In most transactions which include a trade-in vehicle the car dealers use the Negative Equity/Over-Allowance trick. Typically, the car dealer makes the customer believe that the dealership is valuing the trade-in vehicle at the same amount that’s owed and the customer will not owe anything on the trade-in. In reality, however, what the dealership does is to give cash value less than the amount owed and adds the difference to the cash price of the vehicle being purchased. Even if the consumer is aware of this and agrees to the transaction the actions of the dealer are illegal and constitute fraud.
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