Understanding Dealer Perceptions
Auto financing scams are a significant concern for many buyers. The notion that car dealers often act as predators is a common belief, stemming from the idea that they frequently target those who lack knowledge. While this stereotype can be accurate in some cases, it’s essential to understand that not every dealer employs dishonest tactics. So, how can you tell apart the reputable dealers from those who might take advantage of you? Recognizing the signs of auto financing scams can help you make informed decisions.
Identifying Common Auto Financing Scams
The Yoyo Scam: This misleading strategy allows buyers to take a vehicle home as if financing is confirmed. However, days later, you might receive a call from the dealer citing financing problems, pressuring you into a new, more expensive agreement that benefits the dealer. To protect yourself, do not drive the car off the lot until you have verified that your financing is fully secured, ideally waiting at least a day.
Window Etching Trick: Some dealers may propose to etch the vehicle’s VIN onto the windows for a steep fee, ranging from $300 to $1,000. Many buyers mistakenly think they’ve struck a good deal when they negotiate the price down, but even a lower charge is still excessive. Instead, consider buying a DIY etching kit from an auto parts store for about $20.
Preparation Fees: Dealers might impose inflated preparation fees for simple tasks such as test driving or removing protective materials, which can add $500 or more to your total. These charges are often already included in the manufacturer’s suggested retail price (MSRP). If you encounter such fees, ask for them to be listed as a credit on your invoice. If the dealer declines, it’s best to walk away.
Market Adjustment: Be wary of dealers who state that a popular vehicle requires a ‘market adjustment’ fee, which could increase the price by thousands. Regardless of a car’s demand, you should never pay more than the MSRP, as paying extra only benefits the dealer.
Warranty Extensions: This age-old scam involves dealers claiming that an extended warranty is essential for loan approval. To safeguard yourself, request written proof that the warranty is a prerequisite for financing. If the dealer hesitates to provide this, it’s advisable to look for another dealership.
Conclusion
Understanding these common auto financing scams is vital when buying a vehicle. If you’ve previously had a good experience with a dealer, consider returning to them, as this suggests a focus on customer satisfaction rather than merely profit. Always take your time and avoid rushing into decisions. Wishing you the best in your car search!