When you’re looking for a new or used car, the top place to start looking is a car dealership. They have vast inventories and often offer deals or add-ons that make your purchase all the more worthwhile. Unfortunately, there are some dealerships that take advantage of buyers with less-than-honest practices.
These shady dealers get away with their scams because most consumers don’t know what red flags to look out for. This list is here to explain how these scams work and what to be aware of so you can shop for your next car in peace. Here’s everything you need to know.
The Bait and Switch
This classic fraudster tactic is a common one in the dealer industry. The salesman gives you a quote for the price of a vehicle, then charges you more for the car in the contract. This could be a higher initial cost, hidden fees, or any other costs that raise the price of their initial quote. Always check the paperwork and fine print to avoid this scam.
Hiding a Lemon
Used cars can be an excellent, money-saving option when shopping around. However, some have been involved in serious accidents and others may have major defects. A dealer is required to disclose this information to you long before you sit down to sign the paperwork.
It isn’t uncommon, unfortunately, for dealers to hide this information. Test-drives, inspections, and asking for repair records is the best way to avoid this scam. If a dealer refuses any of these requests, don’t give them your business. If you have fallen victim to this scam, hire a lemon law attorney as soon as possible to seek compensation.
Packing the Contract
One way scam artists make off with more of your hard-earned cash is to pack the vehicle’s contract. This simply means they throw in add-ons, options, and accessories that you didn’t ask for. Protection packages and rustproofing are the most common. Again, doublecheck the contract and all of the fine print.
Trading in your old car is an excellent way to put more money down on a new one, but you’ll need to know the cost of your current model before heading into a dealership. Otherwise, the dealer may lie and tell you your current vehicle is worth far less than it actually is.
Another common scam, this tactic revolves around making you believe you have a low credit score. The goal is to deprive you of a lower interest rate, getting you to pay far more than you should when financing. You can check your credit score for free on sites like creditkarma.com beforehand to avoid this scam.
The Yo-Yo Sale
In this scenario, you buy a car and drive it home. Within the next few days, you get a call from the dealer saying there was an issue with financing. You head back to the dealership to fix the paperwork only for the dealer to tell you never qualified for special financing or for the agreed upon rate in the first place. Then, they try to get you to finance the car at a much higher rate.