Car dealers are
often portrayed as predators just waiting for an unsuspecting
customer to come along. This is because many people believe that they
are always on the prowl for unsuspecting buyers that are not very
knowledgeable about cars. This can be unfair because we can argue
that there are Car
Dealers
out there who would not cheat just to get an extra profit.
To avoid
becoming a victim of sneaky car dealers, look at the following auto
financing scams.
How do you tell the
difference?
Yoyo scam
You will be allowed by the
dealer to bring the car home as soon as possible. The dealer will
take care of the financing, a few days later he will contact you
again and tell you that there was a problem with your financing plan.
He will tell you to set up a new financing scheme through him which,
of course, will be at a higher cost and this will also entail a very
high profit on the dealer's part.
Be wary of this trick and
avoid it at all costs if you detect it. If you have a bad credit
standing, don't have your financing done by the dealer and make
arrangements for your own financing. If you ever do avail of the
dealer's financing, you should never drive the car back to your home
immediately. Wait for at least 24 hours just to make sure that the
processing of your financing scheme has been completed already. By
allowing 1 whole day to pass by, you are assured that the dealer
cannot use this scam on you.
Window etching trick
Window etching is a very
common scam. What the dealer will do is to offer to etch the VIN
number of your car onto the window of the car for a price. Basically,
the price ranges from as low as $300 to as high as $1,000. Some
buyers think that they did a good job by being able to talk down the
price to a few hundred dollars, but unfortunately for them, a few
hundred dollars is still a good amount of money. The best way to
avoid this kind of scam is for you to buy an etching kit that you can
do on your own. This is available in most auto shops and costs around
$20. See how much they profit from you
Preparation fees
For preparing your car, the
dealer will often add an additional preparation fee to your bill.
Just to conduct a test drive, replace fuses, or take the car's
plastic cover off will have your bill increasing by at least $500 If
you visit other shops, you can get the information that these add on
costs are already included in the MSRP as set by the manufacturer.
Some dealers automatically add it to the buyer's order to make it
look mandatory. To take care of this scam, you can ask the dealer to
classify it as credit (it should be identical to the amount of the
preparation fee) on the following line. If the dealer does not agree
to this, you can just simply walk away from the dealership.
Market adjustment
The dealer will convince you
that the vehicle you want is selling like hot cakes and very popular.
In order to sell you the vehicle, they will do some "market
adjustments" amounting to a few thousand dollars. This is
usually indicated by a tag near the MSRP tag set by the manufacturer.
Even if the car you want is very popular and is very much in demand,
if it is in stock you should not be tempted because getting a
"popular" car is not worth it if you have to pay a few
thousand dollars more. You should never pay more than the MSRP set by
the manufacturers. If you do, then you are allowing others to take
advantage of you.
Warranty extension
Although this type of scam
is old already, it is still being used and there are many who fall
for this trick. What happens in this kind of scam is that when you
make a loan for the car, the dealer will tell you that you are
required to purchase an extended warranty because it is one of the
conditions of the bank. There is a simple way of avoiding this scam.
Ask the dealer to specify clearly in writing that the extended
warranty is required for the loan to be approved. The dealer will
most probably find a way to have it excluded. If he persists in
including the extended warranty, do not do business with this guy and
go to other dealerships.
These are some of the most
common auto financing scams that are utilized by some car dealers.
Always keep these in mind if you are going to buy a car. If you or a
friend were treated fairly by a dealer in the past, consider using
the same dealership again. It's a good indication that they do care
about their customers and aren't just looking for a "fast buck."
Think very carefully and do
not buy on impulse. Good luck to you and go get that car.
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