internet posting, dealers seal of quality and surveyors report. That is right; if the car came from Japan, always find the surveyor report signed by license Japanese engineers.

2. Dealers Guarantee - The used car dealers should guarantees that the vehicles described in their website are as accurately as possible in an on-site inspection. The importer has 14 days from the date the vehicle arrives at the destination port to notify dealer of any defects or fault that you feel is claimable. Number of days varies according to dealer.

3. Your dealer should provide Odometer Certification.
An odometer (often known colloquially as a mileometer) is a device used for indicating distance traveled by an automobile or other vehicle. It may be electronic or mechanical. They are giving you added protection against odometer fraud through Odometer Inspections, a quality control service that’s standard in all our units at no additional cost to you.

4. Pre-order your preferred cars - If you are looking for a cars or any autos of a particular brand, model, year and other specifications, at a preferred price but could not find one in the current online auction and in the nearest car dealer in your area then the the dealer can provide it for you. Word wide used cars dealers are advantageous with this because they have network of car dealers specially on the following countries like US, UK, South Africa, Asia, Australia, South America and New Zealand. With the Pre-Order feature, you can now submit details of vehicles you are interested in. They will search for the vehicle and immediately notify you through email as soon as they can find one that matches your preferences. No fees, no commitment and no hassle at all.

5. Stolen vehicle check - yes your used auto dealer should provide you with stolen vehicle check certificate. A dealer should have a full ownership history checks on all vehicles.

The auto industry and their dealers are rife with scams and fraud and the potential buyer needs to be armed with the knowledge of how these scams work and how to avoid them. There are many dealers that run reputable businesses and can get buyers into a vehicle without using fraudulent means, but there are always those individuals or companies that are looking for ways to take consumers for a ride. The state of California, San Diego and Los Angeles in southern California in particular, is home to many of these scam artists. Even smaller states have their share of fraud cases and attorneys there are as busy as lawyers in the larger California market. If you are fortunate, you won’t be a victim of one of these disreputable dealers, but it is wise to be aware of potential scams before you head to the dealer. Here are some tips on dealing with auto fraud.

People with bad credit are often the victim of fraud at dealerships. They are easy prey, often due to the fact that they believe they cannot get financing. The worst offenses usually occur in the finance office, where the potential buyer often lets their guard down. One way to lessen the chance of being scammed is to show up with no trade and to have your financing done through your bank, with a bank draft in hand.

One of the most common frauds committed by car dealers and one that attorneys see frequently brought to them is the advertising fee scam. Dealers slip into the contract an advertising fee. Often times the advertising fee is on the factory invoice. Dealers add in a second advertising “fee” which becomes pure profit for them. The way to avoid it is to simply ask that it be taken off the contract. If the dealer tells you that the factory doesn’t charge them an advertising fee, have them show you the invoice. If there is no fee on the invoice, which is unlikely, it is okay for the dealer to charge between 1% and 3% of the Manufacturers Suggested Retail Price or MSRP for an advertising fee. If it does not appear on the invoice, then the fee is completely negotiable. If it does appear on the invoice, then that is a case of dealer cost and is not negotiable.

The forced life insurance car scam is just another in a long line of car dealer scams that you will need to be aware of.

What happens is that the car dealer might throw a life insurance policy in with the deal. Its there so that if you croak then the policy will pay the balance of your car loan.

This forced life insurance car scam isn’t free and is just another thing that can needlessly add to the total cost of your vehicle.

You don’t need it because your own life insurance policy will probably have more than enough money there to pay your car loan off.

The bummer is that they may not even mention that they are adding this, so you need to go over the paperwork very carefully.

If you notice it then they might tell you that the car loan company requires you to have it.

Here is how to avoid the forced life insurance car scam…

Avoid getting your car loan through the car dealer altogether!

You will save yourself a ton of hassles and time and will be able to totally bypass the car dealer finance department. You want to do this too because this is where all kinds of b.s. can be added to the price of your car.

It can be difficult, but not impossible to detect when a vehicle’s odometer has been altered. Here are some tips to help used car buyers detect odometer fraud:

• Ask to see the title and compare the mileage on it with the vehicle’s odometer. Be sure to examine the title closely if the mileage notation seems obscured or is not easy to read.
• Compare the mileage on the odometer with the mileage indicated on the vehicle’s maintenance or inspection records. Also, search for oil-change and maintenance stickers on windows or door frames, in the glove box or under the hood.
• Request a  Vehicle History Report to check for odometer discrepancies in the vehicle’s history. If the seller doesn’t have a vehicle history report, use the car’s VIN to order a  vehicle history report online.
• Check that the numbers on the odometer gauge are aligned correctly. If they’re crooked, contain gaps or jiggle when you bang on the dash with your hand, walk away.
• Examine the tires. If the odometer on your car shows 20,000 or less, it should have the original tires.
• Look at the wear and tear on the vehicle-especially the gas, brake and clutch pedals-to be sure it seems consistent with and appropriate for the number of miles displayed on the odometer.

The well-informed buyer is the wisest, while customers who haven’t done any research frequently get confused by the seemingly endless stream of complex information that comes with buying a car. Car dealers often work around a method which bounces profit potential from one transaction to another. If a customer is set on getting a good deal on their trade-in, a car dealer may then choose to concentrate on inflating monthly payments or the down-payment.

Car dealers are also not legally obliged to offer you the lowest interest rate you qualify for. Once a rep has run your details on the credit check they’ll know your income, housing status and if or when you were late paying your rent or mortgage. Some new and used car dealerships obtain this information when the customer is taking a test drive, and the car dealer is already adding up just what price they think you’ll pay.

And if you sign up for a higher rate than the car dealership pays back for the car, you’ve just gifted them some more. Often this difference lies in fractions of percents on your rate. Find out which rate you qualify for first.

Royce says a confused or inattentive buyer can also lead to “slamming.” In this case, a car dealer may take charge and hurry them through every step: the test drive, into the office, the write-up, a quick negotiation, sign the papers and drive home. And then, a few days later, enter the infamous “buyer’s remorse.” Royce says that, unfortunately, this is more common than you might think.

But you, the smart buyer, have negotiated all these obstacles and just when you think you’re winning in negotiations, you’re introduced to a secondary sales rep that you are told is the car dealership manager. Surprise, he’s just another sales buddy brought in when closure on the deal appeared to be slipping. Often the sales team will split commission in this scenario. And they both know that additional options are a car dealer’s bread-and-butter, though the practice of “back-ending” a deal, or adding additional charges to option lists without the customer’s knowledge, is illegal in many states.

Here are all important questions to ask before you purchase an extended auto warranty.

1. Are you a Member of the BBB and in good standing?
2. Do you offer financing?
3. Can I choose the repair facility?
4. Do you pay the repair facility directly?
5. Where can I take my car for repairs? Your dealership, or any ASE Certified repair facility you choose.
6. Depending on the age and mileage of a used car, do you offer bumper to bumper coverage for vehicles out of manufacturer’s warranty?
7. Do you include Wear & Tear?
8. Is overheating covered?
9. Do you offer a per visit deductible?
10. Do you offer a Zero Deductible option?
11. Do you offer Road Hazard protection?
12. Do you offer Car Rental reimbursement with your extended auto warranty?
13. Is the agreement transferable / renewable?
14. Are High Mileage plans available for up to 102,000 miles?
15. Are claims handled by the same company that sells car warranties?

The only way to buy a used car cheap is to find out what the used cars value is first.

You won’t know if that used car you’re interested in buying is a good deal unless you know the price range that it should fall in.

If you attempt to buy a car without doing some research first it will result in you wasting your time and spending a lot more money, plus you could end up with a car that turns out to be a total piece of junk.

When you want to buy a used car you will see that some dealers might list an unrealistically high price.

It can just as easily go the other way too because some prices will be unusually low.

Obviously those are the ones you want to be on the lookout for, but the only way to know that the car you’re interested in is a good deal is to look at ads for lots of cars just like it.

So take all these prices into consideration knowing that some prices can throw off the whole average.

If you see the model you like, but its not the color you want, then you still need to pay attention to what the car is selling for. Quickly take notes on the year, model, mileage, equipment and prices.

Prices will vary by location too. Its important to spend some time looking at lots of ads before you buy a used car and from the area you live.

If you want to buy a used car that is rare, then widen your search to include the year before and after the car you’re interested in. Just make a note of that and take that into consideration when you’re figuring the used cars value.

After doing this you will start to get a really good feel for what price range this type of car should fall into. Then when you find a car you like, you’ll know right away whether its a good deal or not and that is the only way to buy a used car cheap!

Here are car buying tips for what you must do to avoid auto fraud when you buy a car, especially from a car dealer.

• Read through this entire section on car buying tips before you even consider “just shopping”.
• If you go in with the attitude that you’re “just shopping” then you will probably end up buying that day only to find out later that you spent way more money on buying your car then you needed to.
• Go through all your price quotes and figure out who you can get your best deal from. If your online research has shown that you can buy your new car through Edmunds, Ford Direct and Cars Direct for less - then by all means go ahead and do it! That’s a huge car buying tip that will not only save you money, but also hours of time and energy.
• Even if you choose to “pound the pavement” and buy a car from a local dealer, you can use these new car price quotes as an extremely powerful tool when negotiating with a car salesperson.
• Make a few photocopies of your driver’s license. You’ll need this later when the dealer asks for it when you go to test drive your new car. Scratch out your driver’s license number on it though. In some states they can get your credit report with your D.L. without your permission!
• Prepare to spend from four to six hours at the car dealer.
• Get your car loan online. Apply with DriversLoans and 1800AutoYes and get approved the same day!
• Show up at your car dealer well fed! I’m serious here! This is also one of the biggest car buying tips. If you show up starving and with low blood sugar then you can expect to be fleeced. You just won’t be able to keep up with all the tricks that can be pulled on you. You’re going into battle man! So bring snacks and water too.
• Get a free no obligation quote for an extended car warranty from an outside source instead of from the car dealer. You can save hundreds of dollars from what a car dealer will charge and get a far superior car warranty.
• Take your purchase quotes, credit reports, warranty notes and copies of your driver’s license, etc with you and watch the sales persons jaw drop in shock as you whip them out. This is a powerful negotiating technique when you buy cars from a dealer.

Part of knowing effectively how to buy a new car involves some terms you will need to know.

Invoice Price: This is what the manufacturer has charged the dealer for the car. This is often a higher price than the dealers final cost because of allowances, discounts, incentives and rebates. The invoice price should include destination and delivery (freight). Make sure you don’t get charged twice for freight.

Base Price: This is the cost of the car without options. Base price will include the factory warranty and standard equipment and is shown on the Munroney sticker.

Munroney Sticker Price (MSRP): This will be the sticker shown on the side window and is required by federal law. It includes the base price, manufacturer options, the cars EPA gas mileage and manufacturers transportation charge.

Dealer Sticker Price: This is the MSRP plus the suggested retail price of dealer installed options like, additional dealer profit (ADP), dealer preparation, undercoating, and additional dealer markup (ADM)