Often car dealers tell consumers that their trade-in vehicle is worth less than it really is and a lot less than customers think it is. What’s even worse sometimes they fail to inform the customer that the car has a so called “negative equity“.
Negative equity is the term most car dealers use to explain why your car wasn’t worth what you owed on it when you wanted to trade it in.
“Upside down” or “in the bucket” are similar terms that car dealers use to trick car buyers in order to literally steal the trade-in vehicle. This happens when the dealer takes the car as trade-in but later adds the payoff amount to the price of the car that the customer is buying.
Avoid this scam: Know for sure the price of your trade-in and the amount of your loan payoff before going to the dealership. You may check trade-in values online. Look in newspapers to see what dealers are selling your kind of trade-in vehicle for. Remember, the more you are informed, the harder it will be for the dealer to scam you. Also, be careful for each step of the process.
