Buying Used Cars - Top 10 Dealership Scams

By: Andy Mcdowell

Top 5 Dealership Scams:

1. The VIN# window etching scam

Basically a dealer will charge you $300-$900 for window etchingand they will tell you that you have to pay the money to get theloan because the banks insists on it.

Some dealers might tell you that the etching is free but willadd on the etch money to your monthly payments to make up for it.

The best way to avoid this scam is to force the dealer to put itin writing if they say that the etching is free or simply etchthe car yourself.

Remember a lender doesn't require that you purchase any extrason a car. All the lender cares about is that you can make yourpayments on time regularly. Don't buy into it.

2. The Financing Scam

I have mentioned this before already, but here it is in moredetail.

Basically you trade in your old car and the finance managertells you that your interest rate is good and then gives you thecar.

After a week or two passes you get the call from him that youdidn't qualify for the interest rates that they gave you uponmaking the deal.

Every new purchase has a clause in the contract that usuallystates that the deal is "subject to loan approval."

This gives the finance manager a loop hole in getting more moneyout of you.

All that this means in the contract is that the deal is notfinished yet even you already have possession of the car andhave signed the contract.

The dealer can then charge you $1000 more in finance fees and upyour monthly payments by $50.

This scam is generally pulled on people with bad credit becauseit is more plausible.

If you are wondering why they would sell you the car at 6% APRif they knew you had bad credit (remember they ran the creditsearch already) the answer is simple; to sell the car.

You can avoid this scam by not financing the car with the dealerif you know that you have bad credit.

You are better off going to a credit union and financing the caryourself. When you buy a new car the deal should be made on theprice of the car, not on the monthly payments.

3. The Credit Score Scam

This scam is ridiculous at best. This is when the financemanager tells you that your credit score is lower than it reallyis so that they can get you for higher interest rates.

This scam is pulled on everyone; good or bad credit.

This scam is easy to avoid. Just get your own copy of yourcredit report from Equifax.com, and bring it with you.

It is really difficult to lie to you about your credit score ifyou have your own copy of it. If your paper and theirs doesn'tsay the same thing, go somewhere else because that dealership islying to you.

Don't forget to let them know it too because it'll be nice towatch them squirm.

4. The Forced Warranty Scam

This is when the finance manager tells you that you are noteligible for the loan by the bank unless you pay an extra $2000for a 2-3 year extended warranty.

This scam just doesn't make sense. Basically the finance manageris telling you that the bank won't trust you to pay the $20,000loan for the car, but they will trust you if you pay even moremoney. That's just stupid.

You can avoid this scam if you can force them to put it inwriting that you "have" to pay the extended warranty in order toget the loan.

That way you can bring a copy of the contract to your localState's Attorney's office to verify that the deal is valid. Ican bet that the finance manager will change his tune prettyquickly.

5. The Dealer Prep Scam

Let me first let you know that cost is not only legal but verymuch common practice. I still refer to it as a scam because itis just another way for you to end up paying more money for thecar.

Basically the dealer will tell you have to an extra $500 tocover the labor costs of the dealership's 5-point inspection.

You are paying for the time it took for the dealership to makesure that the car wouldn't explode on you in the first week ofowning it.

This check up that you are paying so much money for is for thedealership to remove plastic from the seats etc, vacuum the carout, and making sure that all of the fuses and fluids are readyto go.

When factories deliver the new cars to the dealerships the costof delivery and prep is already covered, so basically you arepaying the dealership for work that they haven't really done.

I swear they could get the car in perfectly ready to drivecondition and put everything right back in it just so that theycan make you pay the fee again.

You can avoid this scam by simply asking the dealership to addan extra $500 credit to the deal to make sure you do not have topay the money.

If they refuse, you can then decide if the car is worth themoney. If it is fine; buy the car, if not; go to another dealerthat will remove the dealer prep costs.

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