Dealer Fraud

To avoid becoming a dealer fraud victim and a dealer fraud attorney’s potential client read our blog and watch for these car dealer tricks.

Profiting from Rebates

Rebates attract a lot of customers, but the discounts can hide several car dealer scams that are employed to suck a few bucks from a buyer. First, don’t let a salesman tell you that you are getting a good deal because of a rebate; rebates come from the manufacturer and usually apply regardless of the price you negotiate with the individual dealer. Negotiate as if there are no rebates.

Second, make sure that the rebates are deducted from the purchase price. If you allow the dealer to mail you a check after the sale, you end up paying taxes and interest on the rebate. And never let an incentive like a low APR or a rebate rush you into a purchase you aren’t ready to make. If there’s an incentive on a vehicle today, odds are there will be incentives on it again. Salesmen will often tell you that you have to buy a certain trim, engine, or option package in order to qualify for the incentives. This is not always true.

Eavesdropping

While it’s a good idea to bring a friend or family member shopping with you—someone else to watch the deal, question the terms — this opens additional avenues for nefarious dealers to use the buyer’s impressions  against them. When the salesman leaves the buyers alone, people drop their guard and feel comfortable discussing the aspects of the deal they wouldn’t mention in front of the salesman. With just a couple slight pokes at their phones, salespeople can leave the intercom open with the sales manager’s office, where they will go not to seek approval on your terms, but to eavesdrop on your conversation, harvesting information to use against the customer. There are even stories of salespeople hiding tiny monitors in their offices. So when the salesman leaves to talk to the sales manager, it’s your turn to leave and get a cup of coffee.

Auto dealer scams are a big concern for many potential car buyers who may easily become dealer fraud victims simply because of lack of homework and knowledge in this field.

Altering the Bill of Sale

Never sign a bill of sale with terms that are “subject to bank approval” or have similar wording. Some dealerships convince customers to sign such a document and release new cars to their happy owners, only to call the buyers back a few days later to say that the loan fell through and they need to come back in to sign some new paperwork, which almost always costs buyers more than the negotiated price. Never drive your car off from the dealership until all the paperwork is filled out completely.

Inflating Payments

A salesman will ask you how much you are willing to pay each month, and you will throw out a number—say, $450 a month. He will ask how much more you could afford. You add another 50 bucks. In your mind, you were just theorizing, but to the salesman, you just committed to a $500 minimum monthly payment. Instead, when a salesman will ask how much you can pay each month, tell him you will not discuss monthly payments and only want to talk purchase price; you’ll decide on monthly payments after you’ve settled on a fair price.

Misplacing Trade-In Keys

If you are thinking of trading in your old car when buying a new one, someone may borrow your keys to evaluate your ride. If negotiations come to a stop and you try to leave, you might find that they’ve been “misplaced” in order to prevent you from leaving and entice you to make a deal you aren’t comfortable with. Bring two sets of keys with you and this won’t be a problem.

Watch for these auto dealer tricks else you will most likely need a dealer fraud attorney’s help in the future.

While most people are aware of common car dealer scams, less experienced buyers may fall prey to their tactics. When selling a new or used car, car dealerships profit in two ways. They profit from the sale of the vehicle, and from the interest paid by the buyer. Hence, the goal of most car dealerships is to trick buyers into paying more money for their car.

Dealership Mark-Ups

Car dealerships have a close relationship with certain finance companies. Thus, the car dealerships will likely encourage buyers to use a specific finance company. If possible, secure your own financing with a bank or credit union. Because car dealerships also profit from the interest paid, the in-house finance company may increase the loan rate by a few points. The difference paid is received by the dealership.

Dealership mark-ups may be avoided by simply comparing auto loan lenders. Do not accept the first loan package offered, and never accept dealership financing without shopping around. Request a no-obligation quote from an auto loan broker. This way, you acquire multiple quotes from honest lenders.

Upside Down Auto loans

In an effort to finance everyone, some car dealerships offer crazy loan packages. This might include zero down loans, extended loan terms, etc. While these options sound appealing, and they may help you afford a nicer car, keep in mind that car’s lose their value quickly. Thus, avoid long finance periods. If possible, attempt to have the car paid off within four years. Also, save money for a down payment.

In case you feel you have already fallen a victim to car dealer fraud, contact an experienced car dealer fraud attorney for further help.

Do your homework accurately before entering the car dealership to avoid the potential threat of becoming a car dealer fraud victim. Here are some useful questions to ask a used car dealer:

1.    What is the dealership’s return policy?

High-pressure dealerships will most likely laugh at this question. However, a consumer friendly car dealership will probably give you time to rethink the purchase and at least provide you equal value. No dealership is going to offer you cash back.

2.    What is your cash price for this used car?

Cash is king, even at used car dealerships.

3.    What new equipment comes as part of the purchase?

See if you can get the dealer to throw in e.g. a set of new tires. If the used car’s mileage is approaching 100,000 a timing belt might be a nice touch.

4.    What service has the car dealership performed on the used car since acquiring it?

This helps you to determine what value you’re getting for your purchase.

5.    Do you take trade-ins?

In case the dealership handles this for you it will make your life a lot easier if.

6.    Is a CarFax report provided before purchase?

A reputable dealership will have no problem with this. Make sure the report’s VIN (vehicle identification number) matches the VIN on the used car you’re looking at.

With the help of these questions, hopefully you will not need a dealer fraud attorney’s help in the future.

A salvage vehicle is any motor vehicle which has been wrecked, destroyed or damaged to the extent that it is declared a total loss by the insurance company or, in the event an insurance company is not involved in the settlement of the claim, sustains damage in an amount exceeding 75% of its actual retail cash value. There are some steps you may take to protect yourself from buying salvaged vehicles that have extensive water damage.

Many people may not realize they have bought a flooded car until they take it to an insurance company. They then find out that their agent cannot even issue them an insurance rate quote because of the salvage title on the vehicle. Since used cars are usually sold “as is” there is very little recourse the buyer has at this point other than to try and get the vehicle road-worthy and go through a long inspection process with the state motor vehicle bureau that is required for a vehicle with a salvage title.

One of the easiest ways to protect you from buying such a car is to obtain a vehicle history report from a firm like CARFAX which tracks flooded vehicles and other types of damage. You may also do some detective work yourself on the vehicle if you have any doubts. Look inside the engine compartment and look for any water mark signs that might indicate high water levels. Next, look under carpeting to see if there is mold or any presence of water staining. Finally, inspect the electrical system thoroughly. This is where most water problems show up first.

So to protect yourself from purchasing a flooded vehicle you should be a diligent consumer. If case you have already been defrauded by car dealers, try to find an experienced dealer fraud attorney for help and advice.

Car dealer scams vary and being aware of them becomes more and more important. Awareness may save you a lot of trouble and money. So make sure that you have done your homework accurately enough and are ready to enter the car dealership without the potential threat of becoming a car dealer fraud victim. Below are some useful questions to ask a used car dealer:

• If the car is certified, can you show me the mechanic’s pre-certification inspection?

Every certified car has to go through a car inspection before it can be certified. Ask to see that paperwork to find out what was fixed. It’s a good piece of paper that will support your future problems.

• Who was the vehicle purchased from?

If it was a trade-in to that dealership, ask the dealer to show you the maintenance records. Tell them they can black out the owner’s name and address. If it was bought at auction, make sure it is gone over with a fine-tooth comb by a mechanic who specializes in inspecting used cars.

• Who certified a used car that is called certified?

The only certification that really means anything is a manufacturer certified pre-owned car. All others are insurance backed programs.

• How long of a test drive may I take?

See if the dealer will allow you to take the car overnight for an extended test drive. Put it in writing that you won’t put more than 100 miles on the odometer, prove you have insurance, and you’ll bring it back with a full tank (if you leave with a full tank).

Ask these questions to the car dealer and hopefully you will not need a dealer fraud attorney’s help in the future.

If you believe that you may be an auto dealer fraud victim, there are a number of steps you can take to enforce your legal rights. You have the following options:

Contacting the Dealer. In many states, if you believe that car dealer fraud was committed, you are required to contact the dealer and give them a chance to correct the problem before taking any legal action (such as filing a lawsuit). This contact may be initiated by you personally, or it may be made by your attorney, but it should be in writing and should clearly illustrate both the problem (i.e. the dealer’s failure of disclosing certain financing charges), and what steps you would like the dealer to take to resolve the problem (i.e. a partial refund of the vehicle purchase price).

Filing a State Agency Complaint. If you believe that you may have been an auto dealer fraud victim, you may want to file a complaint with a state agency that protects consumers’ rights in connection with vehicle purchases. It may be a consumer rights protection division of the state attorney general’s office or an agency specifically designated to handle complaints regarding auto dealers.

Getting an Attorney’s Help. If you recently bought a vehicle and you suspect that the dealer may have committed fraud during the sales process, you may want to speak with an experienced auto dealer fraud attorney. An auto dealer fraud attorney will evaluate your case and explain all your options - including what you can expect if you decide to file a lawsuit against an auto dealer - and will work with you to ensure the best possible outcome for your case.

A lot of people fall victim to car dealer fraud every day. If you are thinking of getting a new vehicle, it would be best to know these dealer tricks and steer clear of them. Here are some things you should be aware of:

Loan Assistance: If your dealer makes an offer to assist you if you are unable to pay off your loan, think twice before agreeing. You might end up with a bad credit rating and will start owing the dealer rather than your bank for a higher price.

Easier Payments: There is a real difference in paying the car for a lesser amount and paying less for a car loan. Some dealers try to get to pay higher payments from you by saying they are trying to make the car more affordable. If you add up all the payments, then you will realize that in fact you have paid for a higher-priced car.

Added Security: It is a common practice for some car dealers to suggest an etching on the car’s windshield to prevent theft. Your property will be protected and it’s not a bad thing. However, don’t pay for a premium when a VIN etching kit can be purchased online for only $30 or less.

Extended Warranty: There is no other person who may decide whether or not a warranty will be added an extra year except you. No dealer maneuvering should be making that decision.

Dealer Preps: Never pay more than what is listed on the car site or the sticker price. Some dealers often add dealer prep costs when the price is already in plain sight.

In the end, study all your options to be an informed customer before shaking the hand of your car salesman. However, if you have already been defrauded, try to contact an experienced dealer fraud attorney.

There are some common traps that you may fall into when buying a new or used car. To avoid these car dealer scams, please read our blog to learn some useful car buying tips.

How Much Do You Want Your Monthly Payments to Be?

In many cases the persuasive salesman will try to sell you a car that costs more than you want to pay but he’ll wrap it up in a deal with monthly payments that you think you can afford. Before you tell him what you’re willing to pay each month, you should find out what the car is going to cost.

We’ve Got Some Extras For You

Some extras may be worth tacking on to your auto loan, like automatic transmission instead of manual, or safety features that will help lower your insurance premium. But before you just sign up for an extended car warranty or other extras that you might not need or you could get for less somewhere else.

Who Has Time for Comparison Shopping?

One of the most common mistakes you can make is not doing your comparison shopping before you decide. It’s a well-known fact that car prices vary greatly, even on the exact same car, meaning you may find a better rate just down the road. Do your research, comparison shop and check the Web for going rates in your area to be sure you have a good idea of what you should be paying.

But It Looks So Great!

Too many people rely on curb appeal more than the important factors about the car. Remember that safety, longevity, quality and resale price are all very important.

However if you have already become a dealer fraud victim, your wisest option is contacting a dealer fraud attorney for valuable advice and help.

You purchase a new vehicle from a car dealer and arrange a finance package with a low APR. You drive away with your vehicle and a few weeks later you receive a call from the dealership that explains that they have received word from the finance company and they have declined the low APR you requested which was subject to finance or loan approval in your contract. The truth is that when you supply your financial information to the dealer he/she is able to determine exactly what APR you are eligible for depending on your income, so if you don’t misrepresent your income they should know immediately what your credit score is and what you are able to receive.

To avoid this auto scam find out what your credit score is and what APR you are eligible for to know if you are being told the truth from the start. Leave a deposit and don’t accept delivery of the car until the loan has been approved in written form; this should only take a few days. Don’t take the car that day even if they say it’s ok.

The other option is much safer - don’t finance your car at a dealership especially if you have bad credit. With a well known financial company you will be able to avoid payment scams as well.

If you have already been scammed, there are still a few things that you can do. First of all see if you can get finance from an alternate source, such as an online finance company. You may also try to talk to the dealer and get out of the deal. If all else fails try turning to an experienced dealer fraud attorney for valuable advice and help.