|Top 5 Dealership Scams:|
1. The VIN# window etching scam
Basically a dealer will charge you $300-$900 for
window etching and they will tell you that you
have to pay the money to get the loan because the
banks insists on it.
Some dealers might tell you that the etching is
free but will add on the etch money to your
monthly payments to make up for it.
The best way to avoid this scam is to force the
dealer to put it in writing if they say that the
etching is free or simply etch the car yourself.
Remember a lender doesn't require that you
purchase any extras on a car. All the lender
cares about is that you can make your payments on
time regularly. Don't buy into it.
2. The Financing Scam
I have mentioned this before already, but here it
is in more detail.
Basically you trade in your old car and the
finance manager tells you that your interest rate
is good and then gives you the car.
After a week or two passes you get the call from
him that you didn't qualify for the interest
rates that they gave you upon making the deal.
Every new purchase has a clause in the contract
that usually states that the deal is "subject to
This gives the finance manager a loop hole in
getting more money out of you.
All that this means in the contract is that the
deal is not finished yet even you already have
possession of the car and have signed the
The dealer can then charge you $1000 more in
finance fees and up your monthly payments by $50.
This scam is generally pulled on people with bad
credit because it is more plausible.
If you are wondering why they would sell you the
car at 6% APR if they knew you had bad credit
(remember they ran the credit search already) the
answer is simple; to sell the car.
You can avoid this scam by not financing the car
with the dealer if you know that you have bad
You are better off going to a credit union and
financing the car yourself. When you buy a new
car the deal should be made on the price of the
car, not on the monthly payments.
3. The Credit Score Scam
This scam is ridiculous at best. This is when the
finance manager tells you that your credit score
is lower than it really is so that they can get
you for higher interest rates.
This scam is pulled on everyone; good or bad
This scam is easy to avoid. Just get your own
copy of your credit report from Equifax.com, and
bring it with you.
It is really difficult to lie to you about your
credit score if you have your own copy of it. If
your paper and theirs doesn't say the same thing,
go somewhere else because that dealership is
lying to you.
Don't forget to let them know it too because
it'll be nice to watch them squirm.
4. The Forced Warranty Scam
This is when the finance manager tells you that
you are not eligible for the loan by the bank
unless you pay an extra $2000 for a 2-3 year
This scam just doesn't make sense. Basically the
finance manager is telling you that the bank
won't trust you to pay the $20,000 loan for the
car, but they will trust you if you pay even more
money. That's just stupid.
You can avoid this scam if you can force them to
put it in writing that you "have" to pay the
extended warranty in order to get the loan.
That way you can bring a copy of the contract to
your local State's Attorney's office to verify
that the deal is valid. I can bet that the
finance manager will change his tune pretty
5. The Dealer Prep Scam
Let me first let you know that cost is not only
legal but very much common practice. I still
refer to it as a scam because it is just another
way for you to end up paying more money for the
Basically the dealer will tell you have to an
extra $500 to cover the labor costs of the
dealership's 5-point inspection.
You are paying for the time it took for the
dealership to make sure that the car wouldn't
explode on you in the first week of owning it.
This check up that you are paying so much money
for is for the dealership to remove plastic from
the seats etc, vacuum the car out, and making
sure that all of the fuses and fluids are ready
When factories deliver the new cars to the
dealerships the cost of delivery and prep is
already covered, so basically you are paying the
dealership for work that they haven't really
I swear they could get the car in perfectly ready
to drive condition and put everything right back
in it just so that they can make you pay the fee
You can avoid this scam by simply asking the
dealership to add an extra $500 credit to the
deal to make sure you do not have to pay the
If they refuse, you can then decide if the car is
worth the money. If it is fine; buy the car, if
not; go to another dealer that will remove the
dealer prep costs.
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About the Author
Andy McDowell is a Muscle Cars and Ford Mustang Enthusiast who runs the website Muscle Cars Online