Monthly Archives: October 2009

Title fraud is on the rise because of the current recession and is often the result of poor business management on the dealer’s part. It mostly happens when dealers on the verge of bankruptcy, without enough money to keep operations going, can’t pay off the liens on titles for the vehicles they’ve purchased and sold. Surprisingly, a lot of car dealers don’t technically own the vehicles they sell. They borrow money from financiers, called “flooring agents,” to pay for them. Once a dealer sells a car paid for by a flooring agent, he or she is supposed to pay off the agent to get the title — or clear …

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Rewritten Contract/Backdating A customer often won’t qualify for financing under the terms of the first purchase contract and may be required to increase a down payment, APR, etc. to qualify for a loan. Then the dealership has the customer sign a second contract with the new terms but backdates it with the date of the first contract, sticking the customer with financing charges for a period during which the contract wasn’t yet in effect. In addition to misrepresenting when the customer takes the obligation of the new contract, a backdated contract often violates the single document rule because another form, usually called “Acknowledgment of the Rewritten Contract,” has the …

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In our previous blogs we have already presented some tricky questions that may lead to dealer fraud. Below are three more questions and the most preferable ways of answering them in order to avoid becoming a dealer fraud victim. 1. “What were you hoping to get for your trade?” This may be an honest question, but why tell the price first? If you say you want $10,000 and the car is really worth $12,000, you’ll give the dealer a $2,000 present. It’s essential to have a realistic idea of what your trade-in is worth and let the dealer throw out the first number. Don’t get confused in case he/she …

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There are a significant number of cases in which dealers represent to consumers that a car was not previously wrecked.  The consumer then buys it based on the representation.  Naturally, mechanical problems occur, and the consumer takes the car in for repairs.  Only then does the consumer learn of the prior wreck. To avoid this situation, you should pay attention to the following: Carfax or Autocheck Reports – Dealers normally run reports from Carfax and/or Autocheck to determine whether either of those databases lists any prior wreck of or damage to a vehicle they intend to sell.  An honest dealer would pass on the reports if they indicate prior …

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Car dealers usually ask key questions for diverting your attention and maximizing their profit. Knowing these questions and refusing to take the bait will help you stay in control of the negotiations and get the best deal. Below are some of these tricky questions and the best ways of answering them and thus avoiding various dealer tricks. 1. “What kind of monthly payment are you looking for?” In some cases, this question doesn’t presuppose any upcoming vehicle scam. If you’re looking to buy a $50,000 car on a budget of $300 per month with a $1,000 down payment and no trade-in, the dealer will know right away that you’re …

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Payment packing is one of the most common of the car buying scams. It is the act of presenting much more inflated monthly car loan payments to customers during negotiations. This act actually becomes illegal once: A credit report has been obtained The sale price has been disclosed The term of the loan has been disclosed The finance rate has been disclosed. How to avoid payment packing? All the tricky games may easily be avoided by asking them to: Disclose the sale price Disclose the total amount financed Disclose the term Disclose the estimated finance rate By having car dealers disclose all of this upfront, they have to give …

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Buying a car means that you will own the vehicle when you finish making payments on it. Leasing means that there is a period of time – the lease period – when you’ll be making monthly payments on the car and at the end of the lease period you will not own the car (unless you make a large payment to own it). Plus, if you want to return the car before the lease period is over, you’ll have to pay a big penalty (an “early-termination fee”) to do that. Customers routinely fall into auto scam when car dealers lead you to believe that you are purchasing when you …

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Most people hate going car shopping because they have heard so much about the innumerable car dealer scams. In this blog you may learn about some seemingly innocent, but rather witty dealer scams. Today Only Price Car Dealer Scam This car dealer scam works till you are at the car dealer, but have not bought a new car yet. The dealer will give you a great price and will tell you that the price is only good until the end of the day. This car dealer scam will make you think it is a great deal and end up buying the car without checking what other car dealers have …

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Title washing is used by car dealers for “washing” the vehicle’s bad history in order to conceal from the buyer that it had a salvage title because of severe accident, flood or other damage. Title washing incidents reached their outbreak after hurricane Katrina when many car dealers got stuck with excess of flood-damaged vehicles.  Title washing is also applied to “clipped” vehicles with the back and front coming from different cars, or rather of what was left of them after a crash. So, a wreck is sold at the price of a good car. Title washing scam results from the lack of a unified law regulating vehicle documentation in …

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When buying a new car, people most frequently turn to car dealers as to the most knowledgeable and trustworthy people to buy a car from. However this is not always the case. Some car dealers are simply dishonest and use really mean scams for tricking you. So one should be extremely cautious to avoid becoming a dealer fraud victim. Today we will discuss the The Payoff  Your Loan Scam and try to reveal the related  dealer tricks. This is when the dealer offers to pay off the balance of your current car loan no matter how much money you still owe. It is a common sales strategy. When the …

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