Dealer Fraud

Before entering a car dealership, you should be well-informed and prepared to avoid becoming a dealer fraud victim. The most important way you may prepare yourself is by researching the types of cars and deals that are out there. Most car companies have websites which enable you to learn about the different models, options and prices of most, if not all, of the automobiles available. You can even build the car that you are interested in, including options and packages, and then see what the car company will quote as the price. With this information you can go back to the car dealers and show them that price quote.

In addition, some of these auto company websites allow you to contact the local car dealership directly. This is a great way to deal with things, because then you can send in exactly what you are willing to pay, or what the car company quoted the price to be, without actually having to sit down at the car dealership and run the risk of being defrauded by a high-pressure sales situation. You may also send the price quote that you have to other dealerships by email, which will encourage the different car dealers to compete for your business. This may help in lowering the price you have to pay for your car, because one auto dealer may offer you a better deal than another.

If you do decide to go down to the car dealership to bargain personally, doing some research on values, car prices, deals, incentives and rebates may really pay off. While it is impossible to avoid working with car dealers at all, having the know-how about pricing and car financing scams may really help in smoothing out the bargaining process.

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.

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.

To avoid becoming a car dealer fraud victim, one should beware of all kinds of auto financing scams. Below are some of the most common auto financing scams that are utilized by some fraudulent car dealers.

Market adjustment fee

The dealer will try to convince you that the vehicle you want is selling like hot cakes and is very popular. In order to sell you the vehicle, they will do some “market adjustments” amounting to a few thousand dollars. Even if the car you want is very popular and is very much in demand, if it is in stock you should not be tempted because getting a “popular” car is not worth it if you have to pay a few thousand dollars more. You should never pay more than the MSRP (manufacturer’s suggested retail price).

Yoyo scam

You will be allowed by the dealer to take the car home as soon as possible. The dealer will take care of the financing, a few days later he will contact you again and tell you that there was a problem with your financing plan. He will tell you to set up a new financing scheme which, of course, will be at a higher cost.

Be wary of this car dealer trick and avoid it at all costs if you detect it. If you have a bad credit standing, don’t have your financing done by the car dealer and make arrangements for your own financing. Never take the car home immediately. Wait for at least 24 hours to make sure that the processing of your financing scheme has already been completed. By allowing one whole day to pass by, you are assured that the dealer cannot use this scam on you.

Buying a new car is like buying anything else on the market, only a little more stressful.  Stressful because car dealers are trained not to take “no” for an answer, and many word games and phrases come into play to help them to get you to close the deal.

So you can be easily led to think that you are getting a good deal, when in fact you could be getting a bad deal.  This is their job; they improve their craft all day from 9:00 to 5:00.

The new car sale price trick isn’t usually included in the list of the ‘official’ car dealer scams, but it’s worth discussing.

Surely you’ve noticed how retail stores will offer a 50% off deal on a piece of merchandise, but in truth the price of the item has been increased in the first place.  This same marketing strategy applies to selling cars. If a company marks up the price by 55%, and sells it for 50% off of that price, you are actually paying 5% more for the item than it originally costs.

This is a very common way for car dealerships to work.

They may offer a $4000 cash back deal on your trade-in while the other fees and interest rates will be higher than normal. But they’re hoping that this $4000 cash back offer will temporarily blind you long enough for you to sign the papers.  So while a car dealership may make the numbers sound great, they will try to get you with the other fees.  Let them “try” whatever they want; your job is to not be fooled by their tricks and eventually not to become a car dealer fraud victim.

Generally customers need some knowledge to avoid becoming a dealer fraud victim. They need to know how to act and what to ask dealers when entering the car dealership. Here are some tips that will be rather helpful when dealing with car dealers to prevent odometer fraud.

1.    Inspect the vehicle carefully to make sure that its actual condition matches the mileage that is indicated in the odometer.

2.    If you think the vehicle you are going to buy has been repainted, search for the parts that have been replaced. Paint is sometimes used to cover the older parts, thus giving the vehicle a newer look.

3.    Look in the left door frame, as well as inside left front window, under the hood, in the glove compartment or in the trunk for maintenance and oil change/lube stickers that might contain accurate mileage information.

4.    If you consider buying a vehicle advertised or represented as part of a fleet than you should be twice careful. Be wary of these vehicles especially if the odometer shows low mileage.

5.    The numbers on the odometer gauge should be aligned properly. Misaligned or crooked numbers might be a sign of odometer tampering.

6.    Ask the car dealer to provide you with a written statement of the actual mileage disclosed on the odometer at the time of purchase. If they refuse to provide that document, you may already have a claim under the Truth in Mileage Act.

Purchasing a pre-owned vehicle may be a difficult task, especially if you do not know which used cars to avoid. There are certain steps that consumers should know to avoid becoming a car dealer fraud victim.

Step 1

Check Consumer Reports before purchasing any vehicle. Consumer Reports contains valuable information on the reliability of new and used cars. They contain evaluations from both the car experts and everyday drivers. Search by the vehicles’ year, make and model. Read each evaluation carefully and check the used car’s overall rating.

Step 2

Go to a private party or dealership and test drive the vehicle. If you are not sure what to look for, have someone come with you who has a good idea of the vehicles components. Check the basic functions of the car to make sure they are in working order. If you do not have anyone to take with you for a test drive, bring the vehicle to a reputable mechanic.

Step 3

Request a vehicle history report. This step is crucial to ensuring that you are not driving a lemon! A vehicle history report will provide you with details on any accident, fire and flood damage that the vehicle may have incurred in the past. It will also tell you whether or not the vehicle has a salvage title.

Step 4

Walk away from any private party or dealership that will not allow their vehicle be viewed by a mechanic or does not provide you with an accurate details of a vehicles history.

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.

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.