Top Dealer Scams
Do not be in a hurry to sign the deal as there is a chance that a good finance salesperson will nail you for $3,000 – $4,000 more dollars. This can be hidden in your contract if you do not keep your guard up. It is important to learn to say NO to anything they try to up sell you on. Read the contract very carefully to make sure the numbers are exactly what you agreed upon. There are many little car dealer scams that can occur in the finance office, but the most common today is the Subject to financing scam.
Most of the consumers sign the contracts without reading it thoroughly. Later when they get home and thoroughly look through the paperwork they find items they didn’t want or loan rates that are higher, the length of the loan has been extended etc. Keep in mind that once you sign the contracts you are stuck. You already signed a form that stated that you read and understood all the items in the contract. So the best thing to do to avoid fraud is to take your time and read everything. If you are not good at reading contracts bring someone with you that can. Never take the Finance salespersons word for anything!
The Subject to Financing clause scam
This is one of the top dealer scams finance salespeople use. If you see this clause on the contract simply do not sign it. Another common term is Subject To Loan Approval. What usually happens here is several days after you drive home with your car, you receive a phone call from the salesperson that your loan fell through and you need to come back in and resign through another lender for more money. The dealer may say “we have great news, we got you a lower payment”. However, all they have done has increased the length of your loan. They do this more often with bad credit or sub prime buyers who are usually more cooperative. This occurs quite often on weekends when the lenders are closed. Just tell the finance salesperson you will come back Monday after we have a confirmed approval.
If they don’t have your loan approved, stand up and tell him that you will come back and sign when you have an approved loan with a payment book. Never sign a contract without knowing your lender, interest rate, length of loan and monthly payment. Once you sign and drive home with your new car you are at their mercy and you will end up paying more.