Car Dealer Scams
Scam #1: āWe promise to pay off your old trade-in.ā
How the scam works: Due to passive car sales some dealerships are shutting down and not paying the loans off on customerās trade-in. This leaves you responsible for paying off two vehicles.
How to avoid the scam: Make sure you fax all the dealershipās paperwork showing that they are paying off the loan to your previous loan company. No guarantees but this should get you off the hook in case the dealership chooses not to pay. Better idea, payoff your old loan or sell the car to someone else. That way youāll avoid this mess.
Scam #2: āWeāll pay off your loan or lease no matter how much you still owe!ā
How the scam works: They do get you out of your loan, but those penalties must be paid to the bank to end the contract. The dealer will not do any favors, he/she just wants your trade-in so they may give you less than what itās worth, while selling you a new car at a high profit. Then they resell your trade-in for a high price, while you are stuck paying off 2 cars. With this scam, the dealer pays off your loan, and then you owe that dealer for your trade-in car loan. Your payments are spread out over sixty or seventy-two months so you donāt notice what just happened. The more months are added to the loan, the lower the payments. In fact, itās likely that the payments could be less than your current loan, so you think youāre saving money when you really got swindled. This gets many people deeper into financial trouble.
How to avoid the scam: If you are in a loan now, itās best to stay in it until the end. If you are upside down on a loan, you need to wait until the car is worth more than what you still owe on it. If you really need to get out of your loan, think about finding someone to take over the loan. If someone takes over the loan their name is now on the contract and you are completely off the hook
Car Dealer Scams
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