Car-dealer tricks: The balloon bamboozle

It is legal for car dealers to offer loan periods extending out six or seven years. After all, many cars last longer than they used to, and longer loan terms mean your monthly payments are lower than they otherwise would be.
However, there’s still a danger for car buyers. These loans usually take forever to pay off. Most car buyers are likely to continually owe more on their car than it’s worth. The reason for this is because your car is depreciating faster than you’re paying it off. In case you’re considering a long loan period, the best option for you is probably to consider a less expensive car, which will be better suited to your budget.
Today, some dealers will offer that you purchase a car for very low monthly payments, but with a balloon (inflated or much larger) payment at the end of the loan period. In a few cases, this can be a legitimate way to finance a car. For instance, you may just have graduated and can realistically assume that your income will rise by the time the balloon payment comes due.
However be wary and make sure you know what you’re doing.
You can easily avoid all of these dealer tricks and car fraud by educating yourself. There are many dealers are good and honest, but there are always some that you need to be more careful of. Always know what you want to buy and know your alternatives to dealer financing. Then, be careful of the dealer selling you things you don’t want.