Dealer Fraud

The purchase of a new car can be a very tiring experience, especially when you are shopping at a car dealer who wants to trick you to buy a car that is not in your price range, or wants to sell you accessories that you don’t necessarily need. Another common practice for a car dealer can be convincing you to lease even though it really is not the best choice for you. In fact, there is a huge list of car dealer scams and tricks. However, it is still possible to purchase a vehicle and stay clear of all these car fraud. Here are a few tips to use when you shop for a new car.

Remember that there are many dishonest car dealers in the industry who will do anything to increase the purchase price of the car you intend to buy, thus making more profit. So, the best way to avoid dealer fraud is to be prepared with information about buying a new car and this will help you avoid Car Buying Scams.

It is very important to choose the best time for shopping for a new car. First of all try to shop during the week, rather than on the weekend. It will allow the dealer to spend more time on negotiating, because there will probably be a few customers at the dealership lined up waiting to buy a car.

Another good time can be the end of each month and the end of the year. During this time most of car dealers are trying to meet sales quotas and move inventory, so they will be willing to negotiating a good purchase price.

Always keep in mind that the dealer may tell you that he can’t negotiate on the prices. This is probably not true and is another car scam used by the car dealer. If you see that the car dealer is not willing to negotiate, just walk away and try to shop somewhere else.

Odometer fraud continues to be a serious issue today. More than 450,000 vehicles, according to 2002 NHTSA estimate, are sold each year in US with false odometer readings.
Today almost all modern cars have electronic digital odometers which are supposed to make the tampering with the mileage more difficult. However, it turns out, that electronic odometers are even easier to roll back having a special software. So how can you discover odometer fraud?

• Check the car history records

Check the used car history report - even though it will not give you a 100% guarantee that the car is perfect, it’s well worth the money spent. The car may turn out to be not even worth a look. A car history report may help you to uncover not only the mileage rollback, but also the potential problems car might have had in the past such as accidents, flood damage, rental use, etc.

• Have a look under the hood.

There should be a paper record with mileage and date wrapped around some of the A/C lines, if the Airconditioning system has been serviced,
If the timing belt has been replaced, there should be a sticker that states when and at what mileage the timing belt has been replaced.

• Have a close look at the odometer

If the odometer is mechanical, take a close look at the digits. Are the digits straight? Do the odometer readings actually change when the car is driven? Try to look for fingerprints, scratches or any other signs of odometer tampering under the plastic cover (glass).

These are some of the tips that may help you avoid dealer fraud, however if you are already a victim of dealer fraud, don’t hesitate to contact a dealer fraud attorney in your state.

To secure yourself from car dealership tricks, you should learn dealer scams. In this blog we will discuss the situations when a car dealership financed contract may be cancelled.

• If you buy a car that is financed through the dealership, the dealer has a right to cancel the contract, but only if you are notified within 10 days of the date on the purchase contract.

It is based on the language of the purchase contract. Look at your purchase contract. That’s the long yellow document containing “RETAIL INSTALLMENT SALES CONTRACT” note at the top. Turn to the back of the purchase contract, and find the box with the “Seller’s Right to Cancel” note. It is at the bottom of the second column.
Car dealers are in the business of selling vehicles to consumers, not financing cars that consumers buy. So, this box advises you that after signing the purchase contract and leaving with the car, the dealership is going to find a finance company or bank to buy your contract. It gives an auto dealer the opportunity to find someone to buy your purchase contract. Most of the time this is not a problem. However, if the car dealer cannot find someone to buy your purchase contract, it can cancel the purchase contract. But, the car dealer must notify you within 10 days of the date on the purchase contract. If it does not, then the purchase is final and may not be canceled.

• If the car dealer exercises his/her right to cancel the purchase contract within 10 days, you are not required to sign a second contract to purchase that same car.

Let us repeat this. A car dealer cannot force you to sign a second contract. If the car dealer cancels the purchase contract within 10 days, you are obligated to return the car, and the car dealer must give you back any down payment or trade-in that you gave with the purchase.

When you go to the dealership to buy a new car you should remember that everything is negotiable. Most car buyers become a victim of dealer fraud and different dealer tricks because they do not know how to negotiate. A car is a major purchase and especially during the crisis, each consumer needs to get the most value out of their money.

Remember that you will be dealing with salespeople who have most likely been trained to negotiate the best deal for the car dealer and not for you. If you do not know how to negotiate or are not comfortable with negotiating, then the chances increase for you to being scammed by a car dealer.

The main problem is that most car buyers most are not prepared when they go to a dealerships. Some of them don’t know what they want, how much they want to spend, what a good interest rate on a loan is, or what add-ons they may want. The best way to avoid dealer fraud is prepare and know all this information before going to look for a car. If you are not well informed, then a car dealer can easily use any one of Car Buying Scams on you.

Another good thing to do is being confident enough to stand firm with what you want. Never let a car dealer to convince you to spend more money by trying to sell you an upgraded vehicle. So remember, that the more knowledge of buying a new car you have, the easier it will be for you to negotiate the best deal you can on a new car.

Thoroughly test drive the car you intend to buy and have it checked out by your own mechanic. Very often defective cars are sold at dealerships or public auction where car buyers forgot that the sale car has not been test driven.

Remember that if the car was in previous accident damage it seriously depreciates its value and safety. Look for a kitchen magnet that will not stick to a fender (may indicate bondo), a plastic filler used in body repair. Always do a visual inspection of the car. Check for paint overspray in the door jambs, strange weld marks under the carpeting in the trunk, door and windows that are not air tight, wrinkles or color fading, unevenly worn tires, steering wheel drift or uneven gaps in the body seams. Even some new cars have been sold damaged.

Car dealers know that the average consumer will not read most of a pre-printed document and most of the time they take advantage of this to make more profit. It is common for dealers to promise consumers to help arrange the financing with a third party lender. This is because financing is complex and confusinf and dealers routine hold themselves out as experts in auto finance. Car buyers prefer all the terms explained by the dealer rather than read all documents themselves. This is when the car dealers scam you.

Never sign the deal on the first day. Take some time to think it over. Ask the dealer for a copy of all documents; take home and read each line carefully. Never trust the dealer to do calculations for you, otherwise you may be a victim of dealer fraud.

Many consumers become victims of dealer fraud after they have already closed the deal. This is when the dealer gets you on the extras and the warranties.

The extras may include rust proofing, scotch guarding and others. The trickiest closing cost scam is the extended warranty scam. This warranty is not the one factory gives you for the car and usually covers the cost of repairs.

Often consumers are not informed that extended warranties cover mainly small repairs and don’t cover major problems with the car. Also never consider buying an extended warranty if you are only leasing the car for a small time period like 36 months. It’s a good idea to purchase an extended warranty not directly from the dealer, but from online warranty companies.

Other extras that dealers use to offer you at closing may include rust proofing, paint sealant, car alarm, credit/insurance costs, detailing and pin striping. You should try to avoid purchasing these extras. Remember that you can save a lot of money if you purchase them somewhere else as well as avoid dealer fraud.

If you are thinking about buying a new car and are confused about the terms and are concerned about being switched into a vehicle lease, use the following tips:

1. Remember that when you lease a car, you are actually borrowing it and not buying. The lease may seem to be less expensive at the first sight but there are often many hidden fees which make the lease more expensive. There are hidden fees for excess mileage and wear and tear to the vehicle. Also if you lease a vehicle that has a lease allowance of 25,000 miles a year and at the end of the year you have additional 10,000 miles you will be penalized.

2. One of the reasons the lease of the vehicle can be more expansive is the fact that you are paying for the use of the vehicle and you will own nothing at the end of the contract. Furthermore at the end of the lease you don’t have a trade-in vehicle. Many car dealers trick customers by telling them that they can trade in a lease at lease end and receive credit. This is simply a dealer trick used to scam you.

3. If at the end of the lease you have any outstanding obligation such as mileage penalty, condition penalty, unpaid lease payments, then these are often rolled into your next vehicle purchase or lease.

4. To avoid dealer fraud don’t sign any documents on the spot at the dealership. First ask the dealer to take the lease or purchase contract home and carefully read it.

If you believe you have become the victim of lease fraud or you have any questions about your contract contact a qualified dealer fraud attorney.

Many cars are sold each year in America and financing is obtained in order to pay for them. You might think that receiving financing is relatively easy, however it is not always so. If you consider buying a new car you should first read these tips on automobile financing before you head to your local dealership.

Compare Rates
You can get financing for your vehicle from a number of lending institutions such as banks, online lenders and the dealership. The difference is they will offer different general requirements, interest rates as well as fee structures. Make sure you evaluate as many financing options as possible and choose the best deal for you.

Credit Score
Your credit score is a very important factor in obtaining automobile financing. It generally defines the interest rates and down payment requirements you will receive and whether or not you receive financing. Make sure you know your credit score before you ever head to the dealership. If your credit score is above 600 then you should be able to get financing without too much trouble, however if your score is below 600 you should spend a few months lowering your bills and focusing on increasing your credit score so you can not only qualify for financing, but also for a great interest rate in order to buy that new car.

Get Pre-Approved
If you have an option to get pre-approved for auto financing then you should do so before going to the dealership. When you are pre-approved you will be able to negotiate with the dealer as if you had cash in hand.

Follow these tips and will be able to get the best financing deal available. You will be able to save money by avoiding dealer fraud and purchase the car you want.

Most consumers rely on the internet too much when do a research before buying a new car. However, it’s better if you do a bit more research than what the World Wide Web has to offer. You are most likely mistaken if you think that all you need to know to avoid dealer fraud is the dealer invoice amount that you so diligently down loaded from the internet to get the best price. This is not the same as dealer cost. Another mistake common with consumers do not know the actual prices offered for the same vehicle by other dealers in your area. If you believe that a dealer who belongs to an internet buying service will be giving you the best price in town then think again. Make sure you visit as many dealers as you can to discuss prices of the same vehicle. Also make double sure they have the same in engine size and all add on accessories.

It is also a good idea to have your credit report with you when you go to the dealership. Also make sure you have learned to calculate both loan payment amounts and lease payment amounts.

You can avoid dealer financing fraud if you check with other lenders on their rates or even pre-qualify yourself for the best loan you can find before you start visiting you local dealers.