Generally, most car buyers are well aware of common dealer tricks and dealership scams. However, there are car buyers who are less experienced and can easily fall for commonly used dealer tactics and dealership mark-ups.
Remember that when selling a new or used car, the car dealer makes profit in two ways. First they profit from the sale of the vehicle itself, and second, from the interest paid by the buyer. One thing that you should keep in mind when you intend to buy a vehicle is that the dealer will, most probably, try to trick you into paying as much for the car as possible.
Dealership Mark-Ups is one of the tricks most commonly used by the dealers. Usually, car dealerships are in a tight relationship with certain finance companies and try to encourage their customers to use that specific finance company. Car buyers can avoid this auto scam if they secure their own financing with a bank or credit union rather than through a dealership. Dealerships make profit from the interest paid as the finance company of the dealer may increase the loan rate by a few points and the dealership receives the difference you have paid.
The car buyer can easily avoid the dealership mark-ups fraud by comparing auto loan lenders. Do not accept the first loan packaged offered, and never accept dealership financing. First shop around and find the deal that is the best for you.