Top 6 Scenarios of Auto Dealer Fraud

Top 6 Scenarios of Auto Dealer Fraud

Are you planning to purchase a car? Most importantly, you should be aware that the process of buying a car can be complicated at times. As a matter of fact, a lot of consumers face auto dealer frauds on a daily basis. Unfortunately, not all car dealers are honest. Some of them can use a lot of deceptive practices to make more money. If you want to avoid such scams, have a look at 6 scenarios of auto dealer fraud:

Advertising Bait and Switch

You should be careful not to believe in fake advertisements that may offer you very cheap cars. In most cases, dealerships are using this method to attract potential consumers.  Later, you find out all of a sudden that these vehicles are no longer available because they are sold out. Thus, car dealers will attempt to persuade you to buy other cars that are quite expensive.

If you come across advertisements that sound too good to be true, probably you are dealing with a bait and switch auto dealer fraud. Thus, you should ensure that they are not fake. Don’t be lazy to call the dealership to clarify the information concerning the car. For instance, you can ask for the vehicle identification number (also known as VIN) of the car.  

Packing the contract

There are certain car dealers who cheat car shoppers by ‘’packing’’ a contract with add-ons that they did not ask for. Warranties, options, and different accessories are common examples of these add-ons. It is essential to warn you to explore your contract thoroughly before signing it. If you notice certain items that you do not authorize, inform your car dealer that you are not willing to pay extra money for it.

Financing Fraud

This is a widely spread trick that a lot of dealerships use effectively to trap car shoppers.  They can tell lies concerning your credit score and convince you that your credit score is very low.  Many of them succeed in persuading car shoppers that they are not qualified for a low-interest rate and offer them “a great deal”. As a result, you may end up paying high-interest rates. The wisest decision will be getting a copy of your credit report. It also includes data related to your credit score.

Trade-in Fraud

Here is a typical scenario of trade-in auto dealer fraud. You want to trade in your old vehicle. So, you turn to a car dealer who traps you by not mentioning the true value of your car. In other words, you get very little money for your car that is worth a greater sum of money. In many cases, a car dealer may succeed in selling the same car for a huge amount of money. So, keep in mind that you should be armed with all the necessary information about your car’s market value.

Co-signer scam

In some cases, a car shopper doesn’t qualify for his/her own financing and someone needs to co-sign. If you have appeared in such a situation, be careful not to be fooled by ‘’helpful’’ car dealers. They can constantly and confidently insist that you are only taking this step to help your friend. Furthermore, they may assure that you have no other responsibility, you are signing as a reference and that’s all. This is definitely not true. You will have to to pay the money if the primary buyer fails to make the necessary payments.

Buy-Lease Switch

Before discussing this auto dealer fraud, let’s understand the difference between buying and leasing a car. In fact, when you buy a car, you make a one-time paying and become the owner of the vehicle. In the case of leasing, you have to pay a certain amount of money on a monthly basis (during the lease period).  Sometimes salespeople may make you believe that you are buying a car when in reality you are leasing. Certain scammers can also tell you that you are going to own the car at the end of the lease period (but it is not true). To own the car, you must pay a considerable sum of money at the end of the lease period. Don’t forget to observe the contract properly not to have unpleasant surprises later.

Consider hiring a skilled lawyer to protect your rights, if you have become a victim of such auto dealer frauds.