More Car Dealer Scams To Be Aware Of
Author: Neil Teasdale
In one of our previous articles we listed the "Top 5 Car
Dealership Scams To Avoid," but it doesn't stop there. This
article continues with a few other car dealer scams that we've
heard happening around the car market. Again, there are a lot of
credible car dealerships that won't try these but it's always a
good thing to know these in case you get a dirty car dealer or
salesman.
6. The Dealer Mark up Scam
This is an unnecessary fee that the dealer charges for no
reason other than greed. This fee can be seen on the orange
sticker marked on the manufacturer's suggested retail price
(MSRP). The additional dealer markup is nothing more than
requiring more money for no real reason. They can include all
kinds of extra fees in the additional dealer markup.
When you see an extra dealer mark up fee, ask the dealer to get
rid of it. If they refuse, it is pretty much up to you, but
remember that if you do pay the extra dealer markup, you are
overpaying for no real reason.
7. The Payoff Your Loan Scam
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 it, 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 dealership does help you get
out of your current contract; however, they normally are
forgetting to tell you how high your fees are going to be for
breaking the lease agreement with your old dealership. You will
now be responsible to pay fees that are in the thousands to make
up for it.
You also will 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 dealership only agrees to this deal 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 then the car is
worth on the trade off. Basically this scam works because they
will up your monthly fees, and then sell your trade in for a
more money than its worth. The dealership then extends your
monthly payments so that they can make it appear that you are
paying a small amount monthly when you don't even realize that
you have committed to an extra year of payments.
To avoid this scam, you have to bite the bullet and 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. Just sell it so that the buyer just takes over the
lease payments.
8. The Used Car Sold "As Is" Scam
This is when a dealership will sell you a car that has been in
a car wreck, but they will tell you that the car has been
completely refurbished. When you see the car it has a sticker on
it that says "as is" on it and no warranty is included with your
purchase. This is the dealer's way of telling you that you can't
bring the car back, you are assuming all risks for the car, and
that it is not under warranty.
To avoid this scam, don't buy a car without a warranty or one
that says "as is" on it. By doing this, you might as well buy a
car from a stranger on the street with the same deal.
9. The Bounced Check Scam
This is when you walk into a dealership with a bank draft and
the dealership charges that they can't accept your draft because
your bank bounces checks often so they now refuse checks from
that bank. Of course, this leaves the table open for them to get
the extra money they want by offering to sell you a car at a
higher interest rate.
You can avoid this scam first by getting your drafts from First
Again Auto Finance. Then let the finance manager know that you
are aware of the scam that they are pulling and that First Again
Auto Finance is in the business of giving loans so the checks
don't bounce.
10. The Forced Credit Application
If you are hoping to pay for a car outright or in cash with a
bank draft or check that is what you should do. Some dealerships
will not let you. You will hear one of these lines so that they
can try and get you into paying monthly terms for more money.
"State laws require that you must fill out a credit application
before I can sell you this car." Or "Everyone that buys a car
from us fills out a credit application first." Or maybe "It's
the company's policy."
If you hear any of these lies, then know what's going on. When
you are paying cash why would you think that you need to fill
out a credit application? It doesn't make sense. No state will
force you to apply for credit when paying cash. Would you have
to fill out a credit report if you want to buy a sofa or
groceries while paying cash? See how silly this is. To avoid
this scam, just laugh in their faces.
If you can identify these scams then you stand a great chance
of saving a ton of money down the road on your new car. Stay
tuned for our next two posts as we explain some other car
dealership scams that have the "Special Offer" tag on them.
About The Author: Get valuable tips and links for car buying
online and buy cars online including online car loans, online
car insurance, online car auctions, car buying mistakes and car
dealer scams to avoid and so much more at
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