3 Most Common Car Scams While Buying or Selling
It is true that nowadays any person can become a victim of car scams. In fact, not all car dealerships are conducting their businesses honestly and in a professional way. Some of them can use such dirty tricks and make a lot of money in this way. If you have appeared in such a situation, you can report the incident to the National Consumers League.
Being properly educated is the key to protecting yourself from car scams. Better awareness of the car dealers’ deceitful practices will help you approach the negotiation table with confidence. Thus, you can detect these scams and prevent them effectively. Take a look at 3 of the most common car scams.
Dealer addendum car scam
When you visit a car dealer’s lot, you will notice vehicles with dealer addendum stickers. These stickers are used for showing the list of items that usually cost an extra sum of money. Among these items can be paint sealant, fabric protection, and other accessories. As a matter of fact, this is a popular car scam which aims to add the price of the car. In other words, it is an effective way for dishonest dealers to make large profits for providing ‘’ additional features.”
Sometimes, during the process of negotiations, dealers may agree to remove the sticker. You may think that they do it as a sign of goodwill. But the reality may be different. In most cases, you have simply negotiated down to the real price of the sticker. A good piece of advice in this situation is that you should use invoice price as the starting point when negotiating.
Actually, a dealer addendum sticker is justifiable when it is typical of some cars. But when you see that all the cars in the dealer’s lot have the label, it is an obvious sign of the dealer addendum car scam.
Low payment car scam
Are you a car shopper, who is eager to pay on a monthly installment? Be careful, because dealers may try to trap you. They usually do this by increasing the cost of the down payment, as well as extending the payment period. If you fail to detect this scam, you may end up wasting your financial means because of high-interest rates.
Here is a typical example of this scam. You have already succeeded in making a deal and at last, your dream car is yours. However, a few days later when all the papers are signed, you receive a call from the dealership. They inform you that there is an ‘’effective way ‘’ for lowering the amount of the monthly payment. So, when you return to the dealership, you get a very ‘’profitable offer’’. Unfortunately, it is profitable for them, not for you. The dealer lets you know that you should re-sign the papers. Furthermore, the scammer may assure you that in this case will make lower payments per month. But the reality is that they have rolled you into a new loan. Maybe the payment is lower, but the period of time for paying the loan is longer and interest rates are higher.
How to avoid becoming the victim of the low payment car scams? To prevent this scam, it is essential for you to have a clear idea about the following:
- Price of the car
- Interest rates
- Loan term
- Down payment
You have the option of using car loan calculators that will assist you greatly to make a wise decision. Your awareness of these financial issues will guarantee your protection from unscrupulous dealers.
The Spot Delivery Car Scams
Very frequently car dealers will allow you to have your vehicle when the loan agreement isn’t completed. What is the reason? Actually, dealerships take this step, because they don’t want to give you the opportunity of reconsidering the deal. So, scammers think if the buyer already has the car in his/her possession, most probably he/she won’t return it. This means that spot delivery makes car shoppers vulnerable and deceitful dealers take this advantage to make money.
After a short period of time, the dealer may contact you and inform that they didn’t succeed in finding financing for you. The scammer will offer you choosing between these two options:
- Making a higher down payment.
- Returning the car back and as a result, dealing with legal problems concerning the use of the car.
Another common trick of dealers is convincing buyers to sign the paperwork that gives them the right of rescission. If you have made this mistake, then you are in a huge trouble. This means that the dealer can alter the terms of the agreement without informing you about it. It can be really dangerous, as you can appear in a very unpleasant situation. The best way of preventing this car scam is not agreeing to spot delivery if financial issues aren’t solved. Also, avoid signing any paper without reading it properly.
In conclusion, the awareness of the most common car scams will help you stay away from dishonest dealerships. But if you think that you have become car scammers’ victim, consider hiring a professional attorney that will fight for your rights.