Top 10 Car Dealer Scams

# 1 - Yo - Yo Financing. You purchase your car and take delivery on it right away. Your financing is through the dealership. A few days later your dealership calls you and tells you that your financing has fallen through. They ask you to come into the dealership and setup new financing, which off course will yield greater profit to the dealership and cost you more. To protect yourself against this dealer trick wait at least 24 hours to take delivery of your new car. Do not take delivery of the car until you have confirmed that the financing is complete.

#2 - Dealer Preparation Fees. This is what the dealer charges you to prepare you car. Some dealers charge $500 or more for this fee. At many dealerships they don’t have to do very much to prepare a car for sale. They peel off the plastic protectors on the car, test drive for a few miles and put in the fuses. Sometimes, you can negotiate get them to give this fee up.

#3 - Window Etching. Some dealers charge $300 to $900 for etching the Vin number # in the window of your car. You can buy a do it yourself kit at an auto parts store for as little as $29 dollars.

#4 - Tie you down! I’m not talking about calf roping. In the auto dealership world you are tied down when you have money down on a car. Don’t put money down until you are 100% sure you will purchase a car and you are satisfied with the purchase price that you’ve negotiated for your trade-in and new car. Once the buyers order has been signed and approved by management you can put down a deposit. See the Auto Purchase page for more details.

#5 - High-Balling. A dealer or website gives you an inflated figure for your trade-in hoping to tie you down (get you to put money down.). Then, they find another way to make money on your or don’t come through on the figure.

#6 - Demo Cars or Loaner Cars. Be wary. There is no pricing information available on loaner cars so you can’t negotiate a good deal. Sometimes these models get abused by patrons or dealership employees before they are sold.

#7 - Pushy or Unaccommodating Sales People. You car buying experience should be pleasurable. Don’t put up with pushy sales people. Take your business somewhere else.

#8 - Credit Report Scams. A car dealer pulls your credit report, without your permission, when you give them your license to test drive a car. They want to get you pre-approved for a loan. Some will send your loan application to several lenders without your needed credit information. This forces each lender to pull your credit report. It can negatively affect your credit rating if your credit report is run several times in a short period of time and no credit is issued.

#9 - Three Card Monty. Like the famous card game this dealer trick works on misdirection. A car dealer will give you what you want on one end of your deal while taking it out of you on the other. They give you a break on the purchase price of your new car but then give you less for your used car. Or they give you a great deal on your used car and new car but the terms of your financing are terrible. To get a good deal on your new car you have to understand all three points of the sale: terms of financing, price of your used car and price of the car you are buying.

#10 - Life / Disability Insurance. If you want this kind of insurance you will probably be able to find it cheaper with better coverage limits outside of the dealership.

OK, so there's more then ten. Top ten sounds much better than top 14. Here are the rest.

#11 - Extended Warranties. An extended warranty is a great thing to have but the dealership is generally not the best place to buy it. Search for auto warranties online. There are a multitude of options.

#12 - Dealer Advertising. Dealer ads are big on hype. Typically, in the add the big words say what you want to hear but the little words tell you what the truth is. Read the fine print. Auto dealers frequently have sales but these are usually not really sales. If you want to get the best possible deal on your new or used car you have to negotiate. You will usually not get a better deal just because the dealership is having a sale.

#13 - Advertising Fees. Advertising fees are usually built into the basic cost the dealer pays the manufacturer for the car.(similar to the hold back profit the dealers make). Some dealers will try to tack on an extra advertising fee.

#14 - Bait and Switch. You are attracted to come into the dealership by advertising about one particular vehicle or financing option. Then, when you get to the dealership the car is sold or you find out you don’t qualify for the special financing rates. But, they have an even better deal which they try to switch you to. The better deal is only a better deal for them.






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