4 Most Common Dealer Fraud Types

car dealer fraud

Purchasing a vehicle is the second largest item most people purchase. So when making such an investment one wants to get a vehicle that is worth the price paid. The vehicle should be safe for the owner, his/her family and for all those on the road. Cases of auto dealer scams are widespread  all over the USA today. As a result, consumers suffer in the hands of dishonest businesses, lose a great portion of their savings and end up with an unsafe vehicle. Fortunately, you can prevent dealer fraud with little research and attention to the vehicle purchasing process. If is important to be familiar with the following types of dealer scams:

Deceptive Advertising

One of the most common types of scams included in auto dealer fraud is deceptive advertising about car price. Local media advertise the vehicle  at a low price, but when the potential customer wants to take a tempting offer he is told that the deal is no longer available. Instead, he get an offer  to purchase another vehicle at a higher price. It must be admitted that an inexperienced customer can swallow such kind of bait.

Spot Delivery or Yo-Yo Deal

Another widespread dealer fraud is  “Spot Deliver” or “Yo-Yo Deal”. Auto dealer assures consumer with a low credit score to take the car home right now. Few days or weeks later dealer calls back to the «happy» customer and informs that his terms were not approved. Thus he must go back to the dealership to re-write the contract. As a rule, it ends up paying the much higher interest rate and monthly payment. You can learn about Yo-Yo financing by reading our article BEWARE OF SPOT DELIVERY OR YO-YO FINANCING SCAM.

“Mandatory” Options and Add-ons

When the customer has already chosen the vehicle and negotiated a price, he relaxes and often becomes a desirable target for the car dealer. They won’t lose a chance to sell overpriced add-ons such as extended warranties, insurance policies, service contracts etc. Suggestions like “it will cost only $10 dollars more per month” may sound very attractive. But taking on added services or equipment can result in costing the customer few thousands more than he initially planned to pay for that new vehicle. Many consumers erroneously suppose that the price of the car include all these policies and the vehicle can’t be sold without them. In order not to fall to dealer’s trap, the customer should review each product independently, make sure if it is really useful and only after that give his consent to extra payments.

Previous Accident or Salvage Title Non-disclosure

Fraudulent car dealers may offer customers salvaged or wrecked vehicles which are hazardous or unfit to drive. The trick is that they don’t disclose that the car has incurred significant damage as a result of accidents or floods. As a rule, their appearance is good, but the problems are hidden inside. Future car owners can come across problems with engine or steering, poorly welded parts, defective brakes etc. The damaged car can easily be detected through inspection. Such defects as dirt or mud under the mat, watermarks inside the doors, moisture in the hood, trunk or under the seats indicate that the car was damaged by a flood.

Odometer rollback, misrepresentation of the vehicle history, auto financing scams and many others are listed among other types of dealer fraud. Dealer scams are many and varied. But the way out of the situation for the consumers who suffered from fraudulent actions of auto dealers is one – to contact the lawyer and protect his rights in the court.

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