Common Car Dealer Scams
If you ever tried to buy a car from a car lot, you probably know that it's not easy at all. Salesmen are there to make money, and dealers of both new and used cars want to make a profit at any cost. To do this, they've come up with some unethical ways to boost their bottom line. Here are some of the most common car dealer scams and how to avoid them.
It's All That- and More!
You see a tempting ad for just the car you want, and decide to pounce on the deal before it goes away. You beat a path to the dealer, and march up to the nearest salesman ready to buy- only to find out that they "just sold the last one". When you complain, they'll show you the fine print in the ad where the particular car's stock number is- and then try to sell you a "similar car for just a little more". It's bait and switch at its finest, and you shouldn't fall for it. Stick with dealers that offer competitive prices on ALL their cars.
We'll Take Your Credit Application no Matter What!
Of course they do- but application acceptance does not guarantee approval. Before you shop for a car, check with online lenders. Once you get approved for a loan, take that approval to a lender who will then be out of excuses as to why your application cannot be approved.
Pulling the Rug out From Under You
You try the new car out over night or over the weekend, leaving your current vehicle as collateral. When the test drive is up, your old car has been sold, leaving you with no choice but to get the new car no matter the price. Don't leave your car as collateral, ever.
Your Credit Isn't Sufficient
Some dealers will lead you to believe that your credit is abysmal, in order to get you to pay higher interest. To combat this, get a copy of your credit report and score beforehand.
One Single Transaction
Some car dealers try to get you to see the price, trade value and financing as one single transaction. It is in your best interest to negotiate each of these individually.
The Payment
That ultra-low car payment may sound good, but it will probably come with an astronomical down payment or a too-long loan term.
The Sticker Price
Use the MSRP (manufacturer's suggested retail price) as your jump-off point.
No More Holdbacks
The dealer is typically given an incentive by the car maker for pushing the slower-selling vehicles. Most car dealers won't tell you this, so you have to ask. Don't forget to ask what kind of warranty the car comes with, because they won't always volunteer this information, either.
No Financing
Don't fall for it if the dealer calls you post-sale to tell you that your financing did not pan out.
A Long Loan
Auto dealers may be willing to offer you a six-year loan, which will look good because of the low monthly payment, but there is a strong likelihood that your car will break down before the end of the loan term.