Dealer Fraud

There are several common car trade in price scams, tricks, and bargaining tactics when buying a new or used car from a dealer. Knowledge of these practices will give a car buyer an advantage one can at least be aware of what is happening in the process. Knowing how to avoid them is even more helpful because the result can be a far more attractive price one receives for a traded vehicle.

Negotiating Trade in Price

Right from the very beginning, the trade in price should be negotiated separately from the purchase price of the car one is interested in buying. Indicating real interest in buying a car will help in the negotiating process, but when asked about price, a buyer should persistently insist that the dealer value the trade in vehicle before details of the purchase are discussed. The two dealings should be treated as completely separate transactions.

Purchase Price Up Front

Several customers may prefer to negotiate the purchase price first, relying on publically available resources that are very clear on trade in value. As many dealers have a preference to pay the wholesale price, claiming that they have no intention of taking the vehicle into their own inventory, if one’s car is easily salable or an “in-demand” make or model, insisting on a higher price is important. The dealer is not obliged to wholesale the vehicle for a low price after the sale is complete. It is not obligated for the buyer to sell at a disadvantageous price.

Misinformation Provided

Extra similar scams include so-called mistakes as to the model or features on the trade in car. Asking early in the process if the dealer will purchase your car regardless of what you ultimately decide may help avoid some of these dealer tricks but being watchful and sticking to your budget and car-buying plan is critical.

Never

• NEVER buy a car that you have not seen in real life
• NEVER buy a car that have not been inspected by a professional mechanic
• NEVER transfer your money bank-to-bank during a deal
• NEVER belief a dealer who says that the transaction is guaranteed. The online marketplace such as eBay, Craigslist, PayPal and others do not exclude, that people from around the world using their services are legal.
• NEVER buy a car from someone who is not capable or unwilling to meet you face to face
• NEVER make a deal with sellers who want to conclude a transaction as quickly as possible. Scammers want to get your money before you have time to think or have a professional examine the deal.

Always

• ALWAYS try to make a deal in your local area when you are going to buy an automobile or other high-value products
• ALWAYS trust your instinct if you feel that a deal is too good to be true. Using online sites, people can submit the classifieds and in result, the majority of them have not a future legal transaction
• ALWAYS call the buyer or seller to establish phone contact. If the dealer seems to ignore details agreed to via e-mail or is unable to answer questions about their location or the location of the automobile in question, it is likely to be a scam.

If you feel that someone you know has been a victim of a car-buying fraud, or you need to protect yourself, visit to our www.dealerfraud.org site. Here you will find a lot of information about how to avoid dealer scams, and you can connect with our fraud lawyer.

DealerFraud.org continues to inform you about the some measures you could take to avoid becoming a victim of auto scams. Generally, it is recommended to keep with you a camera, paper and pen. After a car accident has occurred, use your camera to take many photos and write down as much as possible information about every car and/or passenger. There are the facts you should note during an accident:

• License,
• Vehicle registration
• Car insurance details of drivers involved
• Head count of passengers in the car and their contact details.
• Note if they were all wearing seat belts
• Get the contact details of all those who witnessed the accident

All these facts will help you to expose the dishonesty of other parts involved in the accident.

The following list continues to describe the most popular methods that “scammer” use to defraud auto insurance providers and build false states:

• Sideswipe – this scam situation takes place when there are a lot of lanes at an intersection. The “offender or criminal” takes a left while another car comes into the lane they are at. The “perpetrator” rapidly speeds up to force a clash.
• T-bone - this scam situation takes place when there isn’t anyone around and the “scammer” stays at a highway until a car comes along and purposely crash into it as the car passes. Then false witnesses would report to the police that the passing car broke the law by running a red light or stop sign.
• Wave - this scam situation takes place when there is high traffic and a merge and/or “right of way” is talking place. The “scammer” sends a false sign to the victim and offers him right of way. When they start merge, the scammer speeds up to cause an accident When the police arrive, the “perpetrator” reject any claims that they offered the victim the right of way.
• Suspicious Helper - this scam situation takes place after an “honest accident”. What does it mean? A stranger approaches you after an accident and offers numbers to an auto repair shop, lawyer or doctor. Of course, it could be a frame-up: the auto repair shop often pads your repair charge, a doctor may give you shady treatment or none at all, a lawyer may even try to convince you to sue the insurance company.

Most of these frauds are done by professionals, but call the police immediately if you feel the accident is a scam.

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.

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.

Checking the car title history is important since it is the only surefire method to confirm that a car has a clean past. Even if it “passes” the test drive and has no evident damages, the buyer should check the car’s tile history. Here are the key steps:

Know what to pay attention to on the certificate

A car title is an official document of ownership that is issued by the Department of Motor Vehicles. It has a VIN (vehicle identification number) that is unique for each car. You should check to see that this number on the certificate matches with the number on the car (as a rule it is printed on a strip on the car engine compartment, on the door jam on the driver’s side, or on the dashboard.

Make mileage comparisons

The car title history includes information about the mileage on the date of the last sale of the car. Compare this number with that on the car odometer. Make sure that you don’t deal with odometer rollback or odometer tempering scam, which is done for the sole purpose of making the buyer believe that the car has fewer miles on it than it does.

Look for potential hidden damages

If the car has had consistent mechanical trouble, has been damaged from a fire or other natural disaster, or has been reported as stolen or involved in any car fraud, this will be indicated on the car title history. A report of previous emissions testing and title changes will also be available. Don’t ignore the warning signs concerning the condition of the car you want to buy.

Be aware of warning signals

Some fraudulent car dealers may try to hide from the buyer that the car was officially labeled as e.g. “salvage” by ensuring that the car title history has been lost (this significantly decreases the car value). Never get tricked by believing this as you can always request a duplicate copy of the car title history from the Department of Motor Vehicles.

For further questions, contact our dealer fraud attorney.

Online car fraud has become very popular on car auction listings. Much of this online car fraud is from overseas. Don’t rely on the seller’s country of origin or feedback as profiles are bought and sold over the internet. Someone from oversees can easily use a bought or even stolen Ebay profile with great feedback to attract unsuspecting buyers. They copy some photos from the internet and put an unbelievably “great” price on the listing to make a quick dollar on naïve car buyers.

Here are some sign of possible online car fraud.

1) Poor English throughout the listing description.

2) Fraudulent escrow services. (See if there is any contact information available and try to contact them).

3) Emails that don’t go through Yahoo or Ebay Auctions. Many of these fraudulent transactions occur because someone emails a bidder that is not the winning bidder and tells them that is the winning one. Note that all Ebay transactions will have winning bidder notifications through the Ebay email system.

4) Also watch out for fraudulent promises. Car salespeople at car dealerships are notorious for this. Make sure the car has the warranty you desire and do not believe the salesperson until you see everything in writing.

5) Inspections and Emissions. Whether the car can pass inspection in your state or not is rather important since every state has its own inspection and emission requirements. It is possible that a car has somehow passed an inspection in one state but cannot pass it in another.

6) Undisclosed flood and frame damage. Unscrupulous car dealers are selling crashed cars and flood cars without properly listing damages and repairs.

So, to avoid online auto scams be careful and do your homework. For further questions concerning this issue contact our experienced car attorney.

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.

Odometer is an instrument indicating distance traveled by a vehicle, but criminals are using various instruments to roll back the milometer to sell the vehicle at a higher price.

Odometer rollback schemes represent a high profitable car dealer fraud. In addition to an old machine with false mileage you also get a car which will most likely need more maintenance and repair, thus almost guaranteeing you a return to the car repair shop. And of course the result is more money to be paid by you. Only a low percentage of odometer fraud is executed by amateurs, usually this crime is associated with intelligent organizations or individuals who develop complicated schemes very difficult to detect and investigate. Not only the end consumers are affected by this car fraud, but also legitimate re-sellers.

Recently car manufacturers make use of digital mileage meters because they are cheaper to produce than a mechanical dashboard and easier to fit into the car as there is no mechanical speedometer cable.

Another reason for developing digital odometers was to alleviate the problem of odometer tampering. Electrical pulses in the car wiring may cause the dashboard data, which is stored internally on an EEPROM (Electrically Erasable Programmable Read Only Memory), to become corrupted due to a car accident or a simple mistake in electronics. Therefore, of course, also a tool exists to “correct” the mileage numbers who were displayed incorrectly.

Unfortunately just as quickly as the technology was developed, scam artists learned how to use it for the wrong reasons. It is similar to computer hacking, with the right software and hardware you can penetrate right into the system making the desired changes. You can purchase these tools anywhere in a car shop or online. Since digital odometers don’t have any visible moving parts they are even harder to detect than traditional mechanical odometers, so the vehicle’s condition and a detailed history report are the best clues a buyer has for determining whether clocking has occurred. Legally this service is displayed as “mileage correction”.