Dealer Fraud

Consider never financing a vehicle through the dealership because when you see the finance manager whatever payments, interest rate, etc. you had may get tossed out and the dealer fraud may begin, like “stuffing” your contract with extras like unnecessary warranties, costly etching, glazing, environmental packages, etc., and the dealer may try adding it to your contract! Of course, these extras are where the dealership makes lots of profit.

Finance managers may ask you or even ask you to ask your employer to lie about your income. If you agree you could possibly end up getting charged with a felony, not the dealer, for knowingly defrauding the lender! New car dealerships have even been accused by former employees of forging car buyers‘ signatures to lenders!

Used cars may be wrecked, re-built and re-sold legally to unsuspecting buyers! A clean title and bill of health can even be acquired by the used car seller and the used car buyer may never know the car had been wrecked and/or “totaled” in an accident!

The only way to ever know a car’s true condition is to have a good independent mechanic check it out before you buy.

A flood car is one that has been caught in a flood and underwater then salvaged and cleaned up for re-sale to unsuspecting car buyers and even used car dealers! Consequently, you cannot even trust that the title held by the used car dealer is legitimate, even though, by law, the title of a flood car is supposed to state that the car has been under water.

In essence, you cannot trust what the used car dealer knows so you must inspect used vehicles thoroughly yourself or have a good mechanic do it. Check under the hood for corrosion and look for water lines indicating how high the water level may have reached during a flood. Also, check under the dashboard, seats and floor mats for signs of dirt and/or sand.

Too many new car dealers selling so-called “certified” used cars say that they have no way of making absolutely sure that the used cars they sell have not be involved in major collisions and have been re-built to be re-sold to unsuspecting car buyers, who are not made aware the cars were once wrecked! However, this is hardly believable because if independent car mechanics can easily spot re-built wrecks then so can car dealers!
Only around half of the motor vehicle departments in all 50 states in United States even supply local governments with enough information to determine if a used car has been completely wrecked then re-built for re-sale to the public! This makes the so-called “used car search and information” internet services or independent services being sold to consumers for a fee not very practical and essentially unable to really know if a used car has ever been wrecked or not. Consequently, hundreds of thousands of cars that get “totaled”, or completely wrecked beyond repair, get re-built for re-sale and end up being bought and driven by unsuspecting car buyers!
Too often these cars end up getting involved in collisions again that may kill the driver and passengers because the re-built wrecks were not re-built for safety but were re-built just to “look” good to prospective car buyers! Re-built wrecks may not even have proper functioning airbags and other safety equipment put back into them and few, if any, proper repairs may be made to ensure the re-built wrecks are even safe to drive again!
Your only hope is to have a competent, independent mechanic that does not work for the car dealer inspect the used car you want to buy before you buy it to determine if the car has been wrecked then re-built. Once you buy the car from the dealer it may be too late to get customer satisfaction even if your re-built wreck case ends up in a court of law!

Dealerships too often “markup” their car loans interest rates which are initially approved by the banks or money lenders that the dealership goes to on behalf of car buyers who are looking for the lowest possible interest rate! For example, the “deal” may go down something like this:
You go into a dealership to buy a car and eventually you will meet the dealership’s finance manager. His job is to make as much money for the dealership as he can!
He tells you that your car loan has been “shopped around” to different lenders and the best possible interest rate for your particular car loan is, for example, let’s say, 14%. However, the lender may have actually approved your car loan at an interest rate as low as 11%! This means he effectively is “marking up” your interest rate by 3%, thus overcharging you probably thousands of dollars!
Making matters worse, the dealership and lender may end up splitting the profit they make when overcharging you! The 3% you are overcharged in this case may add thousands of dollars to the cost of your car over the course of the loan!
Possibly consider not even going through the dealership for a car loan and shop around on your own for lenders. Or, when the car dealer’s finance manager offers you his “so-called” best possible interest rate, tell him it is too high and if he cannot lower it you may have to shop for a car elsewhere!

Believe it or not, there are usually no hidden tricks to these super-low financing rates. They truly are great deals offered by the manufacturers to help the dealers move out certain models which may be lagging in sales. There are, however, some things you should be aware of:

• Only about 20% of car buyers actually qualify for these special loans. You need a good credit score (usually 680 or higher).
• The dealership ends up making far less money on these special financing deals than they would on regular financing, so the dealership’s Business Manager may try to convince you that you don’t qualify for the low rate. If you know that your credit score is good, don’t fall for that.
• You usually have a choice between the low financing rate and a rebate. For buyers who need the cash for their down payment, the rebate may be a better way to go.
• These special low-financing rates are sometimes only applicable to short-term auto loans (2-3 years) and do not apply to the typical five-year loans that most buyers prefer.

Buying a car is not the same as leasing a car. Although most car buyers know the difference, many do not.

If you were told you were buying a car, only to find after you went home that the contract you signed was in fact a lease, you’ve been scammed. This one of the most common auto fraud. If the dealership refuses to honor the representations of its sales staff, see a dealer fraud lawyer.

Sometimes car dealerships make more money leasing cars than selling them. Pushing cars out the door isn’t always enough. Margins are tight and profits are slim so some dealerships do their best to herd car buyers towards a leasing option. One way car dealers trick people into leasing is by quoting new cars at prices so highly inflated that the leasing option appears to be a better deal. The money you save if you fall for this is only an illusion. In reality you’ll pay far more to lease a vehicle than purchase it. Here’s another example that shows how doing your homework beforehand can save you a ton of cash at a car dealership. We can’t say enough about doing your due diligence and research all of the competitive rates on car loans, leases and prices of vehicles before you set foot on a dealer’s lot.

It never ceases to amaze us how cunning some car dealers are — they seem to constantly think of new ways to take advantage of car buyers. One of the most recent car dealer ploys is Spot Delivery.

Spot Delivery: You’ve chosen the car you want, filled out all the paperwork (including the car loan application with the car dealer’s finance department). The car dealer tells you that although your loan hasn’t been “officially” approved yet, you can drive the car home anyway.

Don’t.

Here’s what can happen if you do: A few days later, you’ll get a call from the car dealership saying your loan wasn’t approved at the interest rate you discussed. However, you were approved at a higher rate.

This means that you’ll likely pay thousands of dollars more than you expected.

Further, if you try to call off the deal, the car dealer will either tell you that they already sold your trade-in so you have no options, or they simply will say they’ll sue you if you don’t agree to the new terms.

The worst part is that you probably are stuck, because the loan agreement included a “writ of rescission,” which means that you agreed to pay a higher interest rate if you did not qualify for the loan at the original, agreed-upon rate.

Be careful. And don’t take your new car home from the car dealer until all the i’s are dotted and the t’s are crossed.