Dealer Fraud

This is a very common car dealer scam designed to rip off people with bad credit. It is also referred to as the Spot Delivery scam.

While you are at the car dealership you may be told that you have excellent credit and got a good APR on the loan. Then they hand you the keys to your new car, tell you the sale is subject to loan approval and so you drive happily off.

A few weeks later you get an unexpected phone call from the car dealership letting you know that the loan fell through because you didn’t qualify for the interest rate that you thought was guaranteed. So they ask you to come back to the auto dealership to work it out. If you fall for this car scam be prepared to pay a much higher interest rate.

The dealership knows exactly what interest rate you qualify for and how large a loan you can get. They knew you had bad credit long before you drove off. They knew that even though you could get a loan the APR would be high. The result: you would either purchase a less expensive car or decide not to get a car at all. You want the car badly… if the price is right. The salesman is well aware of this. He or she also knows your credit score and wants to make the sale any way they can.

If you believe that you’ve been a victim of a Yo-Yo financing scam you should immediately report the car dealership to your state’s Attorney General Office. You should also contact the Better Business Bureau in order to report a dishonest dealership. You can also try to find better financing with a better interest rate as fast as you can.

As the price of new vehicles increases, there is more and more interest in used cars and subsequently odometer tampering has become a very lucrative fraud. Here are the varieties of odometer fraud.

• False or Altered Titles – A clear title is much more valuable than a wrecked or damaged car title. This car scam occurs when a dealer purchases a high mileage vehicle and subsequently resells it with falsified, reduced odometer reading. This is accomplished simply by tampering the high-mileage figure noted or by obtaining a new automobile title with a false mileage figure before reselling the vehicle. A professional calligrapher can perform excellent quality title alterations, which are often invisible to the naked eye.

• Reassigned Titles – In most countries licensed automobile dealers are allowed to transfer vehicle titles without re-registering them. How? A car dealer’s reassignment of the title can be attached to the original title. Numerous title reassignments can accompany an original title, as well as the washed title. A car dealer may also discard the prior reassignments of title, making it difficult to trace ownership of the vehicle.

• Title Laundering – This car scam occurs when a wrecked car’s title is replaced by papers bought in another country. A car dealer discards the previous title, then registers his/her vehicle in another state with the altered odometer and assigns the title to a company, then reassigns it back to himself/herself, now having his/her car registered with the new mileage.

• Odometer Clockers – A dealer does minor labor to the car, replacing or changing the noticeable dings and dongs. Mats, gas, floor, brake pedals, tires can be replaced. A clocker turns back the odometer with common tools such as picks, wires, screwdrivers, electronic and digital tools. Cars odometers can be rolled back in masses, because a good clocker can do this job in a matter of minutes.

The fake dealer scam is one of the numerous scams you may become victim of when purchasing a vehicle. Here is how this scam is designed. You are conducting an online search for a used car and come across a car for sale at a very good price, you contact the seller and they tell you the car is a fair distance away but they will pay for the cost to ship it to you, they ask you to pay via a wire service they use many times and you never see the money dealer or the cars for sale again.

The scam is clever here as the money wire website they have you use looks just like one you would expect to see, sometimes they look better than the real money wire websites they use the popular brand names on their site to make it look official and make a minor change to the web address which normally goes unnoticed. The money is wired and immediately picked up never to be seen again. The car photos and details are normally copied from local dealers’ websites and the car scam artist poses as one of the dealers.

To avoid this scam first of all you should be well informed and attentive. The first warning signal of this scam is the dealers’ offer to ship the car for free, not only they sell the car cheaper than its normal price but also they are willing to foot the bill for shipping. Never trust someone else’s recommendation and never use a money wire service for online payments as they are just not secure enough.

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.

Getting a good deal will depend on how well you negotiate. Here are a few insights into negotiating with car dealers and avoiding various car scams designed by them.

Never agree to the first proposal. When you’re looking to buy a car, the first offer is always made by the dealer. The car might have a sticker price, and this is used as a starting point for negotiation. The dealer might factor in other things in the computation, such as registration, accessories, taxes, and the like. The first reaction you should have, as a buyer, is that of shock and outrage.  If this first offer is too expensive for you, simply say “I want something that is sensible, and within budget”. This would prompt the dealer to try to shave off a few dollars, or even offer discounts to meet your needs.

Ask the wife (or the husband). When going through final negotiations, a car dealer’s agent will usually get his manager or supervisor to approve the price, if it’s negotiated down from the SRP. You can also use a similar tactic by turning to someone else to make a final decision. You can tell a dealer, for example, that you are interested in the offer, but that your wife will not allow you to buy the car at such a high price. This will also prompt the dealer to further lower the offer, given the need to please not only one decision maker, but two.

Don’t offer to split the difference. When you have an offer, and the dealer has an asking price, don’t offer to meet halfway. This would only mean you agree with the higher price asked, and that the dealer would have won the negotiation. Instead, wait for the dealer to offer to meet halfway. Then you can make a counter-offer and meet halfway from your preferred price point to his halfway-offer. You end up with a lower price.

Think and rethink. Dealers often take advantage of your presence, knowing that they must make a sale while you are there. Otherwise, once you leave, your interest in purchasing a car will likely be reduced. So the dealer might describe the offer as limited to today only, or that you will get certain freebies and discounts if you buy now. But big decisions like a car purchase should be well thought out, and are best made after a good night’s sleep. Seeing you back at the auto showroom the next day, the dealer will most likely give you an even lower offer than the first time.

Negotiating with car dealers can be tricky, as you may become a victim of car dealer’s fraudulent practices. If you know how to get around the smooth talk, then you can end up getting a good deal yourself.

Scam #1: “We promise to pay off your old trade-in.”

How the car scam works: Due to passive car sales some dealerships are shutting down and not paying the loans off on customer’s trade-in. This leaves you responsible for paying off two vehicles.

How to avoid the scam: Make sure you fax all the dealership’s paperwork showing that they are paying off the loan to your previous loan company. No guarantees but this should get you off the hook in case the dealership chooses not to pay. Better idea, payoff your old loan or sell the car to someone else. That way you’ll avoid this mess.

Scam #2: “We’ll pay off your loan or lease no matter how much you still owe!”

How the car scam works: They do get you out of your loan, but those penalties must be paid to the bank to end the contract. The dealer will not do any favors, he/she just wants your trade-in so they may give you less than what it’s worth, while selling you a new car at a high profit. Then they resell your trade-in for a high price, while you are stuck paying off 2 cars. With this scam, the dealer pays off your loan, and then you owe that dealer for your trade-in car loan. Your payments are spread out over sixty or seventy-two months so you don’t notice what just happened. The more months are added to the loan, the lower the payments. In fact, it’s likely that the payments could be less than your current loan, so you think you’re saving money when you really got swindled. This gets many people deeper into financial trouble.

How to avoid the scam: If you are in a loan now, it’s best to stay in it until the end. If you are upside down on a loan, you need to wait until the car is worth more than what you still owe on it. If you really need to get out of your loan, think about finding someone to take over the loan. If someone takes over the loan their name is now on the contract and you are completely off the hook.

Every minute nearly 2 vehicles are  stolen in the United States! Statistics reveal that VIN window etching can be the most effective anti-theft device for your car. VIN window etching is offered to customers at cost by the majority of car insurance companies because it has proven to be an effective auto theft deterrent. The VIN number is etched into secret locations on the windows of the vehicle. This is done so that if the car is stolen and the VIN number plate is removed, the VIN number can still be identified by going to that secret location on the window. Read on to find out how this extremely effective method of car theft protection can be a car scam.

The way to avoid VIN etching car scam is easy and it involves having all the glass in your car etched with your cars Vehicle Identification Number (also known as your VIN). Thieves will pass up a car with VIN etched glass. Why? Because it seriously diminishes the value of your car as it can cost your car’s potential thief as much as $2000 or more to replace your cars glass. So even the most idiotic car thief will just move on to the next car to steal instead of yours.

So how does VIN window etching turn a car scam? Well, that happens because of dishonest car dealers trying to make as much money as possible.

Car dealers will charge you from $150 to $500 to VIN etch your car’s glass! They love to add this to your car as an “option” figuring that you won’t know any better and you will just bend over and pay for it. Most do, but now you know better! If it’s already on your cars glass, then just refuse to pay their exorbitant charge for it. By the way, you may be able to reduce your car insurance bill from 3% to as much as 15% when you avoid VIN etching car scam.

To avoid VIN etching car scam, just do it yourself: it will only cost you about $20 and a little of your time with the right VIN etching kit.

Dishonest car dealers might fiddle with your financing as a way to jack up their profits. The most popular way of this car scam involves calling back car buyers into the dealership a week or so after purchasing a car. Once you’re back, the car dealer tries to renegotiate the interest rate based on whether you buy extra services, accessories or warranties. They might also try to focus on the amount of the monthly payment to divert attention from the fact that the total amount being financed has gone up. Another variation of this scam involves dealers letting you drive off the lot without finalizing the loan papers, promising that they’ll work it out. But when they call after several days, the terms of the loan have changed or the monthly payments are more than the buyer can afford, which opens the door for the dealer to “refinance” the vehicle and increase his/her profits.

Warning Signs

Dealers who offer to let you take a car home but don’t finalize the loan terms might not have your best interests at heart, especially if you have already agreed to leave your trade-in with them. If you get a call about a problem with a loan several days after signing an agreement, be suspicious. Also, a dealer shouldn’t lower or increase the loan interest rate based on whether you’ll buy extra warranties or dealer services.

How to Protect Yourself?

Before going to a dealership, line up your own financing. Compare the interest rate of the loan you already have with what the dealer offers and go with whichever one is better. When negotiating with car dealers, it is recommended to focus on the total cost of the car, not the monthly payment. Dealers may sometimes monkey around with the total amount being financed if you’re too focused on the monthly payment.

If you are already involved in such a car scam, try to find an experineced dealer fraud attorney to asset your rights.

When buying a new car, people most frequently turn to car dealers as to the most knowledgeable and trustworthy people to buy a car from. However this is not always the case. Some car dealers are simply dishonest and use really mean scams for tricking you. So one should be extremely cautious to avoid becoming a dealer fraud victim. Today we will discuss the The Payoff  Your Loan Scam and try to reveal the related  dealer tricks.

This is when the dealer offers to pay off the balance of your current car loan no matter how much money you still owe. It is a common sales strategy. When the average buyer hears this, they think that by purchasing a new car with a new dealership, they will automatically owe no more money on their current car. That couldn’t be further from the truth. What really happens is that the car dealership does help you get out of your current contract, however they are normally forgetting to tell you how high your fees are going to be for breaking the lease agreement with your old dealership. So now you will have to pay fees that are in the thousands to compensate for it. You will also not be able to refinance for a new car until those fees are paid. Of course the dealership can add the cost on to your contract with them at a substantially higher rate. The sole reason why the dealership agrees to this deal is because they want to get more money off of your current car. They aren’t really doing anything for you at all. The dealership will also give you far less than the car is worth on the trade in. This car scam works because they will up your monthly fees, and then sell your trade in for more money than it’s worth. The dealership will then extend your monthly payments in order to conceal extra year of payments.

To avoid this car dealer scam, you have to ride out your current lease until the end. If you are really determined to get a new car, then you should try selling your current car on your own. Possibly make a deal so that the buyer pays much down and takes over the lease payments. Make sure you get legal documents so you don’t end up with bad credit from someone who decides not to pay. Also make sure the buyer carries enough car insurance.

Yo-yo financing fraud is one of the most common practices of car dealerships. It is also known as the spot delivery fraud. This car scam happens to consumers with below average credit score, when the car dealer convinces the consumer to drive off in cars without finalizing their loans.

Typically, the finance manager at the dealership will tell you you’re told that your credit score is excellent and that you got a good APR on the loan. They will give the customer some paperwork to sign, give the keys to the vehicle and tell you that the sale is final pending loan approval. The consumer takes the car and leaves. However, a few days later the representative of the dealership calls you and informs that loan fell through because you did not qualify for the interest rate. The car buyer is asked to come back to the dealership and sign a new loan, most likely with a higher interest rate.

What car buyers don’t know is that the dealership knows the interest rate that you qualify for and is well aware that you don’t qualify for the deal you have signed. Car dealers know that even if you qualify your interest rate would be high.

If you have below average credit and want to buy a vehicle then you a potential target for yo-yo financing fraud, so be careful.