Newest Car Dealer Scams

Newest Car Dealer Scams

When dealing with car dealers, you, as a potential car buyer need to be very careful in order not to become a victim of car dealer fraud.  Here are two of the newest car dealer scams you should learn about.

Spot Delivery

The scenario of this scam is as follows.  When you decide which car you are going to buy and are ready to fill out all the paperwork, the car dealer tells you that your loan hasn’t been “officially” approved yet, but you can drive the car home. You are satisfied with the dealer’s proposal and drive the car home without thinking about possible consequences.

A few days later the car dealership will contact you to tell that your loan was approved at a higher rate. This means that you’ll have to pay thousands of dollars more than you expected.

You cannot call off the deal since the dealer will either tell you that they’ll sue you if you don’t agree to the new terms or that they have already sold your trade-in. So before taking your new car home from the car dealer think twice!

Mandatory Arbitration or Conflict Resolution

The scenario of this scam is as follows. After everything has been agreed to, the dealer asks you to sign a “Dispute Resolution” or “Conflict Resolution” agreement. The dealer tells you that according to what you just signed whenever a problem occurs, you agree to settle it through arbitration and not take the car dealer to court.

Although arbitration can be a reasonable option, the fine print is where the problem lies.

The agreement may state that the car dealer has the right to choose the arbiter and/or that you have to pay the entire arbitration fee regardless of who wins or that you can’t participate in any class-action lawsuits against the dealership.

So before signing anything, make sure you have read arbitration agreements. Before looking at the cars ask the car dealer whether or not an arbitration agreement is mandatory. If a dispute resolution agreement is required, check out the fine print first!

For more advice on how to avoid newest car dealer scams, keep following our blog updates and feel free to turn to California dealer fraud attorney for further consultation and help.