Dealer Fraud

1.    Step 1

Understand that aim of any bait and switch artist is to get the person inside the store. If you go to purchase a particular car at a certain price, and the car is gone, you may have been lured by bait. Don’t bite. Insist on a rain check for the car. If you can’t get one, leave the store.

2.    Step 2

Play the skeptic. If a price sounds too good to be true, assume that it’s nothing more than bait. For example, a car dealership ad may feature a car at a great price, but you find out it has no special features. Also the advertised monthly payments may be for the longest possible terms or only with the best credit score possible.

3.    Step 3

Beware of vague pricing. If the salesperson will not talk on the car price and just wants to talk about monthly payments, a bait and switch is in progress.

4.    Step 4

Demand to see the originally quoted car. If the salesperson will not produce it, then perhaps it never existed and they are using the bait and switch to sell higher-end merchandise.

5.    Step 5

Research any car before shopping. If you can’t find it at a price remotely as low as the offering, you may be looking at bait.

6.    Step 6

Read the fine print of any advertisement or contract. In the bait and switch, fine print may alter the agreement you thought you were signing. Read each section of an advertisement or contract before signing or buying anything.

We hope these 6 steps will help you avoid becoming a bait and switch victim.

Buying a car means that you will own the vehicle when you finish making payments on it.

Leasing means that there is a period of time – the lease period – when you’ll be making monthly payments on the car and at the end of the lease period you will not own the car (unless you make a large payment to own it). Plus, if you want to return the car before the lease period is over, you’ll have to pay a big penalty (an “early-termination fee”) to do that.

Customers routinely fall into auto scam when car dealers lead you to believe that you are purchasing when you are really leasing (and vice versa). Among other misrepresentations is telling customers that you will own the car at the end of the lease. This is far from reality because almost all leases require you to make a large payment at the end of the lease in order for you to own the car.

What you should do?

• Read carefully and make sure you understand the entire written contract. If you want to buy a car, make sure the contract you are signing doesn’t include the word “lease” in it. It seems easy and obvious yet many customers are easily tricked at the dealership. Bring a friend if you are not sure.

• Don’t allow dealers to pressure you into a lease if you want to buy.

• Shop around and make sure you fully understand what your obligations are to avoid becoming a dealer fraud victim.

When buying a new car, people most frequently turn to car dealers as to the most knowledgeable and trustworthy people to buy a car from. However this is not always the case. Some car dealers are simply dishonest and use really mean scams for tricking you. So one should be extremely cautious to avoid becoming a dealer fraud victim. Today we will discuss the The Payoff  Your Loan Scam and try to reveal the related  dealer tricks.

This is when the dealer offers to pay off the balance of your current car loan no matter how much money you still owe. It is a common sales strategy. When the average buyer hears this, they think that by purchasing a new car with a new dealership, they will automatically owe no more money on their current car. That couldn’t be further from the truth. What really happens is that the car dealership does help you get out of your current contract, however they are normally forgetting to tell you how high your fees are going to be for breaking the lease agreement with your old dealership. So now you will have to pay fees that are in the thousands to compensate for it. You will also not be able to refinance for a new car until those fees are paid. Of course the dealership can add the cost on to your contract with them at a substantially higher rate. The sole reason why the dealership agrees to this deal is because they want to get more money off of your current car. They aren’t really doing anything for you at all. The dealership will also give you far less than the car is worth on the trade in. This car scam works because they will up your monthly fees, and then sell your trade in for more money than it’s worth. The dealership will then extend your monthly payments in order to conceal extra year of payments.

To avoid this car dealer scam, you have to ride out your current lease until the end. If you are really determined to get a new car, then you should try selling your current car on your own. Possibly make a deal so that the buyer pays much down and takes over the lease payments. Make sure you get legal documents so you don’t end up with bad credit from someone who decides not to pay. Also make sure the buyer carries enough car insurance.

There are car companies that offer a so-called “single-payment lease” for those consumers who don’t want to make monthly payments, but do want to lease a vehicle. In this type of leases the entire lease is paid in one sum at the time of signing. Typically, a single-payment lease is the same as any other lease, but the cap reduction payment is large enough to drive the monthly payment to zero. As all of the depreciation and interest is paid at the time of signing, single payment leases save the consumer finance charges. On the other hand single payment leases represent less risk for the leasing company, so they offer a much lower lease rate.

Single payment leases are OK if the car dealer calculates the single payment correctly. However, car dealers sometimes scam consumers by charging the consumer interest on the single payment for the entire lease period. Basically the dealer may calculate a monthly payment based on zero cash down then multiply it by the number of months in the lease. The dealer then collects this amount as the “single-payment”. Thus the consumer has to pay interest on the full amount of the lease including the single payment. It turns out that by simply calculating the single payment incorrectly the dealer cheats the consumer out of his/her savings and makes a profit of thousands of dollars.

You can avoid this dealer fraud if you calculate the single payment yourself and make sure that you are not being overcharged.

Car leasing is a method when you can have the use of a vehicle by financing it. Leasing, typically, differs from buying and the consumer never actually owns the vehicle, but uses it over a set period of time. The length of car leasing contracts can be 12 months, and can last up to 24 months or 36 months.

The person who leases the vehicle is making monthly payments to the owner or the dealership. Car leasing may often be cheaper than car loan repayments. However, the person who leases the vehicle should remember that at the end of the lease the customer will not have over a set period of time. Be aware because there are some car dealers will try to scam you by telling that you will own the vehicle at the end of the lease term. However, at the end of the lease you will be required to pay additional sum.

There are a number of advantages that leasing gives. One of them is that car leasing payments usually work out less per month than car loan repayments. At the end of the lease contract the leaser returns the vehicle to the owner and do not have to worry about the value of the vehicle or the hassle of having to advertise and negotiate a sale. When leasing you don’t need to pay down payments like when you purchase the vehicle. You will also afford vehicles that would ordinarily be out of their price range.

Leasing may be beneficial for both the consumer the dealership, however, there are a lot of dealer tricks and car leasing fraud that will make you pay more and make your leasing contract complicated. So, if you have decided to lease a vehicle then carefully read your lease agreement before signing.

Car industry is one of the industries that are hit a lot by scams. It seems like a new scam is used by car dealers every day. And if you are not careful enough, you will probably become the next victim of these unscrupulous salespersons. However, you should know that there are ways to protect yourself from new car dealer scams. Here are some of the ways you can use to protect yourself from car dealer fraud.

The best way to avoid new car dealer scams you must be aware of the common methods used by dealers to fool car buyers and make them spend more money than they should on a new car. The most common scam is concerned with the monthly payments set for a new car. The practice of many dealers is to set the monthly payment at the lowest possible cost to make it seem that the customer is getting the best deal. However if you look closer you will notice that the car is overpriced. Avoid this scam by always checking the overall price of the car before agreeing on the terms of payment.

Some car dealers will also try to scam you by informing that you cannot negotiate the prices of the cars. This is simply not true! Remember, that everything is negotiable.

Often car dealers will offer extended warranty deals that are unnecessary. Do not let the dealer decide for you whether you need an extended warranty or not.

The dealership can be an overwhelming place for most of the car buyers. Some of the customers rely on the car dealer to get the best deal for their car. However, relying on the dealer to help you with the terms of your contract is a bad approach to purchasing a vehicle; because you will probably pay much more than necessary simply because you don’t understand what is being said.

Here are a few of the most common dealer tricks used to make more profits from unsuspecting consumers:

Leasing over Purchasing a Vehicle
Car dealers will tell you that leasing is a better deal than purchasing, and will promise you a low monthly payments. Sounds good at first but as always there are loop holes. Most importently the car ealer don’t explain you that there are the long contracts and stiff penalties for ducking out early on your lease! Among other things like limited mileage allowances, and hefty repair costs with additional charges for every mile you go over your contracted limit. Now you may say that a mere .10 to .20 cents a mile isn’t much but they will quickly add up!

Only a 2-3% APR on the Lease
The dealer will only give you half the calculation in the interest rate. When in actuality you must multiply the 2-3% by 24 to get the actual interest rate. The dealer will quote you the lease money factor, instead of the complete rate to get you to feel you are getting a better deal.

There is nothing worse for a consumer than falling for an auto sales scam. The purchase of the vehicle is one of the most important purchases and if you fall for the scams of a car dealer you can loose a lot of money. However with a little bit of information you can avoid auto sales scams. Following are 5 important tips you can use to avoid auto dealer fraud.

1. Always go into a dealership with a strong understanding of how much you can afford for monthly payments. Remember, that a car dealer wants to sell you a car and make a profit and will often try to get you to spend more.

2. Watch out for predetermined monthly payments. It’s a common tactic for dealerships to plaster a sign on the vehicle windshield advertising a low monthly payment for the car. This makes a customers believe like they are getting a good deal. However, when you add up the total cost you find you are actually overpaying. This is why you should always have the total cost calculated before signing any document.

3. One of the oldest scams is a classic bait and switch. The car dealer will give you a great price break on the car up-front only to load up his profits by adding a lot of unnecessary extras such as extended warranties, gap insurance plans and special paint sealants. Avoid it by declining any extras.

4. “This deal is only good for today.” This is a common dealer trick and is designed to get you to buy today. The truth is car dealer is afraid that if you leave the dealership and think the deal over you will never come back again. Dealership will still be willing to sell you the car and make you a deal tomorrow.

5. You can negotiate any price. Never get to thinking that the terms of the sale are final. It is good for you to know that any price is negotiable at a car dealership.

When you are shopping for a new or used car you want to get the best deal and best value that is possible. It is important that you know how to avoid car dealer fraud and dealership scams to get the best deal. Following are a few tips on how to avoid car dealer fraud, you which will help you to negotiate a better deal from the sales staff.

Do Some Research
The best thing to do before buying is doing some research on the make and model that you are most interested in. Try to find out as much as you can about your car you intend to buy, including:
Pricing - Shop around for the best price.
Cost of Ownership - Don’t end up buying a car that you can’t afford to drive. Check out the costs of Maintenance, Gas Mileage, Sales Tax, Depreciation, etc.

Don’t Buy Based on Monthly Payments
Always determine how much you can afford to pay each month, before entering the dealer’s lot. Car dealer will probably ask you this question the first. Also, do not let the dealer handle your financing. Dealers use financing process to scam you and make profit. Always try to have a pre-approved loan before you go into the dealership.

Know When to Walk Away
Sometimes you can avoid car dealer fraud by simply not making the deal. Remember, you can always find a better deal if you spend a little more time and will save on your car. So, if you think that the dealer is trying to scam you just politely excuse yourself and leave.

Sometimes we come across ads by dealerships promising Zero Down, Zero Percent Financing and No Payments for six months on new car purchases and car dealers spend millions of dollars on this each year. At first this sounds like a good deal. However, you should know that this is simply a scam.  Approximately 10% of those that apply for zero percent interest car loans actually get approved. The reason is the law credit score. Eventually, when you get approved for the zero interest auto loan it turns out to be a very short term loan (24 to 36 months). Your monthly payments in this case will be really high. Car dealers offer a zero percent interest auto loan for select models only. So it turns out that most of the consumers won’t qualify for zero percent interest car loans, as they can’t afford the short term car loan with high monthly payments and the dealer won’t probably offer this option for the car you consider.