How To Avoid Auto Dealer Fraud
More and more car buyers become victims of dealer fraud. Every day dealers use new tricks and fraudulent tactics to get car buyers into the deal. However if the car buyer is well informed he/she can for sure avoid most common dealer scams. Here are some tips to use not to become a victim of auto dealer fraud.
Only the Final Written Contract Counts
One of the things that most customers do not notice is that car dealers continue negotiating till the contract is signed. Remember that even if you have clarified all the terms and shaken hands on the deal, the final contract presented to for signing you may be different. Look thoroughly and you may find out that the terms in the contract are different than those you agreed upon during the long period of negotiations.
Many customers are often mistaken by thinking that the Finance and Insurance (F&I) Department of the dealerships deals with the paperwork only. This is not true. First the person in the Finance and Insurance (F&I) Department will persuade you to agree with monthly payment higher than what your credit status requires and then will try to sell you some extras. This could be done during a friendly talk and you will not even notice how these extras are added to the final contract you are signing. (typical auto dealer fraud case)
Be careful not to purchase worthless products such as undercoating, paint sealant, extended warranties, credit and disability insurance and other add-ons.
Study the Written Contract Before You Sign It
Car dealers know that the average customer will not read most of a pre-printed document and they take advantage of this. Because financing is complex and intimidating most customers believe a dealer’s promise to help arrange the financing with a third party lender. Dealers know that car buyers who are exhausted will not read all the fine print themselves and would prefer to hear it explained.
The best way to avoid such auto dealer fraud is not to rush. Demand a copy to take home and read later. Do the calculations yourself. Ask for a time to think it over.
Inspect the Car Carefully
Often defective cars are sold at a tent sale or public auction. People who purchase these cars almost always forget that they haven’t test driven the car. When you intend to purchase a car you should always test drive it and have it checked out by your own mechanic. Do a visual inspection. Check the vehicle for wrinkles or color fading, unevenly worn tires, uneven gaps in the body, paint overspray in the door jambs and other signs of accident or damage. Remember that previously accident damaged and wrecked vehicles lose their value and safety
Do Not Trade-in. Sell Your Old Car Yourself
Dealer will try to confuse you about what you are getting when you trade in your old car at the dealership. If you bargain with a dealer to get a higher price for your trade vehicle you may not realize that the price of the new vehicle you intend to purchase is also being raised. You can get a much higher price by selling your current old vehicle yourself.
Simplify the Transaction
Purchase price, options, down payment, trade-in credit, monthly payment, interest rate, loan term, and balloon payment. These are elements of a car deal that lead car buyers to confusion or auto dealer fraud. There is a chance that customer will focus on some of them and will miss the others. Distraction is an art that many car salesmen study diligently. Many car buyers have become a victim of dealer fraud by focusing on just monthly payments. To simplify the transaction separately handle your financing and trade car.
Financing is More Expensive at the Dealership
Avoid financing your car at the dealership and your car loan directly with your own lender. Before going to the dealership investigate the current rates and order a credit report to know your credit pictures.
Dealers earn more money on the financing that is why the dealer almost always tries to get you pay higher rate than the lender.
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