Dealer Fraud

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.

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.

Do your homework accurately before entering the car dealership to avoid the potential threat of becoming a car dealer fraud victim. Here are some useful questions to ask a used car dealer:

1.    What is the dealership’s return policy?

High-pressure dealerships will most likely laugh at this question. However, a consumer friendly car dealership will probably give you time to rethink the purchase and at least provide you equal value. No dealership is going to offer you cash back.

2.    What is your cash price for this used car?

Cash is king, even at used car dealerships.

3.    What new equipment comes as part of the purchase?

See if you can get the dealer to throw in e.g. a set of new tires. If the used car’s mileage is approaching 100,000 a timing belt might be a nice touch.

4.    What service has the car dealership performed on the used car since acquiring it?

This helps you to determine what value you’re getting for your purchase.

5.    Do you take trade-ins?

In case the dealership handles this for you it will make your life a lot easier if.

6.    Is a CarFax report provided before purchase?

A reputable dealership will have no problem with this. Make sure the report’s VIN (vehicle identification number) matches the VIN on the used car you’re looking at.

With the help of these questions, hopefully you will not need a dealer fraud attorney’s help in the future.

Vehicle safety recalls have been making headlines recently, especially after the Toyota recall on January 21. But no matter what you drive, you should know how recalls work, what they cover, and just as importantly, what they don’t.

Safety-related recalls are those recalls that are likely to affect the safe operation of a vehicle, a tire or a child restraint without any prior warning. This includes component failures that might cause fires or loss of control, or airbags that deploy when they shouldn’t.

Once a recall is issued, you should receive a notice in the mail. You can also call a car dealer or the manufacturer to find out if your vehicle is affected.

While it can be scary to hear about a recall, it’s likely that your car is fine, and it’s being done as a precaution. The manufacturer identifies a group of vehicles that might have a problem, or could develop that specific problem in the future, and inspects or repairs all potentially affected vehicles to be sure. Remember that not all recalls are for major problems: several have been issued for cars carrying warning labels written only in English, when bilingual labels are required by law.

If you do get a recall notice, make an appointment with a car dealer for the vehicle brand. In many cases, the vehicle is inspected first, and is only repaired if it’s found to contain the parts that could be at fault. If the recall specifies this, and your car doesn’t have the problem, don’t expect the parts to be replaced anyway. If replacement is required and a large number of vehicles are involved, you may have to wait for the new parts to be built and then distributed to car dealers.

It’s also common for only specific vehicles to be affected – they might have received a bad batch of parts, or were built before an assembly problem was detected and fixed at the factory. Because of this, it’s entirely possible that your neighbor could own exactly the same year and model as your vehicle, but he gets a recall notice, and you don’t.

After the Toyata recall on January 21 car dealers have been ordered to stop selling the vehicles and the manufacturing plants have stopped production. The models, which include the popular Camry and Corolla, make up 57 percent of the automaker’s sales.

For now, the manufacturer says not to do anything unless you’re experiencing problems. Toyota said that the acceleration incidences are rare, happening when the pedal becomes worn, for instance. If you are experiencing any sticking or anything else that worries you, the company says to call your local car dealer.

Here are other tips from Toyota if you happen to be driving and the accelerator sticks:

• If you need to stop immediately, you can control the vehicle by stepping on the brake pedal with both feet using firm and steady pressure. Do not pump the brake pedal since it will deplete the vacuum utilized for the power brake assist.

• Shift the transmission gear selector to the Neutral position ((N) position) and use the brakes to make a controlled stop at the side of the road and turn off the engine.

• If unable to put the vehicle in Neutral position, turn the engine off. This will not cause loss of braking or steering control, but the power assist to these systems will be lost. If the vehicle is equipped with an Engine Start/Stop button, steadily and firmly push the button for at least three seconds to turn off the engine. Do not tap the Engine Start/Stop button.

• Turn the ignition key to the ACC position to turn off the engine if the vehicle is equipped with a conventional key-ignition. Do not remove the key from the ignition as this will lock the steering wheel.

Title washing scam results from the lack of a unified law regulating vehicle documentation in all the states. Title washing is used by car owners to “erase” the vehicle’s bad history in order to conceal from the buyer that it had a salvage title because of flood, severe accident or other damage. Title washing incidents increased after hurricane Katrina when many car dealers got stuck with excess of flood-damaged vehicles. Title washing is also frequently applied to “clipped” vehicles with the back and front coming from different cars, or rather of what was left of them after a crash.

The process of title washing is very simple. Here is how it is done. A car that is totaled by the insurance company is given a salvage title, which is often called “branding”. Then it can be repaired and resold with a low resale value. So, the car is transferred to states that don’t recognize the current title and assign it a new, clean tile. Title washing erases the branding and the car’s sale value rises again. Remember that title washed vehicles are sold not only by dealers but by individuals as well.

To avoid becoming a dealer scam victim perform VIN number check and get vehicle history report to reveal the truth about the car’s title. Once a car is assigned a salvage title this information is added to the computer database of services that provide vehicle history reports. These records remain in the database even when the car is transferred to other states.

VIN number check will protect you not just from title washing but from many other used car flaws, for example odometer rollback, salvage title or a flood damaged car.

To avoid becoming a car dealer fraud victim, one should beware of all kinds of auto financing scams. Below are some of the most common auto financing scams that are utilized by some fraudulent car dealers.

Market adjustment fee

The dealer will try to convince you that the vehicle you want is selling like hot cakes and is very popular. In order to sell you the vehicle, they will do some “market adjustments” amounting to a few thousand dollars. Even if the car you want is very popular and is very much in demand, if it is in stock you should not be tempted because getting a “popular” car is not worth it if you have to pay a few thousand dollars more. You should never pay more than the MSRP (manufacturer’s suggested retail price).

Yoyo scam

You will be allowed by the dealer to take the car home as soon as possible. The dealer will take care of the financing, a few days later he will contact you again and tell you that there was a problem with your financing plan. He will tell you to set up a new financing scheme which, of course, will be at a higher cost.

Be wary of this car dealer trick and avoid it at all costs if you detect it. If you have a bad credit standing, don’t have your financing done by the car dealer and make arrangements for your own financing. Never take the car home immediately. Wait for at least 24 hours to make sure that the processing of your financing scheme has already been completed. By allowing one whole day to pass by, you are assured that the dealer cannot use this scam on you.

Buying a new car is like buying anything else on the market, only a little more stressful.  Stressful because car dealers are trained not to take “no” for an answer, and many word games and phrases come into play to help them to get you to close the deal.

So you can be easily led to think that you are getting a good deal, when in fact you could be getting a bad deal.  This is their job; they improve their craft all day from 9:00 to 5:00.

The new car sale price trick isn’t usually included in the list of the ‘official’ car dealer scams, but it’s worth discussing.

Surely you’ve noticed how retail stores will offer a 50% off deal on a piece of merchandise, but in truth the price of the item has been increased in the first place.  This same marketing strategy applies to selling cars. If a company marks up the price by 55%, and sells it for 50% off of that price, you are actually paying 5% more for the item than it originally costs.

This is a very common way for car dealerships to work.

They may offer a $4000 cash back deal on your trade-in while the other fees and interest rates will be higher than normal. But they’re hoping that this $4000 cash back offer will temporarily blind you long enough for you to sign the papers.  So while a car dealership may make the numbers sound great, they will try to get you with the other fees.  Let them “try” whatever they want; your job is to not be fooled by their tricks and eventually not to become a car dealer fraud victim.