Dealer Fraud

Used-car buying is a great business wrought with scams. Used-car sellers need to be informed of possible car scams. Here are some of the most common ones:
•    Certified Check Scams - This scam is often done on sellers of used cars over the Internet. A buyer informs that he/she wants to buy the car and pay with a cashier’s check. When it comes to the last minute, the buyer brings some reasons that he/she needs to write the check for more money and have the seller wire him/her the difference. Then the check appears a fake one, and this fact can be discovered long after the seller has wired the money. Furthermore, the seller is responsible for covering the money for the fake check. In order to avoid check scams you can call the issuing bank before you accept the check and wait for the check to clear before you transfer the car into the buyer’s name.
•    Bogus Escrow Services - Online car sellers regularly use escrow services to collect and verify payment from a buyer. The money is held by the service until all parties are pleased with the sale. Assure you check out an escrow service, as there have been some cases of  escrow fraud.
•    False Auctions - According to the Federal Trade Commission, the most common frequently Internet fraud occurs on auction sites. Research the buying history in details and never ship the vehicle before the money has been received.
One of the best ways to avoid most auto scams is not to transfer ownership of your car until you have the cash in your hand. You either get cash from the buyer or wait for the cashier’s check to clear. Never take personal checks and allow buyers to pay the car off over time. To avoid car scams follow these few precautions and your car-selling experience will go smoothly.

You can also get a consultation from a Car Dealer Fraud Attorney.

Car dealers do not sit on their hands, they constantly think of new methods to take advantage of car buyers. Here are the most recent car dealer tricks.

• Spot Delivery: When you choose the car you like, fill out all the paperwork, the car dealer tells you that although your loan hasn’t been “officially” approved yet, you can drive the car home anyway.

Don’t agree!

If you do, the car dealership will call you and say that your loan wasn’t approved at the interest rate you discussed. However, you were approved at a higher rate.

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

The most awful part is that you probably are stuck, as 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.

•    Mandatory Arbitration or Conflict Resolution: This trick sounds reasonable at first, but be very careful.
Once all has been agreed to, the sales person asks you to sign a “Dispute Resolution” or “Conflict Resolution” agreement. The sales person tells you it just says that if a problem occurs, you agree to settle through arbitration and not take the car dealer to court.

Though arbitration can surely be a sensible option, the fine print is where the problems lie.
So, ascertain the arbitration agreements before you sign them to make sure they are fair, and show them to your attorney.

Anyhow, ask the auto dealer whether or not they require an arbitration agreement before you look at any cars.
Many auto dealerships need these agreements because they would get sued frequently without them.

If you feel that you are a victim of car dealer tricks, contact a reputable car dealer fraud attorney for help and advice.

When dealing with dealers, it is not easy to recall every fact you have examined, but try to keep these  key points in the back of your mind:

•    Dealers have revenue commonly between 10 percent and 20 percent. Typically, this is the difference between the sticker price (the price they want you to pay) and the invoice price (the price they paid for the car).
•    If you do not see exactly what you want on a new car, consider ordering it. This may take time, but at least you’ll be paying for what you want and not paying for extras the salesperson talked you into.
•    If you are sure of what you want and don’t budge, a dealer may suggest letting a car go cheaper if it is “approximately” what you want. Keep in mind also an alternative variant, and when the offer comes you’ll know whether to say yes or no and won’t be confused. This an opportunity to pay less and get something very close to what you wanted.

•    Do not be too embarrassed to walk out. Many dealer tricks are organized to keep you in the showroom.

•    Think over beginning the process by phone — getting some competitive prices is your first step, but there’s no need to be involved in salesman just for that. Don’t accept a refusal to talk over the phone.

•    Get all the dealers you talk with to use the same figure. Use the factory invoice price as a basis. Then each dealer must give you a number you can compare to other dealer prices.

•    At times dealers get extra factory incentives and may be able to sell below factory invoice price.

•    Negotiate for a price, not a monthly payment. First price, then payments.

•    Do not pay for things you don’t have to pay for. Be ready to pay extra for licenses, taxes, registration, and destinations charges, but never for things you do not have to pay for. Be ready to reject fancy extras, they are expensive and you don’t need them.

For further help and information on car scams, try to contact an experienced dealer fraud attorney.

Car scams do “chase” car buyers. Every year the number of car dealer fraud victims increases rapidly. The main concern is that newer and newer car selling scams are designed every day which are mainly based on older “classic “scams. Here are some of the most common auto dealer scams.

• It is a common scam when a dealer claims that you are not eligible for competitive financing rate with your credit score. This is only true if you miss your payments or pay them with delay. Some dealers may try to convince you that the only option you have is to accept the financing and terms suggested by them.

To avoid this auto dealer scam, keep a good track of your payments. Try calling the credit bureaus for your credit report.

• A car dealer may also misrepresent the real price of the car. Try to find out beforehand what is the real price of the car before entering the negotiations phase.

• Another car dealer scam is designed by providing a low payment per month. Naïve car buyers may fall for this, but informed ones know that this means that either the down payment is a huge amount of money or the term is for the first few months only.

To skip this scene calculate how much you want to pay per month and present your own terms to the dealer.

• The dealers may convince you to buy luxurious cars even before you are over with paying loans for your current car. They might insist that the remaining payments of your current car will add to the new one.  Think twice before agreeing since the consequence may be that you will have to pay even more than the current payments you are making.

This is not the full list of scams; there are other car dealer tricks as well and unfortunately listing all of them is nearly impossible. The only surefire advice is staying alert all the time and reading all the paperwork.

If you have any further concerns on this topic, feel free to contact dealer fraud attorney Hovanes Margarian.

Buying a car with bad credit may be a great opportunity for car dealers to make a big profit on the buyer. Mostly car dealer loans have unfavorable terms. But the real problem is that some car dealers will try to run their auto scams on you. Here are the top car scams that you should remember and avoid. Most often they employ the bouncing check scam.

This is a scam applied to those car buyers who managed to get financing, but are tricked by car dealers and are told that the check bounced and thus they failed to get financing. Then the dealer will offer the buyer financing himself/herself. He/she will convince you that their deal is beneficial for you and that you can get the car immediately and so on.

Don’t accept a finance contract until you have checked what the going interest rate is for your credit category. Dealers will usually throw out an extremely high interest rate number and insist that it is the best possible variant for you.

The truth is that they are adding some additional interest onto the loan and pocketing the difference. The more desperate the buyer is, the higher interest number they’re likely to quote.

Do not be cheated by the dealers’ sweet talks since they dealer will offer you loan at higher annual interest rate. Moreover, some dealers will call you later to say that actually you do not qualify for the credit and will try to increase the rates even more.

To be a knowledgeable car buyer one needs to invest the necessary time and money on what is called homework or prep stage i.e. studying car sale information, researching and consulting with trusted friends or experts regarding the authenticity and details of the car. After the homework is done properly, the rest is a simple buying transaction. The more prepared a buyer, the smoother the transaction!

There are three main points for preventing car scams:

1.    Know What You Want to Purchase
2.   Research Your Vehicle
3. Ask questions

This blog will cover the third point from start to finish. Before you physically look at the car, contact the seller and ask the questions that you are interested in. Here are a number of key questions classified by categories to ask the seller even if the details are not mentioned in the ad.

Drive Train, Engine, Options

• Drive train specs (hp, rear axle ratio, engine size, transmission type)
• Options - A/C PS, PB, trim packages, Vinyl roof
• How does the car run?

Body and Interior

• Interior color and condition
• Body panels original, frame damage, any accidents, paint and body panel condition?
• Currently inspected and roadworthy or project restoration car?
• Mileage or other known mechanical problems?

Title and Price

• Does the car have a “clean” car title?
• What is the asking price?

How does it look?

• Can you get detailed digital pictures?
• Send to experts or post on a forum for opinions.

Logistics

• Will they allow you to bring in an expert, or independent third party to inspect and verify the car?
• Is there a place locally where you could arrange to put the car up on a lift and do a visual and physical inspection?

Asking questions and making sure you get detailed answers to them is the best way to avoid auto scams. For consultation and help on dealer fraud and car scams cases, please contact our car attorney.

The purchase of a new car is considered to be the second largest purchase that most Americans make. Of course, buying a new car can be exciting, but at the same time it can also be very stressful and confusing, taking into consideration all the dealer tricks and car scams that are present in the auto market.

Using just a few tips brought in this article you can easily buy a car and avoid becoming a victim of dealer fraud.

One of the most important questions a car buyer has is how to spot dealer scams, when buying a new or a used car. And this is pretty reasonable, as today there are more and more warnings about all of the different scams that dealers use to earn more money and to cheat consumers. However, there is always something that you can defend yourself against by taking some good advice and following several simple tips.

First of all, when you are shopping for a new car keep in mind that you should determine what car you want and how much monthly payment you can afford. However, be careful and pay attention to all the details, read each word in your agreement to make sure that everything written is exactly what you have negotiated and there is nothing confusing. Especially pay attention and make sure that you are not overpaying for your new car by extending out the term of the loan.

In other words, make a decision and stick to it. Don’t let the dealer trick you into any aspect of the deal that is not right.

If you have bad credit and want to buy a new car, you don’t have a lot of financing options. Therefore, you are likely to look for a car dealer who can provide the money required for the new car and encounter bad credit score scam.

Car dealer loans are not that bad, however they are more likely to have unfavorable terms.  Below are the two most common car scams that you should always keep in mind.

• The Bouncing Check Scam

Car dealers apply this scam to car buyers who managed to get the money for the purchase and will not ask the dealer for financing. The dealer will say that the check bounced and will offer you financing. Of course he will try to convince you that their deal is great and you can get the car immediately and so on. Do not be cheated by these sweet talks.

The dealer will offer you loan at higher interest rate. Moreover, some dealers will ring you up later to say that actually you do not qualify for the credit and will try to increase the rates even more.

• Previously Wrecked Car Sold “As Is”

Some car dealers really don’t know that the car is a wreck, yet others know and skillfully try to cheat you. The real issue with buying a wrecked car is that you will be asked to sign papers that will state the car condition and that you agree to buy it “As Is”. In this case you have no warranty. If something happens to the car, the dealer will simply step back and there is practically nothing you can do.

The best thing to do to avoid this dealer scam is running a Carfax report that will show everything about the car. Also get a mechanic to inspect the car.

Many of you have probably received postcards in the mail or phone calls urging them to buy auto warranties, but many of these unscrupulous companies simply take money from consumers and leave them with little help when repairs are needed. Read our blog to avoid these car scams.

1.   Step 1
Avoid companies with little history in the auto business. If the company goes out of business, you will have to pay for your own car repairs.

2.  Step 2
Stay away from any dealership that claims that you must buy a warranty in order for your financing to be approved. This is a common  car scam.

3.    Step 3
Say “no” whenever your car salesman tries to pressure you into buying an extended warranty or tells you that you will not be able to buy an extended warranty later.

4.    Step 4
Avoid scams by keeping your personal information private. Don’t give out bank-account details or Social Security numbers over the phone. Never give credit-card numbers to warranty companies unless you’ve contacted the company and are positive of whom you are speaking to.

5.    Step 5
Never make a down payment before you see the full written warranty and its terms.

6.    Step 6
Be particularly wary if you are a senior citizen. Some companies target seniors with scams involving high-pressure sales calls and mailings.

7.    Step 7
File a report with the Federal Trade Commission or the Better Business Bureau if you feel you have been ripped off or targeted by a scam. Also, you should report the scam to the United States Postal Service if it involved mail.

There are a lot of car dealers out there who try to use trade-in scams to make much profit. Being aware of the commonly used car scams is the best way to protect you from becoming a victim.

Some dealers will scam you by telling that they will pay off your current lease or loan, no matter how much you owe. Remember that a lease or a loan is a financial contract, and you are not able to eliminate one when buying a new car. Through this trade-in scam the dealer will most likely try to make you pay higher monthly payments on your new car. Avoid this scam by simply waiting until your current lease is expired or paid off.

Beware of car dealers who forget to pay off your trade-in after the deal is complete. A lot of car buyers receive notices for a collection agency a few months after they trade-in their car and are surprised to learn that the dealer never made any payments. You can avoid this trade-in scam if you get all pay-off documentation in writing.

Always have your trade-in inspected by a mechanic in order to avoid car dealers who report “all sorts of problems” with the vehicle.

Never sign any documents if you feel that the dealer is trying to trick you. Simply walk away, and find a reputable dealer who will offer a good deal.