Dealer Fraud

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.

Auto dealer fraud can crop up at almost any stage of the vehicle purchase process, from advertising to signing on the dotted line. Here are some common states that can give rise to auto dealer fraud:

•   Incorrectly inflating a vehicle’s invoice price - The “invoice” is the amount that the auto dealer is charged for the vehicle, by the vehicle manufacturer. Examples of incorrect inflation of the invoice price include making additions to the invoice figure, when those charges were initially included in the invoice price (i.e. “destination” charges).

•    “Bait and Switch” - A form of false or unreliable advertising, in which a car dealer attracts customers to the dealership by advertising one vehicle at a certain price, then informs the customer that the particular vehicle is no longer available before using aggressive tactics to sell a different, more expensive vehicle.

•   Covering “Add-On” Up- covering up the inclusion of certain optional “add-ons” during the negotiation, or the costs of those add-ons, but including those add-ons in the final vehicle price.

•    Auto Trade-Ins - underestimating and underpaying for a car buyer’s trade-in auto.

•    “New” Dealer Returns - Selling a vehicle as “new” that was actually returned to the dealer because of a defect or persistent mechanical problem or was returned shortly after purchase for some other reason.

•    Recovered and Flood-Damaged Vehicles - In used car sales, failing to disclose that a vehicle has been designated “recovered” after a car accident, or has been flood-damaged.

•    Odometer Backoff- In used car sales, odometer “backoff” are intended to conceal a vehicle’s actual mileage.

Odometer fraud is the illegal process of rolling back the vehicle’s odometers in order to make it appear that vehicles have lower mileage than they actually do. Odometer fraud occurs when the vehicle seller fallaciously represents the actual mileage of a vehicle to the buyer.

Odometer tampering is not only illegal, but expensive. As the buyer thinks the car has fewer miles, he/she pays more for the car, more in insurance and repairs. The National Highway Traffic Safety Administration guesstimates - odometer fraud costs buyers about $10 billion every year.

Here are steps to avoid odometer fraud.

1.    Compare the present mileage with the odometer statement the seller received when he/she bought the car.

2.    Check the tires. The original tires of the car should last for about 60,000 miles, so new tires on a car with low mileage should alert you to take a closer look.

3.    Look for things that indicate the mileage of the car. Oil change prompt stickers, warranty cards and service receipts will typically have the mileage noted.

4.    Have a trustworthy mechanic inspect the car thoroughly. The mechanic should look for the problems with the emissions system. These areas will show signs of high mileage. In addition ask the mechanic to see whether the odometer cover has been removed.

5.    Be especially attentive when buying certain models: Popular models for rolling back miles include sport utility vehicles, Chevy Luminas, Ford Tauruses and Chrysler minivans.

6.    Be wary of retired, low-mileage fleet vehicles. Unfair buyers usually clean the cars up, put on a new brake pedal cover, roll back the odometer and resell it for a tidy profit. Cars like this are usually driven more than 30,000 miles a year.

Feel free to call an experienced car dealer fraud lawyer Hovanes Margarian for valuable advice and help.

Find out how old the car is

The car may look great, but if it is not a new one, it may not be worth purchasing.

Ask for the service records

Having on your hands the service records, you will to see how often the oil has been changed, tires balanced and rotated, as well as any leaks or other repairs that might have befallen to your beloved vehicle.

Take the car to your mechanic

In case it is obvious that you are serious about buying that car, auto dealers never mind if you take the vehicle to your mechanic for a quick engine check.

Open the hood yourself

Check whether the cables are in good shape, there are no leaks, the spark plugs are new and functional, and that the oil is clean. These are good signs that the dealership has already prepped the car for sale.

Take the car for a test drive

While driving the car out on an open road, try to press the gas pedal to the floor to see if it chokes or lurches at full throttle. In case it does, take the car back to the dealer to look at it to ensure there’s nothing seriously wrong with the car.

Check the brakes

While driving the car; first, check to ensure no one is behind you, and then take the car to a high rate of speed before popping the brakes. This will help you determine their condition and how well the car handles when hitting the brakes quickly.

Older cars have great qualities, and can be great, reliable transportation for a reasonable price. Take the extra time to ensure that your new “gently used” vehicle is not a lemon, and you will be able to enjoy it for years to come.

If all else fails try turning to an experienced car dealer fraud attorney for valuable advice and help.

Car financing is a common incident; yet it does not mean that you can take it carelessly. You need to be aware of the different financing choices that exist. A little investigation may help you to obtain a superior financing deal.
Be wary of someone who tries to convince you that financing a car is a better deal than paying cash for it. It is not excluded that the premiums could possibly be reasonable, collectively by taking out a loan and paying interest, you will be paying much more for the vehicle than you would if you were to pay cash for it. The only method that financing could be less expensive than paying cash is if you can put the cash to work for you and earn more on that money than the interest that you would have to pay for the loan.
Some car dealers will try to prove to you that financing is cheaper. In reality, they might offer you some software program that misrepresents the “benefits” of financing versus paying cash for a vehicle. The programmed cost evaluation that they present to you comes out to “demonstrate” that you can save money by financing at one interest rate and investing the cash not spent in a certificate of deposit (CD) at a financial institution at a lower rate. The only real way you could end up ahead in this situation would be by borrowing at a lower interest rate and investing the money at a higher interest rate. It is improbable that you will be able to find such an arrangement.
Auto financing is something more serious than you take it. Be sure you are not being taken advantage of. Search for loans by yourself. Ask your bank or credit union. Check internet sites. Ask the automobile dealership. Assess rates and terms from several loan companies.
If you have any further concerns on this topic, feel free to contact car dealer fraud attorney Hovanes Margarian.

Scam 4: The pay off loan or lease scam

The car dealer’s newspaper advertisement is constantly saying that they will pay off your entire remaining loan or lease. This is true literally, but there is no hint about the consequences of breaking the loan or lease contract. Actually the penalty for breaking the contract for your current car costs thousands of dollars. Of course, the car dealer pays you off the remaining loan or lease, but the penalty of thousands of dollars is subject to you. The ads are just trying to mislead you into buying their car so that they can profit more.

Never believe in these misleading ads, stay in your present loan contract and never break the contract.

Scam 5: The forced warranty scam

This car scam is easy to detect. Just after you have made an agreement with the car dealer and before you sign the contract, the sales manager will tell you that you cannot get the loan unless you buy the “required” warranty. They would say that the warranty is a necessity for the loan because the bank won’t allow it if you don’t have it.

Yet again, the easiest way to avoid this forced warranty scam is not to finance your car from car dealers.

Scam 6: The forget trade in scam

This is always found after several months of car purchase. The car dealer informs you that they would pay off your remaining loan for your old car that has been traded in, but they never do. You are in charge for your loan responsibility, not the dealer. The bank does not know the agreement between you and the dealer and they hold you responsible for the late payments.

The best way to pass up this scam is to pay off your existing liabilities on your old car before you buy a new car. This way you can get the title from the bank after you eliminate the debt, sell your old car and then buy a new car without falling for the scam.

Scam 1: The straw purchase scam

Here a straw purchase means someone purchases an automobile for other people who, due to poor credit, cannot purchase it themselves.

In order to make you buy the car without any hesitation, the car dealer may assure you that you can get a car loan even if your credit record is not very good. Moreover, they will tell you that you can build your credit by using this car loan, and the only way to do this is to find a co-signer for your contract. And next you will find out that the co-signer is not the primary borrower of this loan but the only borrower-your name is not even on the contract.

It is difficult to detect the straw purchase scam. You can avoid it in advance. Remember, never sign contracts separately, as this is a good chance for the dealers to perform the straw purchase scam on you.

Scam 2: The check bounce scam

This scam occurs in case you are using a credit union or an online car finance site. For getting the commission to sell you the car dealer’s financing, the car dealer will refuse your bank draft first and then lie to you using the reason that the online lender always bounces check. So you have to agree with their offer of financing your car purchase, even though that car dealer financing comes with a higher ARP.

Scam 3: The spot delivery scam

A spot delivery scam occurs a few weeks after the car purchase when the car dealer calls you and says that your credit score is too low to have the low ARP you signed on the contract. But in fact there is no problem with your credit score. This is just a spot delivery scam.

The best way to avoid this kind of scam is to use your own financing instead of using the financing that the car dealer offers you. Never give the car dealer any chance to trick you.

For those who are in need of cash to finance the purchase of a car, taking up an auto finance loan is the only way out. When a person is granted approval for an auto finance loan, the lender normally hands him/her the exact amount that he/she has applied for. An auto finance loan is a kind of loan that gives the individual an opportunity to own a car he/she was eager to have.

Today most people or organizations cannot be trusted because their word is no longer their bonds and their promises are no longer kept. The only way you can be recommended to avoid being scammed when applying for an online auto finance loan, is that you should be very watchful and careful. In case you are not watchful or careful, the possibility that you might be defrauded and robbed of your hard-earned money will increase surely.

Recently, online auto finance loan frauds and scams are widely spread. Auto finance loan scam is a term that is used for describing the dubious strategy that is employed by most internet criminals and scam artists in depriving innocent and unsuspecting victims of their hard-earned money.

Car finance loan scams are usually made by dirty criminals, and low life scum bergs that have no integrity. Their main vision is to rob innocent and unsuspecting people.

To avoid being a victim of auto finance fraud, it would be better to stick to only those lenders or auto finance institutions whose identity you are certain of. Always avoid doing business with a lender who has not been highly recommended.

Used-car buying is a great business wrought with scams. Used-car sellers need to be informed of possible car scams. Here are some of the most common ones:
•    Certified Check Scams - This scam is often done on sellers of used cars over the Internet. A buyer informs that he/she wants to buy the car and pay with a cashier’s check. When it comes to the last minute, the buyer brings some reasons that he/she needs to write the check for more money and have the seller wire him/her the difference. Then the check appears a fake one, and this fact can be discovered long after the seller has wired the money. Furthermore, the seller is responsible for covering the money for the fake check. In order to avoid check scams you can call the issuing bank before you accept the check and wait for the check to clear before you transfer the car into the buyer’s name.
•    Bogus Escrow Services - Online car sellers regularly use escrow services to collect and verify payment from a buyer. The money is held by the service until all parties are pleased with the sale. Assure you check out an escrow service, as there have been some cases of  escrow fraud.
•    False Auctions - According to the Federal Trade Commission, the most common frequently Internet fraud occurs on auction sites. Research the buying history in details and never ship the vehicle before the money has been received.
One of the best ways to avoid most auto scams is not to transfer ownership of your car until you have the cash in your hand. You either get cash from the buyer or wait for the cashier’s check to clear. Never take personal checks and allow buyers to pay the car off over time. To avoid car scams follow these few precautions and your car-selling experience will go smoothly.

You can also get a consultation from a Car Dealer Fraud Attorney.