Dealer Fraud

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.

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.

With all the latest progress in computers, the internet and, etc… it was predictable that there would be a related progress in auto fraud too.  The latest method of which is car cloning.  This is the point where thieves take the identification pieces (VIN plates, factory stickers and title work) on a stolen vehicle and replace them with pieces from a legitimate vehicle. Afterwords the car is sold to unsuspecting buyers through online auctions and local newspapers.

The trouble with these cloned cars is that when the car appears as stolen, the car will be confiscated and the buyer will be out of their purchase price plus the amount of the outstanding loan.  It is impossible to catch the fraud criminals.  They usually will have a title in other person’s name and will basically sell it on behalf of a friend or a relative.  This is curb-stoning which is prohibited in most states, but for the most part goes unpunished because there is no way to trace the fraudsters.

In fact cloned cars are a huge problem.  It is hard to catch car cloners.  It results in quick financial gain for the thieves According to the National Insurance Crime Bureau (NICB), “New VIN’s, manufacturing certificates and tags can all be made.  They take a good number, dummy up a VIN plate and then sell it for top dollar”. Cloned cars give thieves an easy way to quick cash. It is profitable to clone a car than to sell the stolen parts, besides, it is also nearly impossible to be caught since no one knows what is going on versus an illegal chop shop which has a very limited existence before too many people know about it and its whereabouts are eventually leaked to the authorities. The stolen parts of the cloned car are much more easily traced than the car itself.

There are some ways to avoid auto warranty scams: investigate, verify references, and verify independently. Spend some time and efforts to lessen the risk of becoming a victim of auto warranty scams. Be more informed and better protected.

When it comes to purchasing an auto warranty, write down all the services included. Seek for details on participating auto garages. Pay close attention to the length of coverage that is provided, both in mileage and in years.

Ensure that you have read the fine print to find out who is responsible for payment to the auto garage at the time the service is provided. Stay away from any agreement requiring paying the costs directly with a promise of later reimbursement. The risk of auto fraud is very high with these types of arrangements. Ask if there are any limits on the year, model and make of vehicle that is eligible for this coverage. Air conditioning, power trains usually have different time frames and mileage values, along with a detailed list of exactly what components are covered.

Make contact with at least four different auto garages which take part in the program. Visit one and talk with the service staff to prove that the warranty coverage would be honored. All auto mechanic licenses should be posted. If you do not see any, then this is an unlicensed shop and you should not purchase the auto warranty.

The most common auto warranty scams offer complete vehicle coverage, with no restrictions on time or mileage, for a reasonable fee. There are no restrictions on the auto garages that you can use and all fees are due upon signing. Remember that auto warranties offered by companies based in another country are rarely legitimate. Due to their location, it will be very difficult to sue them if required. Save your money and avoid these types of programs.
However if you have already become a victim of auto warranty scams, your prudent choice is contacting an experienced Los Angeles car fraud attorney for valuable help and consultation.

If you have decided to buy a car from a dealership then you should know that there is a possibility of ending up with a lemon car. Being cautious and taking time for thorough research is the only way to avoid becoming a car fraud victim. Here are a few steps that may be helpful when buying a used car.

1.    Check the model’s reliability records

Checking the model’s reliability records is a great way to avoid auto fraud. This step is not only helpful, but also is fairly easy to take. You may check online or in various consumer reports publications offering annual vehicle profiles.

2.    Check the vehicle’s history

The common cost of a vehicle history report is about $15.  Never save money on this as a vehicle history report may alert you to a number of potential problems as you will learn the about the car’s previous major damages and its actual odometer reading.

3.    Conduct a check of the car interior

When checking the car’s interior, pay attention to the possible missing handles, knobs or buttons, worn pedals and sagging driver’s seats. Also check to see the seatbelts work well or there is no damage to the dashboard. Generally these are signs of high mileage, regardless of the odometer reading.

4.    Conduct a check of the car exterior

When checking the car’s exterior look for chipped paint, dents, mismatched or replaced car parts. Minor exterior damages or gaps between body panels may be signs of a previous accident. Check to see all doors and the trunk open and close accurately. Note that inconsistent welding marks can be signs cheap repair jobs.

5.    Take a test drive

There are some common rules for taking a test drive.

•    Make frequent stops to ensure that the brakes work properly.
•    Listen for scraping noises that might indicate damaged rotors.
•    The brake pedal should feel firm and there should be no shaking or sputtering.
•    When turning the wheel, make certain that there are no abnormal clicking sounds, as these can indicate defective axles.
•    Release the wheel while driving straight to see that it does not veer left or right, as this might indicate alignment or suspension problems.

Step1:Be friends with a mechanic
No one but a good mechanic can inform you about the exact problems of the particular car brand or model you are eager to buy. You might think that you definitely know the type of a vehicle you want to buy, but a friendly advice of an experienced mechanic can help you to find out the best manufacturer.

Step 2: Organize for financing through your bank
Usually banks suggest a considerably lower rate than what a used car dealership will offer. If you have a previous lending and good standing history with your bank you can receive up to 90 percent financing. By protecting an auto loan through your bank for the amount you can afford before purchasing a car, you’ll find yourself in a far more control when negotiating the final price.

Step3: Ask for a copy of the warranty, read it attentively
As a rule it is not in the dealer’s best interests to provide “dealer warranties”. These documents promise comprehensive coverage and prompt service for the vehicle you buy. The phrase “wear and tear items not included” is a common one in dealer warranties, and one you will hear over and over again if your car begins to have problems. Be attentive and demand the warranty to protect yourself from Lemon fraud.

Step 4: Take it for a long rotate
Leave some of your documents with the dealer and take the car out for a while. Drive the car in city streets with heavy traffic, straight and curvy roads. Test the brake pedal, steering, air conditioning and gauges. Take your mechanic and let him take a look under the hood.

Step 5: Don’t be in a hurry
Above all avoid impulse buying. It is only the salesman’s benefit. It is to your good to do as much research as possible to insure you purchase a safe and reliable vehicle. You should be ready to spend some days doing plenty of research before making a used car purchase.

There are several things you should know and consider before you decide to trade in your car. Learn the most common scams and dealer tricks the car dealers may try to use when you trade in your car.

Generally, used car dealers make 2 to 3 times more in profit from the sale of used car trade ins than they do from selling new cars. When you trade in your car the dealer offers you much less than what your old car is worth, because he knows that most consumers have no idea what is the value of their car.

In case the car dealer pays what your used car is worth, he will later raise the selling price of your new car. The dealer will try to add a lot of add-ons and extra fees to the price of the car you’re buying.

Some consumers think that they you will save some time when you trade in your car at the dealership. However, the truth is it’s better to spent just a little bit more time to sell your car yourself and get an easy $300 to $1000 more for it. Beside you will be able to avoid the trade-in vehicle scams of the dealer.

Used car buyers should be especially aware of one of the latest used car scams, which happen when used car dealers or individuals try to sell cars that do not even belong to them.

An individual who is not the true owner of an automobile cannot pass good title on the vehicle. That is why a car buyer of the used car should always ask to see the title for the car prior to purchasing it or signing any documents. This way a purchaser will be able to ensure that the individual who is transferring the vehicle title car has the legal right to do so.

Market adjustment fee is a scam that usually takes place with vehicles that go out of stock quickly. These are extra fees which car dealers add onto the price of certain types of popular vehicles. Since these vehicles are such a hot item, car dealers try to add this extra fee onto the vehicle purchase price. However, the truth is, no matter how popular a vehicle is, there is no reason for the consumer to have to pay above the MSRP.

Consumers can easily avoid this dealer scam if they never agree to pay more than the MSRP. By paying more than the MSRP, the vehicle purchaser is in reality saying that this type of dealer scam is okay and this should not be the case.

The total amount that an individual pays for a vehicle should be one of the common dealership scam. There have been a lot of cases when car dealer has quoted a set price for the total purchase, however when the prospective car purchasers have come to sign the paperwork, they noticed that there was a large discrepancy between what was quoted by the dealer and what is being charged in the end. What may be even worse some consumers do sign the paperwork without thoroughly reading it and become a victim of this dealer scam. Consumers need to be aware of this type of deals.

The best way to avoid this auto fraud is to ensure that what the dealer has quoted is the exact figure that will be on the paperwork. Read the paperwork carefully and let the car dealer know that you will not pay a penny more than the quoted price.