Avoid Car Dealership Scams

While the majority of car dealers in the market are dishonest, you need to be an informed consumer. They use every emotional trick, to take as much money out of your wallet as possible. If you are planning to buy a car from a dealer, get prepared against the most common auto dealership scams occurred today.

Indeed the information will helpful for you to avoid the main scams. Those are:

Scam 1: The Credit Score Scam
This happens when your friendly and helpful dealer tells you that your credit score is lower than it really is, so that they can get you for higher interest rates. This scam can happen to anyone. It doesn’t matter if the has a good or bad credit.

Avoid Scam 1
Get your own copy of your credit report and bring it with you. If you have your own copy of it, it will become more difficult for the dealer to lie.

Scam 2: The Interest Rate Bump Scam
If you haven’t secured your own financing before going to the dealership, then you are relying on the Finance salesperson at the dealership to arrange the financing and get the best rate for you. They get you approved at the lowest rate and later add a couple extra points on it. For example they may get you 6% interest rate but tell you the best rate they were able to find is 9%. Remember that financing is a good way for the dealer to make more profit.

Avoid Scam 2
If you know your credit score, you can easily avoid this scam. Also get information about the current interest rates to know the right rate for you. Make sure that the dealer did not increase the length of the loan to keep your payment lower.

Scam 3: The Financing Scam
The dealer gives you the keys to your new car and tells you that the sale is final and you may drive your car off the lot. A few days later, you get a phone call from the dealership letting you know that the loan fell through because you did not qualify for the interest rate you thought you would qualify. Then they ask you to go back to the car dealership to work out a new loan.

Avoid Scam 3
You can avoid this scam by not financing the car with the dealer if you know that you have bad credit. You are better off going to a credit union and financing the car yourself. When you buy a new car the deal should be made on the price of the car, not on the monthly payments.

Scam 4: The Extended Warranty Plan
During the purchase process most of the dealers will try to sell you an extended warranty plan or service contract deal. They will try to explain you that it’s a condition of your bank’s auto financing.

Avoid Scam 4
Ask the dealer to put “extended warranty plan” in writing, so that you can take it to the bank and ask directly.

Not all dealers, but the majority are dishonest and unscrupulous and they are in business to make money.