You need to be very cautious and well informed if you are planning to buy used or new cars. This is essential to avoid getting hurt by any car dealership scams. Though most of the car dealers are sincere and honest, the scammers can cost you a lot of money. The following are some of the most common car dealership scams. Keep them in mind and whenever you hear offers on similar lines, you would be better off avoiding them.
Yo-Yo Financing Scams: This is a type of a car dealership scam, where the dealer claims that they will handle all your financial details while you can conveniently take the car home. Once you buy the car and sign all the contract papers, the dealer will give you a call saying that he is having some difficulty with your financing. Then he will offer to arrange for you a new financing scheme directly through his dealership. The new scheme would usually charge higher interest and you will have to deal directly with the car dealer. This kind of scam is common in both used and new cars.
To avoid such scams, arrange your finances even before visiting the dealer, especially if you have a low credit. You can opt for an auto financing loan or any other suitable line of credit from your bank or other lending institutions. This will help you avoid expensive financial dealings with your car dealer. However, the best option is to pay the total cost in cash if you can afford it.
VIN (Vehicle Identification Number) Etching: VIN works for theft prevention and helps you to identify your car easily. Some dealers offer to etch the VIN onto your car window and charge a price that ranges from a few hundred dollars to a thousand. Your dealer may even give you a discount and you may have to pay only a few hundred dollars. However, the real gainer in this case would be your dealer who managed to sell you a service that would cost twenty to thirty dollars at a mechanic’s shop for a few hundred dollars. In fact you can do the job yourself with the help of an inexpensive etching kit.
Prep Fees and Market Adjustments: There are some dealers who mark up the price of both used and new cars. They usually claim that the extra charge is due to the market adjustments for popular vehicles or for prepping up the vehicle for sale. Keep yourself informed about the local sales data on new car models to avoid getting fleeced by such scams.
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