Dealer Fraud

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.

The purchase of a new car may sometimes be complicated and confusing for car buyers. For most Americans the purchase of a car is the second-largest purchase they make. Some dealerships assure that you can buy a car from start to finish in an afternoon. However this is not always the best option for the consumer. Following are several tips to use to avoid any type of dealer fraud and scams when you buy a car.

1. Go to the dealership just to look around and drive the cars. Never buy the first time. This way you will have an opportunity to go home and get some information on the internet, including dealer cost, safety ratings, option prices, and any manufacturer to dealer incentives that the dealer has certainly not told you about.

2. Before doing to the dealership define exactly what you can afford to buy. There are dealerships that use different fraudulent practices and will get you to sign on for a more expensive car than you can afford. It would be a good idea if you talk to your personal banker or credit union officer before going to the dealership. Don’t give the dealer an option to repossess the car.

3. Keep in mind that dealerships make most of their profit in the finance department and for this they use a number of dealer tricks. Sometimes dealers may increase your monthly payments by just a few dollars, even $20 per month, over about a five year period is like giving the dealership $500 extra on the spot. So make sure that the finance manager shows you the calculation whenever he calculates something.

Today there are many fraud dealers in the industry who are ready to scam you or taking advantage of you. Each of these dealers is well acquainted with tactics to be used to scam the buyer. All they care about is making as much profit out of buyers as possible by selling them a wrong car using their oily tongue. Thus some car deals leave customers with illegal cars.

Be aware of such dealers. One of the fraudulent practices they use is rendering a new look to an accidental car and selling these cars to consumers. Some of the strategies employed by such dealers are:

The car dealer makes changes in the car’s odometer. They reset the odometer so that it has a fake odometer reading and the car appears to travel less miles than it originally had. This dealer trick increases the value of the car. However you can still ensure the originality of the car by looking for tale signs such as wear and tear to the pedal rubbers and seats.

To avoid the possibility of buying a fraudulent vehicle first have it inspected by an independent vehicle inspector.

Car dealer fraud is becoming more and more common in our country. The dealer tactics that are being used are so sly that even those consumers who are informed about all kinds of dealer tricks and scams are being taken for hundreds, and often thousands, of dollars.

Thus, at the expense of consumers car dealers add many millions of dollars each year to their profits by using these scams. Of course, some profit is necessary, however, consumers are being ripped off beyond reasonable and are buying a lot of useless add-on products and services, the unnecessary markup of vehicle prices, the hidden inflation of loan terms and by other means.

Evidence from recent litigation, industry insiders and consumer complaints show that, unfortunately, these fraudulent practices are not restricted to only a few areas or dealerships. Which is even worse, it is very likely that deceitful trends are spreading as more and more dealerships become part of major conglomerates.

Payment or deal packing is considered a dealer fraud because of the uneven bargaining power in the exchange. In this case the dealer is not given the opportunity to make an informed decision about whether he/she really needs to purchase each add-on item. Most customers often end up paying more than a package is worth. This happens because the customer is not given the price of each item and allowed to comparison shop.

Remember, that many add-ons are not covered under the manufacturer’s warranty. If things go wrong, you’re out of luck. Which is even worse, add-ons might even void parts of your vehicle’s original warranty!

Besides payment packing or deal packing, dealers can engage in a number of other unfair or fraudulent practices, so be aware.

Fraudulent practices in the used car department increase as new car sales are slowing down. Car dealers today use dealer fraud just to keep the money flowing.

According to some predictions by the end of the year the US automakers will drop to less than a 50% share of the market in US new car and truck sales. It should be mentioned that sales figures are dropping not only for the Big Three but for virtually all makes. That’s why consumers should be more careful now if they decide to visit a local car dealer and purchase a used car.

One of the newest dealer scams include the tire care package that some dealers are packing into your monthly payment, sometimes without the buyer even knowing it. The tire care package is really not much more than just a scam when the consumer pays the car dealer for tires that he might (or might not) need in the future.

Negative equity scam complaints are also increasing. This happens when the dealer informs that your trade in vehicle is not worth what you owe on it “but don’t worry, we’ll pay off your trade in anyway”. What they don’t tell you is that they are jacking up the price of the car they’re selling you too.

Another common dealer fraud is the Gap Insurance when the dealer sells you a high priced guarantee. Generally the dealer promises that if your car is stolen or wrecked and your own insurance won’t pay it off, then they’ll put money toward the payoff too.

According to the requirements of the Automobile Sales Finance Act (AFSA) all obligations of both parties in a transaction must be contained in a single document. This, basically explain the reason why purchase agreements are so long in the auto industry. However, sometimes dealerships use fraudulent practices and ask customers to sign additional documents, including trade-in forms stating that the customer agrees to pay any difference between the value of their trade-in vehicle and the amount owed on that vehicle. The other trick is when the dealership agrees to make payments on a trade-in vehicle but does not include the trade-in vehicle in the purchase agreement. The “hold check agreement” when the customer agrees to pay additional money towards the down payment on a later date is also a common practice. These documents violate the one document rule.

Automobile dealerships are most concerned about their profits. For this purpose they use different schemes and defraud consumers. These fraudulent practices include, but are not limited to, misrepresenting discounts in advertising and not disclosing vehicle’s history, altering the terms of the contract and forging signatures, inflating quotes of monthly payments and then selling add-on products such as service contracts, paint sealant and alarms as if they were part of the deal, and adding amounts owed on trade-in vehicles to a purchase or lease contract without disclosure to the consumer. Most consumers are unaware of these frauds. If you would like investigate your potential claim consult with an experienced automobile fraud attorney.

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[ To Learn more our services and areas of practice, please visit our website at

www.DealerFraud.org]

State and federal consumer protection laws prohibit automobile fraud claims such as odometer tampering, auto dealer financing scams and vehicle history misrepresentations. If you think your car dealer committed fraud or any fraudulent practices against you, immediately contact an experienced car dealer fraud attorney, who will help to preserve your legal rights.

Odometer rollback or tampering or is one of the most common dealer practices. To avoid this car fraud check for maintenance and oil change/lube stickers, as well as any receipts that could contain mileage information greater than odometer mileage. Your car dealer is required to provide you with a written statement, where the actual mileage on the odometer should be disclosed. If at time of purchase the car dealer did not provide you with this, contact an attorney.

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[ To Learn more our services and areas of practice, please visit our website at

www.DealerFraud.org]