Dealer Fraud

The only way to buy a used car cheap is to find out what the used cars value is first.

You won’t know if that used car you’re interested in buying is a good deal unless you know the price range that it should fall in.

If you attempt to buy a car without doing some research first it will result in you wasting your time and spending a lot more money, plus you could end up with a car that turns out to be a total piece of junk.

When you want to buy a used car you will see that some dealers might list an unrealistically high price.

It can just as easily go the other way too because some prices will be unusually low.

Obviously those are the ones you want to be on the lookout for, but the only way to know that the car you’re interested in is a good deal is to look at ads for lots of cars just like it.

So take all these prices into consideration knowing that some prices can throw off the whole average.

If you see the model you like, but its not the color you want, then you still need to pay attention to what the car is selling for. Quickly take notes on the year, model, mileage, equipment and prices.

Prices will vary by location too. Its important to spend some time looking at lots of ads before you buy a used car and from the area you live.

If you want to buy a used car that is rare, then widen your search to include the year before and after the car you’re interested in. Just make a note of that and take that into consideration when you’re figuring the used cars value.

After doing this you will start to get a really good feel for what price range this type of car should fall into. Then when you find a car you like, you’ll know right away whether its a good deal or not and that is the only way to buy a used car cheap!

It is true that lease payments are lower than loan payments for the same car, which allows dealers to suggest that leasing is a better deal, especially when they are working with a “payments” customer. In fact, dealers frequently stretch out the lease term to five years or more to make the payments even lower. First, leasing may not be right for you, especially if you drive more than 15,000 miles per year - but the dealer may not explain that part - and a five year lease on a car that only has a three year warranty exposes you to expensive repair costs for a car that doesn’t belong to you.

One of the most common forms of auto fraud is failing to disclose preexisting and/or known problems with the vehicle. Cars often have documented histories of mechanical problems. Some dealers try to sell vehicles with known mechanical problems by either misrepresenting the car’s condition or simply by not telling the prospective buyer about these problems. Do not be fooled just because a vehicle appears cosmetically clean and mechanically sound. If the vehicle you are interested in comes without a warranty or “as is,” you should be extra cautious.

One form of hiding a vehicle’s history is called “lemon laundering.” Many states, including California, have lemon laws, which essentially require a manufacturer to repurchase a defective vehicle. Lemon laundering is the resale of these defective vehicles without disclosing their prior history. A possible sign of lemon laundering is when a car that is close to new is being sold as used.

Other forms of this type of fraud include misrepresentations about prior owners or prior use. For example, dealers often tell consumers that a car has only had one owner, when in fact it has had multiple owners. Dealers may also conceal the fact that a vehicle was a rental car. Dealers may also hide a vehicle’s history as stolen and recovered; stolen vehicles sometimes have undetected and unrepaired problems.

To avoid this practice, you should have the vehicle you are interested in inspected by a mechanic and/or an auto body repairperson before you buy it. You should also get a vehicle history report. Look for evidence of a questionable history. For example, was the vehicle owned by multiple owners or a rental car company? Does it appear as if a manufacturer repurchased the vehicle? In more complicated cases a complete title history may be obtained from the DMV.

If you suspect that you have been a victim of this type of fraud, you may wish to consult with an attorney who specializes in auto fraud.

One of the most common forms of auto fraud is the practice of misrepresenting the true condition of the vehicle. Dealers often tell buyers, “The car is in excellent condition.” Unfortunately, they are not always telling the truth. Do not be fooled just because a vehicle appears cosmetically clean and mechanically sound. If the vehicle you are interested in comes without a warranty or “as is,” you should be extra cautious.

Vehicles that have been wrecked, declared a total loss by an insurance company, or rebuilt have what is called a salvage title. The title of the vehicle (and registration) must disclose that the vehicle is a salvage. It is unlawful to sell a salvaged vehicle without telling the buyer. The price of a salvaged vehicle is generally much less than an equivalent non-salvaged vehicle. Salvaged vehicles may have major safety defects depending on how well it was rebuilt. It is usually not very difficult to find out whether or not a vehicle is a salvage.

Other vehicles may have been wrecked and rebuilt, but were not declared a total loss by an insurance company. These types of vehicles are much harder to identify because they do not carry the salvage title.

To avoid this practice, you should have the vehicle you are interested in inspected by a mechanic and/or an auto body repairperson before you buy it. You should also get a vehicle history report. You can get summary title reports from service providers such as: Carfax (www.carfax.com), AutoCheck (www.autocheck.com), and CarFraud.com (www.carfraud.com). Look for evidence of a salvage history. For example, if an insurance company held title to the vehicle, it could mean that it was wrecked and declared a total loss. In more complicated cases a complete title history may be obtained from the DMV.

If you suspect that you have been a victim of this type of fraud, you may wish to consult with an attorney who specializes in auto fraud.

A motor vehicle salesperson recently explained to me that there are 11 steps that dealers use to get the most money out of you that they can get in a deal. I call it 11 Steps Dealers Use to Rip You Off.
For new cars, dealer prep means doing what the factory requires but watch out they don’t try to charge you for “dealer prep” because the factory actually pays them for it anyway. Charging you too gives them double the money!
For used cars, it could mean anything from putting sawdust in the transmission to “clocking” the odometer (altering it to reflect a more desirable lower number that makes the vehicle worth more), or a lot more.
Tip: For used cars, ask to take the car to get an inspection done by an independent mechanic. If they won’t let you, there’s probably a reason so be careful. For new cars, watch out for all the extra charges the dealer will try to tack on to the deal…they are all negotiable!

One of the auto industry’s dirty little tricks is the practice of lenders giving kickbacks to dealers for charging high interest rates for the car loans. A good example of this would be when a buyer has been qualified for an 8% loan rate, the dealer can, and will in most cases, attempt to charge a higher rate.

Many dealers will tell you they have a 12% rate available (a lot of consumers do not know better) and will jump at the deal just to get credit and drive away in a new or used car. Your $20,000.00 automobile over a 60 month period would have had a $433.56 payment at an 8% rate but now because you signed your loan agreement for a 12% rate you payment will be $475.64. Guess who get the extra $42.09 per month? You guessed right, the dealer who suckered you into the additional rate of interest.

To get the best possible deal on a new or used car or truck, knowledge and information is your best bet. Knowledge is always power in these cases. Dealer scams such as the increased interest rate, packed payments and other common little tricks can quickly remove any savings that you thought you were receiving. Learn how to calculate you own monthly payments, use the internet to your advantage and learn how to negotiate with dealers.

The defective parts in the materials or automobiles are covered by extended auto warranties for one or additional years, as specified in the terms of the extended auto warranty. Not all customers take advantage of this extended auto warranty services. These extended auto warranties are commonly sold by the dealers or the brokers. Most of the instances, the cost of the extended auto warranty exceeds the cost of the repair up to an extra year for all purchases made and in other instances it was not worth. Infact these are nothing more than a service contracts.

An extended auto warranty is where you pay an independent dealers or manufacturers, to fix or replace failed parts and the consumers are plunked down to $1,000 for a 100,000 mile extended guarantee. Where, your dealer may resell the extended auto warranty similar to a broker. This is the reason you should buy the vehicle from any of major manufactures with an extended auto warranty. If the dealer is reselling the extended auto warranty, then you can conclude that there is a markup of prices.

Generally after your vehicle warranty expires, the dealers and brokers insist you to purchase a service contract. Typically these extended auto warranties had become a money making tool for the dealers as it’s an inexpensive resolution to them.

Go with the seller who gives you the best deal and with whom you are most comfortable. Some experts believe you may be better off buying from a private seller. They think a private seller will give you a more accurate description of the car’s faults based on personal knowledge, and a lower price. Private sellers, however, seldom give warranties, which dealers sometimes offer. Also, some states have regulations governing used car sales that may apply only to dealers

Sooner or later the cost issue comes up. To take the “sting” out of the discussion, many dealers will focus on monthly payments and avoid all price discussions. When asked what it costs, many times the answer will be another question like “what kind of monthly payment were you looking for?” This switch to payments is best when it’s done very smoothly, so the customer never realizes they left the cost issue entirely and may never get back to it. Oftentimes, the sales person will leave it up to the Closer or the Finance Manager to handle the price issue and try to stick to the payment topic alone. This has the advantage of keeping the less experienced sales person from costing the dealership money that the Closer or Finance Manager can make for the house (i.e., the Dealer).

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