Look Out for Scams Before You Purchase a Car

When purchasing a car from a dealership one must be careful not to be scammed out of more money than they should actually have to pay. Not all car dealerships are going to try and scam you but there are bad apples in every bunch . So make sure that you are armed with the knowledge of the types of scams that a car dealer may try and pull on you. This way if you are faced with a scam you can see it coming and take your business elsewhere.

The Patriot Act:

If you have you own financing from a credit union, bank or online lender do not allow the dealership to force you into filling out one of their credit applications. Some car dealers have been known to claim that it is required because of the Patriot Act. The Patriot Act does not require this to be done. The Patriot Act requires banks to verify your information before opening an account. If you are using your own financing to purchase the car then there is no reason for you to fill out a credit application that the dealership has. Car dealerships will do this in hopes of running your credit through the banks and lending institutions that they use in hopes that you will go with one of their offers. This leads to more commission for the dealer. Just so you know, the more times your credit is run the lower your scores will get. To protect your credit scores and keep from being scammed do not fill out the credit application if you already have financing elsewhere. Point out to the car dealer who is telling you that the Patriot Act requires this that his/her information is false. Then take your business elsewhere.

Lies About Your Credit Scores:

Finance people at the car dealerships will come out telling you that your credit scores are lower than they actually are. They will then proceed to explain that with your credit scores you only qualify for a higher interest rate. With a lot of people not knowing their own credit scores, dealerships are able to get away with this type of scam. The best thing to do when applying for financing at a dealership is to have a copy of your most recent up-to-date credit scores. Take a hardcopy of them with you and show them your credit scores if what they are showing you does not match what you have. Some car dealership finance people will go as far as to tell you that what businesses see is different from what consumers see. This is an out and out lie. Get up and take your business elsewhere.

Lowered Monthly Payment Scam:

A few days after you have signed the paperwork and have your car, they will call you up and tell you to come back in to re-sign the paperwork. The reason for this re-sign is that they have lowered your APR. They really didn't lower your APR, they raised it. But most people do not realize this because of how they do this. They will take your loan and stretch it out over a longer period of time. This makes your monthly payments lower. But in the long run you are paying more in interest. If your dealership does this to you, just decline and keep the loan the way it is.

Forced Warranty Scam:

This scam is where the finance managers will try and force to you purchase an extended warranty. The car dealership finance manager may even go so far as to tell you that it is required to purchase this or the loan will be denied. Another lie they may try is to tell you that you will get a lower APR if you purchase this or without the warranty your APR will go up. These are lies. Any type of warranty is not going to determine whether you get the loan or not nor the type of APR that you get with your loan. To further stop this scam, read the fine print on all paperwork before you sign it. Sometimes car dealerships have been known to hide this fee in the paperwork hoping that you will believe it was thrown in there and you are not being charged. Guess what you are being charged for it.

Take the time to read all fine print, know the law and use common sense and you can avoid allowing these vultures from preying on you. If a car dealer or dealership has tried one of these scams on you then file a complaint with your state's Attorney General. Your state's Attorney General can work toward holding these car dealers and dealerships accountable for their scams.