Dealer Fraud

It seems there are as many sales tactics to sell cars as there are cars. They are all designed to achieve the same purpose and that is to get you to sign on the dotted line. Let’s take a look at some more of the common methods out there today.

Salespeople know by now that people who come in to dealerships are naturally suspicious of salespeople and knowing this they have their own little brand of psychology to deal with and combat it.

One of the favorites is the “I’m a trustworthy salesman” garbage. Yeah right, and I have some beachfront property in Arizona to sell you. If you are a real tough customer and say something like you are going to come back tomorrow, they will say “That’s perfect, I can get you a better deal tomorrow, they are trying to get a higher profit today” like tomorrow is going to be any different?

The next dealer trick is something that anyone who has bought a car has probably seen, getting you set on a particular car and taking you on a demo ride. The walk around is designed to end up with you at the driver’s side of the car. He will have you sit in it and turn it on and then say, “Let’s go for a ride!” This works especially well if you have a family, he will enlist their help as well. Kids always want to go for a ride in a new car! While on the demo ride he will be constantly probing you and asking questions, finding out what you like and logging it in his memory.

Confusion is the next trick that is used. For example if it has been determined that you are a payment buyer the slick salesman will just keep quoting the payments to you and not even pay attention to the price of the car. They will do the same thing if you come in with a trade difference figure in mind. They will keep going to the trade allowance and try to convince you the difference doesn’t matter. The point is never tell them you only car about the payments, or your trade value, or the difference. You want to be able to keep tabs on all factors of the transaction. Also when trading beware of them trying to devalue your trade in your eyes, they will do this by running their hands over minor blemishes and making comments about it.

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.

Before a curbstoner can screw over a buyer, they must have a junk car to sell. These cars are typically obtained at the low rent auto auctions held at wrecking yard and towing company impound lots. These cars are then “prepped” for sale despite the numerous mechanical problems.

From there, many of these cars are placed on eBay, AutoTrader, AutoMart, and many other sites. These scammers use many other scamming methods while conducting their online sales with affinity fraud being one of the more popular techniques. Another popular technique is using low-resolution photos. Poor quality photos can easily hide cracked windshields, dents, rust, faded paint, and scratches.

Curbstoning in the practice of auto dealers pretending to be private sellers when selling their cars. Used car dealers engaged in this practice as a way to sell cars of substandard quality to unsuspecting buyers. Perhaps there is a street or parking lot near your residence where there are several cars up for sale. Many of these cars are placed in public view by “curbstoners.” Hence the name because they park the cars along the curb. Many of these curbstoned vehicles may very well be lemons or junk cars that car dealers could not sell on their lots to make a decent profit.

Crooked car dealers use this technique as a way to go around state laws regarding the sale of cars. States have enacted legislation that puts a cap on how many cars a private individual may buy and sell in a given period of time without having to be a licensed auto dealer. Licensed car dealers have requirements that they have to meet in order to stay in business. Curbstoners do not.

False or Altered Titles - A clear title is much more valuable than a wrecked or damaged car title. This scheme occurs when a dealer purchases a high mileage vehicle and subsequently resells it with falsified, reduced odometer reading. This is accomplished merely by tampering the high-mileage figure noted or by obtaining a new automobile title with a false mileage figure before reselling the vehicle. A professional calligrapher or an artist can perform excellent quality title alterations, which are often invisible to the naked eye.

Reassigned Titles - In most countries law allows licensed automobile dealers to transfer vehicle titles without re-registering them. How? An automobile dealer’s reassignment of the title may be attached to the original title. Numerous title reassignments may accompany an original title, as well as the washed title. An dealer may also discard, rather than alter, prior reassignments of title, making it difficult to trace ownership of the vehicle.

Title Laundering - This scheme occurs when a wrecked cars title is replaced by papers bought in another country. A dealer discards the previous title, registers his vehicle in another state with the altered odometer and then in a name of a company, then reassigns the title back to himself, now having his car registered with the new mileage.

Odometer Clockers - A dealer does minor labor to the car, replacing or changing the noticeable dings and dongs. Replaced can be floor mats, gas and brake pedals, also tires. The finish is then waxed and washed. A clocker turns back the odometer with common tools such as picks, wires, screw drivers, electronic and digital tools. Cars odometers can be rolled back in masses, because a good clocker can do this job in a matter of minutes. The vehicle will then be sold over the internet, at the dealers lot or at the auction houses to get a higher value.

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.

All one has to do is troll through the car auction listings on Ebay and you will see hundreds if not thousands of fraudulent listings. They stand out when you see a deal that is just too good to be true. There is no mention of a wreck or damage and it has low miles. This is because it is most likely a fraudulent listing.

Some you can quickly tell by the poor English in the listings description. Much of this online car fraud is from overseas. Don’t rely on the sellers feedback or country of origin as profiles have been bought and sold over the internet. Someone from Romania or Italy can easily use a bought or stolen Ebay profile with great feedback to lure unsuspecting buyers. They copy some pictures from the internet or another sellers listing and put a great price on the listing so it will sell quickly. Some buyers get so caught up in the low price that they become blind to the signs of this car fraud:

1) Poor English throughout the listing description.

2) Fraudulent escrow services (look for contact information and contact them. Also look for poor English and bad phone numbers).

3) Emails that don’t go through Ebay or Yahoo Auctions (Many of these fraudulent transactions have occurred because someone emails a bidder that is not the winning bidder and tells them they are and to send them their last bid price – All Ebay transactions will have winning bidder notifications from and through the Ebay email system).

4) Also watch out for fraudulent promises. Car salespeople at car dealerships are notorious for this. Get any promises in writing. If the car has a warranty and what is actually covered can be quite different from what the salesperson says. Remember, the salesperson doesn’t care about you and only wants a quick sale. You must make sure it has the warranty you desire.

5) Inspections and Emissions. Just as important as warranties is whether the car can even pass inspection in your state. I can not state this enough – every state has its own inspection and emission requirements.

6) Undisclosed flood and frame damage. This is a big one. Unscrupulous car dealers and body shops are selling crashed cars and flood cars, doctoring titles, not properly listing damages and repairs done to make a quick dollar. With the advent of over the internet sales which are basically done sight unseen and based on seller reputation and feedback crooks are coming out in droves. Just search for car fraud on Google or Yahoo. You will see thousands of articles, victims, etc…Be careful and do your homework. Don’t send payment or sign any paperwork until you see and checkout the car.

Online car fraud is here to stay. Take a few minutes to dig deeper into the deal. See if it is or even seems fraudulent or fishy. If it is don’t go through with it. As the old adage says, “If it sounds too good to be true, it probably is.” There are many good sellers and even car dealers out there, but there are just as many fraudulent sellers and dealers that you need to watch out for. Don’t become a victim of online car fraud.

This dealer scam happens when the finance manager insists on a deposit before you have signed the purchase contract. You will be told that the finance manager has to bring in a copy of the contract offer to his boss and he needs a deposit from you just to ensure that the boss will sign off on it. It’s just to make sure that you are “serious” about getting the car. Avoid this dealer fraud by refusing to give a deposit before the contract is finished a signed by both parties. Dealers run this scam so that they can keep you there. Tell them that the fact that you made an offer on the car shows that you are serious.

Buying a car with a bad credit is not leaving car buyers with a lot of options. Sometimes their only choice for finding finance for their new purchase is a car dealer loan.

Car dealer loan deals are not that bad as many people think. However it is true that they may hide a lot of surprises so if you are planning to use a car dealer loan you should be extra careful.

The first thing to watch out for is if the interest rate is fixed. By fixed we mean clearly stated in your contract and that all is written in a way that wouldn’t allow the car dealer to change it later. What many car dealers do is to approve your car loan application, make you sign the documents and give you the car. Later they just give you a call to say that in fact you do not qualify for this loan because you are with a bad credit (which you already know anyway) and that you will have to pay higher interest rates. If you fall into this situation either try to find financing from another place or report this scam and fight back.

Another very popular dealer scam is to make you find a co-signer for your loan dumming you that this is the only way to get finance since you have a horrible credit history. It will not be difficult to convince you – first of all it sounds reasonable and second of all the car dealer will make you believe that this will in fact repair your bad credit. Later you will discover that your name is not included in the loan documents and that the loan in the name of the “co-signer” although you are repaying it. Not only that this is in fact illegal and may lead to serious penalties but it is not helping your bad credit at all. If a car dealer offers such thing to you must refuse.

If you are a bad credit customer and have difficulties finding a loan, it is quite obvious that you should not overstretch. This means to buy a reasonably priced car and not to buy any extras such as extended warranty. However many car dealers will try to trick you by making you believe you must buy a warranty that will increase your loan in order to qualify. Since you are desperate in getting the car you would say OK. However if you think for a second you will easily see that this is simple dealer  trick to increase your loan.

This scam happens when you have successfully negotiated a car, and the salesman suddenly gets a phone call with an offer for the car that is lower than the price you agreed on. Then he casually lets you hear him state that he will call the man on the phone right back if you opt out of the deal. Next, he tries to talk you down from your set upon price to compete with the guy on the phone’s offer. Avoid this dealer fraud by telling the salesman that you will understand if he chooses to take the better offer.