Car Dealer Scams to Avoid

Car dealer scams are becoming more and more common these days. The main reason for this is that most car buyers are not prepared to deal with the car dealer and are not aware of frequently used dealer tricks and tactics. It should be noted that there are car dealerships in the industry that are ethical and honest, but there are also a lot others that try to earn as much money as possible by using car fraud.

Car dealer fraud – You must fill out a credit application

It is a good idea to arrive to the dealer’s lot with already arranged auto financing. This way you will be in a better position to negotiate a car deal.  However, the car dealer will still make you sign a credit application, by telling you that this point is required by Patriot Act.  Remember that this is just another dealer trick. In fact, the Patriot Act requires banks and other financial institutions must get all your personal information before you open a new account, but it says nothing regarding buying a new vehicle.

Car dealer fraud – The credit score lie

Another trick used pretty often is the credit score scam. This dealer fraud happens when the car dealer tells you that your credit score is lower than it actually is. This way the car dealer arranges car financing for you with much higher interest making a lot of profit. The best way to avoid this car fraud is to have a copy of your credit report before you going to the dealership. Keep in mind that you need to get as much as information as possible, including information on your credit score and all the other factors associated with your credit, to avoid dealer scam.

Car dealer fraud – Trade payoff scam

You have probably seen this kind of ads during big sales. The dealer promises that they will pay off your trade no matter how much you owe. In fact, they pay off your trade-in and add the outstanding balance on your existing car.  The truth is, this is just another good opportunity for you car dealer to dealership to trick you into financing, which will be more profitable for them.

If you think that the car dealer used one of the above mentioned tricks when you were buying a car you should consult a dealer fraud lawyer, who will be able to evaluate your case and explain your rights.