Is now a good time to buy a car?
Well, maybe. But there are some things you should know first about the deceptive practices that some car dealers are using to increase car sales.
Today’s economy has forced legitimate used car salesmen (and even new car dealerships) to operate on very thin margins. Many are teetering on the verge of bankruptcy.
Some car dealers are in such a rush to get you behind the wheel of a new car, they don’t even confirm your financing first. This can cause all sorts of problems. In some cases, the repo man could arrive in a few weeks and tow the new car away.
This video highlights a Houston Chevrolet dealership whose sales tactics actually resulted in many 911 calls being placed right from the dealer’s lot! A couple of those tactics included:
- Telling buyers a few weeks after they bought a car that their low-interest, low monthly payment financing fell through
- Forcing buyers to accept more costly financing or pay thousands of dollars in rental fees if they choose to return the car.
Of course, that’s not the only car dealership to use deceptive practices to lure car buyers.
Before you buy a new or used vehicle, here are some other car scams to watch for…
There are many ways that you can end up on the short end of the stick when it comes to car scams.
Unfortunately, I’m speaking from experience.
Trade-In Car Scams
When you trade in your existing car, often with a balance outstanding on its original financing, you’re assuming the dealer will pay off the existing lien on your trade-in in a timely manner. After all, that is what they said they would do. Sadly, this doesn’t always happen.
In my case, 60 days down the road the bank will sent me a nasty letter saying my loan was in arrears and they wanted to repossess the car I no longer had. To make matters worse, the car dealer already sold my trade-in — complicating the situation even further.
Fortunately, for me, it only took one trip to this car dealer (taking a close friend as a witness) to convince him that I didn’t take kindly to anyone messing with my credit. If he hadn’t seen the light, so to speak, it could have taken a court battle to straighten things out.
Car Dealers Keep Bankruptcy A Secret
Car dealers go bankrupt (even the large, reputable ones). It happens every day and will likely continue to happen.
However, a business isn’t likely to spread the news when they’re on the verge of bankruptcy. They keep that information to themselves, because letting the public know about the fact that they’re in dire straits financially would pretty much halt all future sales and probably shut down the business.
That means, unbeknown to you, you may be buying a car from a car dealer that is on the verge of bankruptcy. If you happen to start a deal, turn over the keys to your trade-in, or in any way have a financial risk present when the do file for bankruptcy, you’ll be stuck. You will most likely see little or no return for whatever money they may be holding that rightfully would be considered yours.
Stolen Car Scams
That slightly used car you bought a couple years ago might actually be stolen.
As you can see in the above video, switching vehicle identification numbers (VIN numbers) is the leading scam that victimizes thousands of people across the country every year.
After coming up with a sizable down payment, turning in your trade-in, and making your car payments, when the police knock on your door informing you that the car you bought was stolen, you’re the one that pays the price.
Truth be told, the car dealer may have been a victim as well. He may have honestly taken in the stolen car on trade. In all likelihood, once the dust settles, you will be the one who will lose your money.
