Financing Scams
Dishonest car dealers might fiddle with your financing as a way to jack up their profits. The most popular way of this scam involves calling back car buyers into the dealership a week or so after purchasing a car. Once youâre back, the car dealer tries to renegotiate the interest rate based on whether you buy extra services, accessories or warranties. They might also try to focus on the amount of the monthly payment to divert attention from the fact that the total amount being financed has gone up. Another variation of this scam involves dealers letting you drive off the lot without finalizing the loan papers, promising that theyâll work it out. But when they call after several days, the terms of the loan have changed or the monthly payments are more than the buyer can afford, which opens the door for the dealer to ârefinanceâ the vehicle and increase his/her profits.
Warning Signs
Dealers who offer to let you take a car home but donât finalize the loan terms might not have your best interests at heart, especially if you have already agreed to leave your trade-in with them. If you get a call about a problem with a loan several days after signing an agreement, be suspicious. Also, a dealer shouldnât lower or increase the loan interest rate based on whether youâll buy extra warranties or dealer services.
How to Protect Yourself?
Before going to a dealership, line up your own financing. Compare the interest rate of the loan you already have with what the dealer offers and go with whichever one is better. When negotiating with car dealers, it is recommended to focus on the total cost of the car, not the monthly payment. Dealers may sometimes monkey around with the total amount being financed if youâre too focused on the monthly payment.
If you are already involved in such a scam, try to find an experineced dealer fraud attorney to asset your rights.
Financing Scams
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