Lying About Money Factor
The Scam: Money factor is another thing that seems to confuse leasing customers. Money factor is basically the interest rate shown as a fraction. To convert it into an interest rate you’re familiar with, you just need to multiply by 2,400 but a lot of people don’t realize this so it’s an easy way for dealers to take advantage of the situation.
Let’s assume the money factor is .0025 so that would mean the interest rate is six percent . An unscrupulous dealer may tell you the interest rate is 2.5 percent, hoping you get confused between 2.5 percent and .0025. A true 2.5 percent interest rate would equal a money factor of .00104 – but in the agreement the dealer will put down .0025.
If you bring it to their attention, they will claim they told you 2.5 for the money factor, not the interest rate. This is straight up fraud, but they always have an excuse.
What To Do: Multiply the money factor by 2,400 to get the equivalent interest rate. Make sure the correct figure is written in the contract.
Republished with permission from The Ultimate List of Car Buying Scams
How To Find A Good Auto Repair Shop Or Mechanic
When your car needs servicing what influences your decision on which shop to take it to? There are many factors that you should keep in mind while making this decision.
Is your car under warranty?
If your car is still under warranty you may have no other option than a mechanic or an automotive service technician certified by the manufacturer make the needed repairs. This usually means youre going to have to take you car to a local dealership to have the work done.
This isnt always the case, however, and you might be able to take you car to any certified mechanic. Just make sure youve read and understand your warranty so that you follow the steps necessary for reimbursement.
Once your warranty expires there should be no restriction on where you take your car for servicing.
OK, so how do I find a good mechanic?
Finding a good, honest repair shop or service station near you shouldnt be too tough. Ask your family and friends for their recommendation. The Better Business Bureau is another great resource when you try to find a reliable repair shop.
You can also search the web for both recommendations and warnings. Do some research even if your car needs nothing more than routine maintenance. None of this will help you, however, if you break down in the middle of nowhere and theres only one repair shop. To help avoid this scenario, do a visual inspection of your engine before you leave for a long car trip.
Always get a second opinion
Making A Profit From Rebates
Realcartips.com explains how auto dealerships can make a profit from rebates that are supposed to apply to your sale price saying, “It’s not uncommon for some people to qualify for 3 or more rebates on one vehiclethe problem is knowing which ones you qualify for in the first place.”
They add, “Some dealers take advantage of this lack of information and will attempt to keep some of these rebates for themselves. It’s easy for them to get away with it because manufacturers don’t audit every single sale. Sometimes, dealers will honestly fail to recognize you qualify for a special rebate, which is not that uncommon.”
Make sure you take a look at what rebates you qualify for and take advantage of them yourself.
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Intentional Misrepresentation Of Repair Needs
Modern automobiles are complex, highly technical machines. The average person has no idea how to repair or maintain their own vehicle. Its very easy for an unethical auto shop or mechanic to deceive the average consumer.
This makes it very hard for the vehicle owner to make decisions on whether the repair is needed. Beware the mechanic who seems a little too pat at explaining the particular problem with your car and always consider a second opinion and definitely get an estimate of costs before authorizing the repairs.
Common Examples Of Car Dealer Fraud
Car dealers sell vehicles to customers using a few of the same tricks over and over again. We have seen many cases where a dealership fails to pay off a trade-in, or fails to include the trade-in as part of the purchase agreement, or applies payment to the wrong vehicle identification number.
In the state of California, by law, a dealership has 21 business days to pay off a trade, and 15 business days to transfer title and registration for purchased cars.
You should hire an auto fraud attorney if your car dealer lied to you. Here are some of the ways your car dealer can rip you off and what you can do if you were scammed by the car dealership.
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‘mistakes’ In The Contract
The Scam: ‘Mistakes’ in the paperwork are very common: funny how they are always to the dealer’s advantage. Errors can be on the agreed purchase price, loan terms, down payment, or really anything.
What To Do: Make sure you review all the numbers and items in the paperwork to ensure they match the numbers you agreed to.
Car Dealer Jailed 7 Years For Scam Involving S$32m
The number of scams involving car dealers has been on a steady rise in Singapore. Even if they dont make the headlines, it is a well-known fact that dealing with a car dealer automatically incurs a premium. I mean, how else are these people expected to make a living for themselves? Dealers are not the only one to blame. We, as consumers, should also take the responsibility of knowing what the precautionary steps needed when dealing with a car dealer are. Dont know how to deal with car dealer? Below are some simple steps to always remember whenever you come face to face with a car dealer.
Recommended Reading: How Much Car Salesmen Make Per Car
Pros And Cons Of Filing A Lawsuit
There are a number of remedies, including getting money, that you might be able to recover in a lawsuit.
There are at least three other upsides to suing:
- You may deter an unethical dealer from lying to someone else in the future
- You may be able to negotiate a settlement on favorable terms
- You may get a great deal of personal satisfaction from taking the dealer to court
As far as downsides go:
- You may lose and be out money for court costs and expenses
- Although some lawyers may take your case on a contingency fee basis, you might be out attorney fees
- Lawsuits can be stressful and time-consuming
What To Do When A Car Dealer Rips You Off
Are you wondering what to do when a car dealer rips you off? The best way to get your money back, cancel your contract, and return the car to the car dealer is to have an auto dealer fraud attorney file a lawsuit against the car dealer who ripped you off.
Car Dealers can rip you off by
- Selling the car for more than the advertised price,
- Not disclosing previous accidents and damage to the car,
- Adding features or add-ons without your consent,
- Misrepresenting mileage on the odometer, or
- Pulling credit without permission or overcharging for loans.
Sue Your Car Dealer For Ripping You Off
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Have Something To Say
If you have something to add to the info I’ve provided, or you feel something I’ve written should be corrected, leave a comment below and let me know! Also, if you have any questions, I’m happy to answer them. Just know that it usually takes about a week for me to get back here and answer your awesome comments!
And please do leave your experiences here. You’ll be helping countless readers who might not have the same experience that you do. So whether they are good or bad, tell us how your used car buying experience went.
This article is accurate and true to the best of the authorâs knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.
Proof Of Repairs And Maintenance
If your car turns out to be a lemon youll be asked to provide proof of repair attempts and the number of days its been out of service. The repair log, if maintained correctly, will have records of the dates, mileage, and the issue needing correcting each time the vehicle was taken to the dealership.
If the dealer failed to fix the problem, the repair log will indicate it clearly and strengthen your case. If you end up in arbitration or have to sue the dealer, a well-kept repair log can prove to the court how well you took care of your car. A repair log allows a judge, arbitrator, or manufacturer to quickly review your case.
Think of how long it might take to pour over notes, invoices, receipts, work orders and other records presented in a big unsorted pile. Depending on the number of records, it could take days to wade through!
The Repair Log is a Summary of your Vehicles Repairs and Maintenance. Besides protecting you in Lemon Law arbitration, it allows you to quickly see the last time your vehicle had an oil change, brake job, or any other regularly scheduled maintenance procedure.
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Common Types Of Dealer Fraud
Surely, the number of a car dealer fraud cases is not a few. But the following ones occur widely:
- Car dealer sells accident-damaged vehicles without notifying the consumer about its poor history
- Rolling back the odometer
- Concealing the fact that the car needs to be repaired
- Bait and switch which is a common type of fraudulent advertising
Used Car Buying Scams
Detailed CARFAX Report
Avoid buying a car with costly hidden problems.
Buying a car is an exciting time, sure, but it can bring a lot of stress, too… especially buying a used car. After all, someone elsemaybe morehave owned this car. You want to know exactly what you’re getting.
Although buying a used car can save you a lot of money in the short and long run, it’s not always rainbows and puppies. Whether you’re dealing with a dealership or a private party, you’re at risk for scams. Protect yourself by doing a little research on some of the most common kinds of used car buying scams out there before you buy a car.
Recommended Reading: Repairing Cigarette Burns In Car
Take The Vehicle For A Pre
Get an independent, licensed mechanic to give the vehicle a detailed pre-purchase inspection. He or she will be able to spot any issues that the vehicle might have as well as share any concerns about potential repairs or replacements that will cost you down the road. Bring your CARFAX Canada report with you as youll want to verify that any damage was properly repaired.
CANADA’S MOST COMPREHENSIVE ACCIDENT HISTORY REPORT!
CARFAX Canada provides the most comprehensive and reliable vehicle history reports in Canada, giving you peace of mind when you purchase a car. Never buy a car without a CARFAX Canada report.
Selling More Than The Advertised Price
The price you pay for your car should match the price it was advertised for. If the advertised price was $25,000 but the dealer sells it for $27,500 in person, you will be able to sue the dealer.
Most car dealerships advertise vehicles online, and you can usually find a copy of the ad by searching the VIN number for the used car or new car. By law, even when car buyers dont see the ad before buying the vehicle, a lawyer can sue a car dealership that sells a vehicle over the ad price and get your money back.
In the state of California, it is illegal for a dealer to sell cars to a consumer above the advertised price. A common dealership trick is to advertise a low car price to lure in customers and then claim the cars are sold.
Consumer laws protect buyers from dealers that use bait and switch tactics by forcing dealerships to show buyers the sale order for an advertised car that is sold or to honor the advertised price if the car is not sold. Dealerships like to quote the MSRP and sell cars for more or less, depending on the demand for that particular make and model. MSRP is not the same as an ad price with a specific VIN.
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Changing Figures In The Lease Agreement
The Scam: Due to the confusing nature of leasing, many dealers will change the numbers around in the contract and literally steal money from you. Things such as raising the capitalized cost or increasing the money factor.
What To Do: You need to have a good understanding of how leasing works and the terminology used to prevent this scam.
Republished with permission from The Ultimate List of Car Buying Scams
Used Car Scams And How To Avoid Them
A roundhouse kick to the stomach.
Thats probably how most of us would describe the feeling of getting ripped off.
Best way to avoid it? Know your stuff.
Not everyones going to try and take advantage of you. In fact, theres lots of good, hard-working people out there that you can trust. Hell, youre one of them!
As the age old adage goesOne bad apple does NOT spoil the whole bunch.
Nonetheless, its best to be cautious and make informed, calculated decisions. This is especially true when youre buying a used vehicle online. Particularly when its a private seller. Weve compiled seven situations you might find yourself in and some advice on how to avoid that nasty kick to the gut.
Because in the end The more you know, the safer youll be.
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Common Car Dealer Scams When Buying A Used Car
One of the most common auto dealer scams when buying a carare the ones where the dealership covers up or hides the defects of the vehicle using some quick fixes to make the car appear to run smoothly. However, it wont be long before the real problems arise and it can be too late for the car buyer to discover that the car is defective. Hidden car defects will not only cost you additional money for the repair, but it can prove to be dangerous and may lead to accidents. If your car breaks down close in time to the date of purchase, a claim for dealer fraud can be difficult to prove if the vehicle was sold as is.
Some car dealer scams trick the car buyer into thinking that they have a bad credit score. These car dealer financing scams manipulated the buyer into thinking that the high-interest rate through the dealership is a better deal.
If you are quoted a different price then the one on the contract, you may be getting scammed. It is important that you read everything in the fine print before signing the contract. That is why it is so important to have everything checked and tested before you finalize the sale.
What To Do If Scammed By Car Dealership
Many car owners have been scammed by car dealerships, and we want to help you avoid this. The best way to do so is by understanding the signs of a car scam and how it might happen.
A car dealership will often provide you with false information about the car they are selling in order to get your money as soon as possible. They may lie about the condition of the car, but most importantly they will lie about their return policy on vehicles that were bought as-is. If you buy a car from them as is, then they can charge any price for repairs or replace parts without providing refunds or discounts.
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Misrepresenting Mileage And Odometer Value
It is illegal to change the odometer mileage in a used car sale under the law in most states. If the actual miles driven on the car was 25,000 miles, but the dealer had changed it to 15,000 miles, you can sue the dealer for rolling back the odometer. Auto fraud attorneys research title history and mileage to figure out if the odometer has been rolled back to protect consumers from this common practice.
Auto Dealer Loan Kickbacks
Unscrupulous car dealerships cant wait to pick your pocket
One of the auto industrys dirty little tricks is the practice of lenders giving kickbacks to dealers for charging high interest rates for the car loans.
A good example of this would be when a buyer has been qualified for an 8% loan rate, the dealer can, and will in most cases, attempt to charge a higher rate.
Many dealers will tell you they have a 12% rate available and will jump at the deal just to get credit and drive away in a new or used car.
Your $20,000.00 automobile over a 60 month period would have had a $433.56 payment at an 8% rate but now because you signed your loan agreement for a 12% rate you payment will be $475.64. Guess who get the extra $42.09 per month? You guessed right, the dealer who suckered you into the additional rate of interest.
To get the best possible deal on a new or used car or truck, knowledge and information is your best bet. Knowledge is always power in these cases.
Dealer scams such as the increased interest rate, packed payments and other common little tricks can quickly remove any savings that you thought you were receiving. Learn how to calculate you own monthly payments, use the internet to your advantage and learn how to negotiate with dealers.
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