Dealers are a great help in smoothing the process when it comes to selling or buying a car. They provide convenience and take away the pain of preparing your car and dealing with the buyers before the sale. But they’re not all milk and candy; some dealers are known to squeeze more than the required amounts, creating nasty experiences for their customers. Besides greatly misquoting the value of a car, some dealers go through great lengths to ensure you pay enormous amounts for it. So if you want to avoid a horror story of your own, here are the top three scams to avoid.
Trade in scam
You’re done with your current car and want to trade it in. Your dealer seems to have the best deal, offering you a fantastic trade-in value on your old car. You may also receive special low interests for the new purchase, perhaps a rate lower than home loans. But just then when you think you’ve hit the jackpot, you are given an extreme quote on the new car, much higher than what you’ve been seeing around. They’ll probably give you something like ‘the vehicle is on demand’ or ‘it’s new and top notch’. The opposite may also happen, a lowered price for the new car and a much lower trade-in value for your current car.
This trick can be quite confusing but the catch here is to be aware of the changeover price. Just don’t rush it, compare rates from different dealers and sit down with your calculator if you have to.
Credit score scam
This is quite a common trick and it involves altering your credit score. You’re ready to buy your car and the dealer pulls off a mass of documents one of which has a huge 500 marked in red, underneath a credit score tag. The concept here is simple, a low credit score (below 680) equals to higher interest rates- simple physics. So they’d be able to get you paying a much higher ARP than you should.
This trick works on any unsuspecting shopper, whether they’ve got a good or bad score. Avoiding it is simple, be aware of your credit score just as you are aware of your cholesterol levels. Once a dealer brings you their altered scores, show them yours. You’d want to see how they’d get out of that one.
Car loan scam
Another opportunity dealers can use is when you’ve got a car loan and you want to trade it in for another. Typically, a dealer is required to pay the loan and then add it to the price of the car you want to purchase. But guess what, they don’t pay it off. Weeks later your bank sends you angry notes to pay off your loan and since it’s written in your name, you can’t take any legal action against the dealer. This greatly damages your credit scores and forces you to pay off the loan.
First things first, avoid dealers when you’ve got a loan on your car. You could pay off the loan first or privately sell the car. If you really have to get involved with a dealer, ensure it’s in writing that the dealer would be the one to pay the loan.