Car Buying Scams
Purchasing a new automobile is hard enough without having to
deal with the sales pressure from a car salesman. It’s no big
secret that almost every car dealership can be talked down on
the initial price they want for a car. The key is to know what
scams to watch out for in order to maximize your hard earned
dollar. This article details a few sales tactics that you may
want to be on the lookout for the next time you purchase a new
automobile.
The first money wasting scam deals with etching the vehicle’s
VIN# on the window. In some cases a dealership will try to make
you pay for this added feature. Please don’t fall for this
trick. No lender will require you to pay for any extra options
that you don’t require. To be honest all they really care about
is whether or not your payments are on time.
Be on the look out for the phrase “subject to loan approval”.
Almost every car loan will have this phrase in it and trust me
when I say that some dealerships will try and exploit you out of
more money using this phrase as the reason why. This scam is
usually pulled on consumers that may have bad credit so if your
credit score is good you shouldn’t have to worry about being
taken advantage of by the dealership. The bad news is for those
that are taken advantage of it usually means upwards of $1000
more in finance fees and an additional $50 a month added to your
car payment. One way to avoid this scam is to finance the car
through your own bank or credit union.
The most abused scam is the credit score scam. This is where the
car dealership tells you that your credit score is lower then
what it actually is in order to charge you a higher finance rate
on your car loan. No one is immune to this scam because the
dealership doesn’t care if you have good or bad credit when they
attempt to con you. The best way to deal with this greediness is
to bring a copy of your credit score with you when you go
looking to buy a new car. That way there is no confusion as to
what your credit score truly is.
Another favorite scam is the forced warranty scam where the auto
dealership will insist that in order to qualify for the car loan
you will need to purchase a $2000 2 or 3 year warranty. The
bottom line upfront is that it’s hogwash and you don’t need the
warranty.
Here’s a good scam that I’m sure you’ve seen often. It’s called
the dealer prep scam. Yes that’s right I’m talking about that
extra $500 that seems to appear on your contract to compensate
the dealer for basically doing nothing since the car arrives in
the dealership ready to be driven off the car lot to a
prospective buyer. Try an avoid paying this if you can otherwise
find a dealer that will knock this ridiculous charge off of the
contract.
The dealer markup fee is another phony fee that is made up just
to pad the car dealership’s profit margin. This is an
unnecessary fee that the dealer charges for no reason other than
greed. This fee can be seen on the orange sticker marked on the
manufacturer’s suggested retail price (MSRP). These are just a
few of the many scams that can surface from time to time when
you are attempting to buy a new car. Although these practices to
go on there are many trustworthy car dealerships that can and
will sale you a car for the right amount of money allowing you
to purchase the car without getting ripped off and still allow
the dealership the opportunity to make the compensation they
deserve for their efforts. The trick is to find that dealership.
Best of luck to you.
