Car dealers are often portrayed as predators just waiting
for an unsuspecting customer to come along. This is because many people believe
that they are always on the prowl for unsuspecting buyers that are not very
knowledgeable about cars. This can be unfair because we can argue that there
are Car Dealers out there who
would not cheat just to get an extra profit.
How do you tell the difference?
To avoid becoming a victim of sneaky car dealers, look at
the following auto financing scams.
Yoyo scam
You will be allowed by the dealer to bring the car home as
soon as possible. The dealer will take care of the financing, a few days later
he will contact you again and tell you that there was a problem with your
financing plan. He will tell you to set up a new financing scheme through him
which, of course, will be at a higher cost and this will also entail a very
high profit on the dealer's part.
Be wary of this trick and avoid it at all costs if you
detect it. If you have a bad credit standing, don't have your financing done by
the dealer and make arrangements for your own financing. If you ever do avail
of the dealer's financing, you should never drive the car back to your home
immediately. Wait for at least 24 hours just to make sure that the processing of
your financing scheme has been completed already. By allowing 1 whole day to
pass by, you are assured that the dealer cannot use this scam on you.
Window etching trick
Window etching is a very common scam. What the dealer will
do is to offer to etch the VIN number of your car onto the window of the car
for a price. Basically, the price ranges from as low as $300 to as high as
$1,000. Some buyers think that they did a good job by being able to talk down
the price to a few hundred dollars, but unfortunately for them, a few hundred
dollars is still a good amount of money. The best way to avoid this kind of
scam is for you to buy an etching kit that you can do on your own. This is
available in most auto shops and costs around $20. See how much they profit from
you
Preparation fees
For preparing your car, the dealer will often add an
additional preparation fee to your bill. Just to conduct a test drive, replace
fuses, or take the car's plastic cover off will have your bill increasing by at
least $500 If you visit other shops, you can get the information that these add
on costs are already included in the MSRP as set by the manufacturer. Some
dealers automatically add it to the buyer's order to make it look mandatory. To
take care of this scam, you can ask the dealer to classify it as credit (it
should be identical to the amount of the preparation fee) on the following
line. If the dealer does not agree to this, you can just simply walk away from
the dealership.
Market adjustment
The dealer will convince you that the vehicle you want is
selling like hot cakes and very popular. In order to sell you the vehicle, they
will do some "market adjustments" amounting to a few thousand
dollars. This is usually indicated by a tag near the MSRP tag set by the
manufacturer. Even if the car you want is very popular and is very much in
demand, if it is in stock you should not be tempted because getting a
"popular" car is not worth it if you have to pay a few thousand
dollars more. You should never pay more than the MSRP set by the manufacturers.
If you do, then you are allowing others to take advantage of you.
Warranty extension
Although this type of scam is old already, it is still being
used and there are many who fall for this trick. What happens in this kind of
scam is that when you make a loan for the car, the dealer will tell you that
you are required to purchase an extended warranty because it is one of the
conditions of the bank. There is a simple way of avoiding this scam. Ask the
dealer to specify clearly in writing that the extended warranty is required for
the loan to be approved. The dealer will most probably find a way to have it
excluded. If he persists in including the extended warranty, do not do business
with this guy and go to other dealerships.
These are some of the most common auto financing scams that
are utilized by some car dealers. Always keep these in mind if you are going to
buy a car. If you or a friend were treated fairly by a dealer in the past,
consider using the same dealership again. It's a good indication that they do
care about their customers and aren't just looking for a "fast buck."
Think very carefully and do not buy on impulse. Good luck to
you and go get that car.
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