Buying a New Car? Watch Out for Scams
May 1, 2008 – 5:04 pmBuying a new vehicle is already hard enough without a car salesman putting pressure on you while you are browsing. We all know that almost every car dealer can be negotiated down on the sale price of a car. The thing is that to watch out for the scams so that you can maximize your hard earned cash. In this article I am going to share a few sales tactics that you may want to be on the lookout for the next time you purchase a new car.
1. Some dealerships may try to scam you by charging you for having the VIN# etched on the windows, saying that it is a requirement by the loan compnay. It is not. Lenders will never ask you to add features you don’t need. Their main concern is your ability to repay the loan.
2. “Subject to loan approval” is a common phrase on car loans. Some dodgy car dealers will try to scam you by mentioning this phrase, with a view to squeezing more money out of you. They can charge finance fees of $1000 up and and added $50 to you payments if you have a bad credit score. Those with good credit needn’t worry so much. The best thing to do to avoid this scam is to get a loan from a bank instead.
3. The credit score scam is very common nowadays. This involves the car dealer telling you that your credit score is lower than it really is and attempting to charge a higher interest rate. When purchasing a new car it’s a good idea to bring along your credit report to dispute any claims that they could make.
4. A dealership may insist that you purchase a warranty, telling you that it is required for you to qualify for a car loan. This is NOT true.
5. Another good scam that you may have seen is the dealer prep scam. This is an extra $500 that seems to appear on your contract to compensate the dealer for that hasn’t been done because the car arrives in the dealership ready to be driven off the car lot to a prospective buyer. Try and avoid paying this if you can otherwise find a dealer that will knock off this ridiculous charge.
6. Yet another phoney fee is the ‘dealer mark-up fee’ that is invented just to increase the car dealer’s profit margin. This is charged for no reason other than greed. This fee can be seen on the orange sticker marked on the manufacturer’s suggested retail price (MSRP).
As common as these scams are, there are also quite a few reputable dealerships out there. Dealerships that will give you a good service and sell you a car at a fair price. You just have to look carefully for them.
Tags: Automotive & Cars
Related Posts
Print This Article :
