Most Car dealers are thought of as sharks lurking for an unsuspecting customer to come along. This is because many people believe they have been taken by car dealer financing scams. Not all dealers are out there looking to take advantage of car buyers. However there are plenty that will if you are not knowledgeable of car dealer scams and don’t forget about the car buying fees.
Some Common Car Dealer Financing Scams
The Yo Yo Car Dealer Financing Scam
The car dealer lets you take the car immediately. The car dealer says they handle the financing, a few days later when gets caught up and that they will contact you if there is any problem with your financing. He will then contact you a couple days later and set you up a new car dealer financing contract which will be at a higher cost that includes a very tidy profit for the dealer.
Beware of Car Dealer Financing Scams
Be cautious of this car dealer financing scam. If for some reason you don’t have great credit don’t finance your car with the dealer and make arrangements for your own financing. Check with your local bank or credit union. You can also consider other online sources for financing your new car.
If there is some reason that there should be a question about your credit and financing don’t take delivery on the car. Wait for a day or two for the dealer to get your credit approved. By waiting a day or two for your loan to be approved you should be able to avoid this car scam.
Window Etching Car Dealer Financing Scams
Including car window etching is a very common car scam, the dealer will etch the VIN number of your car onto the window of the car for a price that they include in your car dealer financing. I have seen prices range from $250 to $800. Some unsuspecting car buyers think that they got a good deal by negotiating the price down to a few hundred dollars, but this is still a car dealer scam. To avoid this car scam take a pass on the car window etching. If this is a product or service you really want it can be done at many auto shops for under $50. Don’t let them add this too your car financing contract.
Dealer Prep Fees Car Financing Scams
Some car dealers will add an additional dealer prep fee and other car dealer fees to your car dealer financing contract. The only prep that they do is to take the car for a test drive, install fuses and take the plastic cover off. Then they will add several hundred dollars to the price for dealer prep. The worst part of this car dealer scam is that these costs are already included in the M.S.R.P. determined by the manufacturer. There are some car dealers that add it to the buyer’s order to make it look like it is a standard practice. To avoid this car scam look at the window sticker of the car you are going to purchase and it will state the dealer prep charges are already included. If the dealer adds on a dealer prep fee ask them to take it off the order or walk away from the car dealership.
Extended Warranty Car Dealership Financing Scams
One of the oldest car dealer financing scams is to include an extended warranty for your new car in the financing paperwork. The car dealer is doing the paperwork for your car loan they will tell you that you are required to purchase an extended warranty because it is one of the stipulations of the lender. You should know that there is no such condition or stipulation for any car loan. If the dealer persists in including the extended warranty, go to another dealer. This is just another of the car dealer scams to avoid.
That was only four of the most common car dealership financing scams that used by some car dealers, there are others. Just remember, if you are going to buy a new car and you had a good car dealer experience in the past, consider going there again. Anytime time you buy a car and get car dealer financing be sure to read and calculate every line on the paperwork. Once you sign on the line it is a contract. Don’t forget about the car buying fees and car dealer tricks so they can get your money.
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- Car Dealer Scams to Protect Yourself
HELLO, I WOULD APPRECIATE IF YOU COULD ANSWER SOME QUESTIONS FOR ME BECAUSE I THINK THAT I HAVE BEEN A VICTIM OF A CAR SCAM AND IF SO WHERE WHAT CAN I DO? THIS IS MY SITUATION AS FOLLOWS…….
HELLO, I JUST A BOUGHT USED CAR FROM A DEALER AND THE NUMBERS ON MY CONTRACT DID NOT ADD UP TO WHAT IT WAS SUPPOSED TO BE. THE CAR WAS ADVERTISED FOR $5995.00 AND OF COURSE THERE IS THE LIC.,REG.,($63.50) AND THE TAGS & DOC. FEE ($86.50) AND I ALSO HAVE AN EXTENDED WARRANTY WHICH IS $1095.00. AND THE TAXES CAME TO $669.42 NOW MY TOTAL IS $7272.28 WITH $1800.00 DOWN.
I SPOKE TO THE CAR DEALER AND HE STATED THAT THE BANK CHARGE ME ABOUT $1200.00 BECAUSE OF MY BANKRUPTCY ON MY CREDIT.
MY QUESTION WOULD BE CAN THE BANK AND THE DEALER DO THAT? THE EXTRA CHARGE IS INCLUDED IN THE SELLING OR CASH PRICE OF THE CAR. PLEASE HELP!!!!!!
Hi Tosha,
Yes, they can do that.
It is a fee to get you financed. From what you have told me I can only assume that you have less than perfect credit and if that is the case that is why they charge for getting financed.
They can only charge that if you sign and accept those terms. You are the buyer and you are in control.
THANX JIM