Two Trade-in Auto Scams to Avoid
Trading in an old car to help you finance a new one may be a great option. However, some dealers are prone to cheating car shoppers. Hence, the following are two trade-in auto scams that you should be aware of in order to avoid becoming a victim of them.
Let us first understand what trading-in means. Trading in a vehicle is a nice way of financing a portion of a new vehicle’s purchase price. Besides, trading in a vehicle is time-saving as compared to selling a vehicle privately. Nevertheless, there are scams you should be aware of.
Trade-in Auto Scam N1
Here the dealer does not inform the buyer how the trade-in value will impact the actual purchase price of the new car. For example, the dealer will offer quite a high price for the trade-in vehicle. But at the same time he continues increasing the price of the new car.
In this case, the purchaser will end up paying more money for the new vehicle, even though they got more for their traded-in car. It appears that the consumer does not benefit from this offer at all. Since nobody informs them that their trade-in of the old vehicle will increase the price of the new vehicle.
Trade-in Auto Scam N2
Another trade-in auto fraud’s scenario may occur when the purchaser trades in a vehicle that is not paid fully yet. In this case, the dealer may offer the purchaser a trade-in, shifting the balance of the loan on to the cost of the new vehicle. This practice is not fraudulent in itself as long as the dealer informs the buyer about it. However, if the dealer practices this without proper disclosure, then it can already be considered an auto scam.
One thing to avoid becoming a victim of such trade-in auto scams is being an educated buyer. Know what the trade-in value of your car is BEFORE entering the dealership. Do some preliminary research before you decide to trade-in your old car.