The Credit Check Scam In The Car Business

By: teahupoo
The car business is probably one of the only businesses left where sleazy sales tactics are still rampant. I know time share and siding salespeople are bad too. But it isn't on near the scale as the car business is.

One of the bigger control scams out there now is the credit check scam, which starts just about as soon as you sit down at a desk with the salesman. It typically begins like this, they begin to fill out an offer form and then they will ask you for a deposit to show that you are serious about buying the vehicle. This line is used at just about every dealership and in many dealerships they will not even allow the salesman to do any kind of negotiation without a deposit.

So what is the purpose of the deposit? You may think that you are giving then a check in agreement to buy at a certain figure but to them it is just another means of control. And the thing about it is they aren't shy about how much they ask for. They used to ask for a $50 deposit now they ask for $3,000 or $4,000! Even though this is a slick trick and they may even call it an initial investment it isn't the worst thing they are going to try to pull.

The next slick little trick is for the salesperson to ask for you driver's license and social security number and take down some information like your address and phone number, Now they have a little surprise for you, they are pulling what is called a 5-liner or short form credit report without you knowing and they use this to help figure out how much they can get away with charging you and still get it financed. Afterwards what the dealerships generally do is fill out credit applications in your name and fax them to several different lenders to see who they can get the best rate from. Again, they are doing all of this without your knowledge. What is the big deal you may ask? Every time your credit report is pulled it lowers your credit score and will cause you to pay higher interest rates.

It should be illegal but so far it isn't. With all the changes in privacy laws and similar consumer credit laws it shouldn't be long before this practice is outlawed.
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