Monthly Archives: October 2008

It would be a good idea if you decide to never finance a vehicle through the dealership because when you meet the finance manager whatever payments, interest rate, etc. you had may get tossed out. This is when the dealer fraud may begin. For example the dealership may try to “stuff” your contract with extras like unnecessary warranties, costly etching, glazing, environmental packages, etc., and the dealer may try adding it to your contract. These extras are where the dealership makes most of their profit. Moreover, finance managers may ask you or even ask you to ask your employer to lie about your income. If you agree you could …

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There are car dealers who are ready to do anything to get your monthly payments as high as possible and make more profit. It is common for car dealers to misquote and inflate monthly payments. For example, they may say a $400 a month car payment for 5 years is a 9% interest rate. In fact, it is not and probably is higher than 9%! It would be a good idea not to trust the car dealers finance manager to calculate the interest rate and monthly payments for you. Also make sure you see everything in writing, including the down payment, the correct amount of money you are borrowing …

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Large volume car dealers claim they save you more money compared to other dealers because they sell more cars than their competitors. They supposedly get cars at a lower cost then pass the savings on to you, the customer. However, the so-called large volume dealers may have larger overhead expenses including higher rent and marketing expenses, higher phone bills, a larger payroll for more employees and so on compared to their smaller volume competitors. Consequently, the so-called large volume dealer may not be able to sell you a car at a lower cost afterall. Moreover, if a lower cost car is sold to you by a dealer that promotes …

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There are car dealers who may promise that they will allow you to drive away in a new car with very few dollars even if you have bad credit or no credit. However, when you enter the dealership and “take the bait” the dealer may inform you it will cost $1000 to drive away in a new car. The “churn” begins when the dealer tells you that you don’t qualify for a loan amount on the car you want and may suggest that you double the amount of income you say you earn when filling out the loan application. This is illegal if you sign off on it but …

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Beware of those car dealers who tell you that you have to sign an arbitration clause. This actually means that in case you have any future problem you must agree to arbitrate with the dealer that warrants legal action. Sometimes the dealer would not even discuss it with you. This clause may be hidden in fine print on the back of the contract you are asked to sign. First of all the arbitrator is supposed to be neutral in any disputes with the car dealer but never always count on this! Simply don’t sign any documents that include arbitration clause. If the dealer tells you that the clause is …

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Do not trust car dealers who will tell you that a credit check is mandatory even if you plan on getting financing elsewhere. Never let the dealer do this because the more times your credit is checked out by anyone it potentially lowers your credit score. If you are not planning to have your vehicle financing arranged at the dealership, don’t give the dealer your social security number and do not let dealership make a copy of your drivers license before you take the test drive. Of course, you will have to show your drivers license but do not let it out of your sight. Always inform the dealer …

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Very often used cars may be wrecked, re-built and then legally re-sold to unsuspecting car buyers. The used car seller can even get a clean title and bill of health and the used car buyer may never know the car had been wrecked and/or “totaled” in an accident! However, you can still find out the car’s true condition if before the purchase you have it inspected by an independent mechanic. The car that has been caught in a flood and later salvaged and cleaned up for re-sale to unsuspecting car buyers is known as a flood car. According to the law the title of a flood car is supposed …

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Usually car buying services advertise they search nationwide to find you the best price available on a vehicle and promise to charge you only a small finder’s fee. It is a good idea to first compare the broker’s price to local dealers in your area. A broker claims to save you money but the most common complaint against brokers is they may help find the best price but this doesn’t mean they can get you the best deal. It is common for brokers to try and add on a service fee on top of the finder’s fee. If you use an auto broker to buy a vehicle you should …

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Car buyers should beware of dealers adding dubious fees like “protection packages” or “dealer prep” especially if they did not even discuss them with the customer when negotiating the vehicle price! Very often customers are paying fees for things that are not necessary. Some of these fees include etching the VIN (vehicle identification number) on the car window, rust proofing, fabric protection and others. The dealer makes profit by offering you services for $1000 or more, while he only pays only $90 for all these services together. You do not need battery and tire protection because they are already built-in to your existing new car warranty and “dealer prep” …

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There are new car dealers selling so-called “certified” used cars who say that there is no way to make absolutely sure that the used cars they sell have not be involved in major collisions and have been re-built to be re-sold to unsuspecting car buyers. However, this is not the truth because if independent car mechanics can easily spot re-built wrecks then so can car dealers! Hundreds of thousands of totaled or completely wrecked vehicles get re-built for re-sale and end up being bought and driven by unsuspecting car buyers. One reason for this is only around half of the motor vehicle departments in all 50 states in United …

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